Habit Trading For Health and Wealth
“My problem lies in reconciling my gross habits with my net income.”
“There is no way I will ever quit!”
Julie's husband, Scott, says he’s heard Julie make this statement at least a thousand times during their fifteen years together.
Julie says she's tried to quit at least twenty times before, and each experience seemed to include an additionally miserable experience, which in turn caused her to start smoking again. Like the time she quit smoking for more than two weeks but then the family dog was hit by a car and needed to have a $2,000 surgery. “Of course I started smoking again,” Julie told Carolyn- a friend from church.
Carolyn is a financial advisor and has had extensive education on how to help her clients reshape their habits in order to reach their goals, and she wondered how well the program might work for someone like Julie who had failed so many times before. Carolyn then mentioned, “I figured if it worked for people and their finances, maybe I might be able to help Julie both physically and fiscally.”
Julie and Scott hired Carolyn to help them get organized with their money and establish a plan for retirement. The recommendations Carolyn made all seemed reasonable until she got to the part which recommended Julie give up her $170 a month habit of smoking.
“There is no way I will ever quit!” Julie replied.
“I figured you would say that, Julie. And so, let’s look at a plan where you can continue to smoke,” Carolyn countered.
What Julie didn’t know yet was that Carolyn had the unfortunate experience of taking care of her mother in the final years of her life as she battled emphysema. Carolyn thought it was time to share her story.
“Having to watch my mother suffer like that was the worst experience of my life.” Carolyn said. “And while the physical aspects were terrible, the financial ramifications were the reason I am so committed to helping people with their finances. I want to make sure that anyone I know hears my story and learns from it so they don’t face the financial burden I did with my mother.”
Julie sat motionless while Carolyn shared about the costs associated with the treatments, medication, and hospital stays over the three years Carolyn cared for her mother.
“And let me tell you about the conversation my mother had to have with me when she realized she wouldn’t have enough money to cover her own expenses,” Carolyn continued. “It was horrible watching the look of complete helplessness on my mother’s face as she struggled to acknowledge she would rather die than become a burden to me.”
Julie couldn’t fight the tears as she imagined having to tell her own children those same words. “I’m so sorry you had to go through that, Carolyn. I appreciate your vulnerability in sharing it with me. I realize smoking is bad for me, but I really don’t know how to quit. I want to, but I’ve tried and failed so many times that I feel like I just can’t.”
Carolyn knew that the first step in helping someone break a habit is to acknowledge the habit is an obstacle, and to surrender to the idea that they can’t quit. The reason this is important, as behavioral science has discovered, is because people can’t quit a habit; they can only replace it.
“Julie, if I were to take the time to work with you and help you solve the problem of quitting, would you be willing to commit to doing everything in your power to follow my guidance,” Carolyn offered.
Julie didn’t even wait to respond. “I will do anything I can to quit, and it excites me to think of not smoking, but I feel compelled to tell you I’ve tried everything and nothing seems to work.”
“I’ve noted that, but I’m guessing you haven’t tried what I’m about to do with you.” Carolyn replied with a big smile on her face.
BJ Fogg, PhD and behavior science professor at Stanford University, studied habits with an intense effort to understand the key to helping people rid themselves of bad habits. He discovered that it’s not as complicated as people might think; it just takes a simple method to give the brain a new focus.
He explains that when it comes to long term change, there are two ways to do it: 1) change your environment or 2) Change the behavior with tiny changes that you make automatic, and so tiny that you don’t even need much motivation to do it.
Carolyn was trained in how to reshape a person’s behavior to turn a bad habit into a good habit, but instead of helping Julie quit smoking, she wanted to try something different. So, she decided to do an experiment with Julie.
“Julie, the next time you smoke a cigarette, after each puff, I want you to put a dollar bill in an envelope that you keep in your purse.” Carolyn said.
“That’s it?” Julie replied. “What do I do with that envelope when it gets full?
“Each week you’re going to give the envelope to your kids” Carolyn replied.
“Give it to my kids?” Julie asked with a very puzzled look on her face.
“Yes, to your kids. And they are going to put the money in a new savings account you’re going to help them set up. This will be the money they someday use to take care of you in your final years.”
Julie was stunned, and so was Scott. The expressions on their face were equal with surprise, except Scott's included a slight grin at the thought of such a creative solution, and he wondered how Julie would feel about this. The kids knew she smoked, but Julie never smoked with them around and she was embarrassed to think of them knowing just how much she smoked.
“I don’t know if I can do that.” Julie finally said.
“Why not,” Carolyn insisted. “If you can’t quit, they’re going to know eventually. And won’t it feel better knowing that you’ve provided them with the money to care for you instead of the risk that they will need to use their own money to care for you?”
Julie sat there trying to think of what to say. She understood the value of the exercise, but also really hated the thought of involving her children in any way.
Finally, after what seemed like several minutes of silence as she waited for Julie’s response, Carolyn broke the silence, “There is one other suggestion, but I don’t think it will be as effective, and it’s much more difficult.”
“What is it?” Julie replied, eager to hear any other suggestion.
“Well, instead of putting a dollar in an envelope after each puff of the cigarette, you could instead put a dollar in an envelope each time you think about having a cigarette but don’t actually have one, and this time you give the envelope to your husband at the end of each week and he will give that money to me so I can invest it for you as an added amount to be used for your future retirement. And if you get sick, the money will be there. But if you don’t then you’ll have more money to enjoy your life. And you wouldn’t need to tell the children.”
Julie was much more interested in this idea and agreed to Carolyn’s terms.
Over the next month Julie found that the experiment was even harder than she expected. The problem with Carolyn’s experiment meant that either Julie would have to admit to her kids how often she smoked, or she would have to admit to her husband how often she wanted to smoke, and this new reality was stunning. Unfortunately, she found it was too easy to lie about it.
In her second week, she encountered a stressful situation at work and started to again smoke. She hated herself for starting again, but figured she would default to Carolyn’s plan and she put a dollar in an envelope for every puff of a cigarette she took. What she didn’t expect was what happened next: She didn’t have enough dollar bills. In just one day she needed over $100 dollars to equal the more than 100 puffs a day she was taking.
“When I realized just how many actual puffs a day I was taking I realized what I was really, doing to my body, and I also realized I couldn’t afford to give my kids over a hundred dollars a day. But that also made me realize just how expensive my habit was to my future. And that’s when it hit me that I had to make this work.”
Two years later Julie had not smoked even one cigarette. This was the longest she’d gone without a cigarette in her more than seventeen years of smoking. She had also given her husband more than $4,400 in cash and IOU’s- she also didn’t have enough money to pay him a dollar for every time she thought about smoking but he said the IOU’s are fine with him.
“The experience of habit trading changed my life in more ways than one,” Julie continued, “As a result, we’ve added more money to our retirement savings because of following the five-step plan [from the Money Organizer Plan], and we’re on track to reaching an A Wealthgrade by the time we turn 56 years old. We’re on fire! It actually scares me to think of my future had I never met Carolyn and accepted her challenge”.
We don’t usually change until the pain of remaining the same is greater than the pain of change, and sometimes the best way to make a change is through small adjustments to our beliefs and behaviors. Sometimes small changes to a habit can make a life change difference.