Kickin’ the Habit

July 2nd 2018 | Posted in Behavioral Finance, Blog

A couple of years ago our oldest son developed a bad habit that seemingly every child develops at some point…biting his fingernails. For whatever reason, he started biting his nails and would continue to do so without ever really noticing that he was doing it. We would question him as to why, and the only response we ever seemed to get was “I don’t know.”

It wasn’t until recently that I found out why he didn’t know why he continued to bite his nails, even after our constant questioning and corrections. In his book The Power of Habit, Charles Duhigg explains that the brain converts a series of actions into an automatic routine known as ‘chunking’. We rely on dozens, if not hundreds, of these behavioral chunks to get through our day.

Take a moment to think about how you get dressed in the morning. Do you consciously think about which shoe you tie first or whether you do right leg then left leg, or left leg then right leg? You’ve completed these tasks so many times in your life that your brain has stored them away to save time and effort in the future.

While this is helpful for our good habits, it also reinforces the bad ones. Entrenched bad habits, including bad financial habits, can be hard to break. We tend to be blind to our weaknesses. Sometimes we need someone to come alongside us who clearly sees what we cannot see, identify wrong patterns, and help us develop positive behaviors. An objective financial advisor can help identify areas that need to change and work with you to create and monitor a plan that establishes lasting, healthy patterns of financial behavior.

Adam H. Burns | Relationship Manager

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