The Secret to Building Great Money Habits


I’m going to go ahead and assume we’ve all heard about SMART goals by now.

(Juuust in case you haven’t, here’s a great overview from The Simple Dollar.)

So when I say things like “Goals won’t get achieved without habits,” the goals part is (relatively speaking) pretty clear. But habits?

Oh, habits.

If there was a silver bullet or magic pill available to create or change your money habits, we would all have started using it ages ago. Whether it’s a book-buying habit or a Starbucks-latte habit, I’ve had my fair share of money habits that weren’t in line with my goals.

I mean, they were very in line with my “someday have an entire library in my house, like in Beauty and the Beast” goals and my “please give me the delicious caffeine” goals, but not as much in line with my money goals.

Building – or in most of my examples, breaking – money habits is tricky business.

I’m sure we all have a favourite example of a time when we totally nailed it, and dropped a bad habit like it was nothing. Mine? One New Years, I managed to establish a regular yoga practice and ended up in fantastic shape as a result.

And then we’ve got the other examples of habits we just can’t seem to shake.

For the longest time, no matter what my income or financial situation, I had a Starbucks latte every day.

Every. Single. Day.

So what can you do to give yourself the best chance of establishing killer money habits to support your financial goals this year?

Know What Kind of Commitments Make Sense to You

That came out of nowhere, right?


So here’s the background.

Over the holiday break, I borrowed Better than Before, by Gretchen Rubin, from the library, in line with my new “no more spending mindless $100s on Amazon every month” money habit.

It is chock full of amazing advice and distinctions about habits, and it pays special attention to how different people form habits differently based on their personalities and preferences.

Your habit formation and my habit formation might be entirely different, even if we end up at the same result.

The best framework in the book – and the one that, like a lightbulb, made it crystal clear to me why any habit I’ve ever formed successfully has worked – is called the Four Tendencies.

Basically, there are four kinds of people, grouped by which kind of commitments they tend to honour the most: commitments to other people, commitments to themselves, both, or neither.


Upholds commitments to others, not so great at upholding commitments to themselves.


As the name implies, upholds commitments to both themselves and others.


Great at upholding commitments to themselves, but will challenge external commitments.


No intrinsic need to uphold either commitments, unless it makes sense for them.


As soon as I read this, I recognized myself immediately – I am an Obliger through and through.

That time I was able to establish a regular yoga practice?

It was at a yoga studio that frequently sold out for their classes, so they had an online system in place. You could go to their site and reserve your spot in the class you wanted, but careful: if you reserved a class and didn’t show up, you got one strike. If you racked up three strikes, you couldn’t reserve classes anymore, and good luck getting a spot in Thursday night Power Flow class if you can’t reserve your spot.

My habit succeeded because I had external accountability for it, which is a much bigger driver of follow through for me than any goal written on a Post-It beside my desk.

Meanwhile, let’s look at my savings goal: saving half of my income.

I haven’t yet had a month where I’ve quite managed to hit that elusive 50% number. That said, I’ve been consistently saving about 40% of my take-home income every month since I started this blog. One of the big reasons I’ve been able to stick with it is that if I were to totally bail, throw up my hands and say “It’s impossible!” and go back to saving 20% of my income, I’d have to tell all of you about it.

And listen, I don’t even think that would be the end of the world!

There is plenty else to talk about in the wide world of personal finance, and I’d keep writing. But like…

I really don’t want to do that.

So every month, my newfound habits of tracking my spending, bumping up my automatic savings contributions, and cutting back on key spending categories like coffee and books, are all still around. If anything, they’ve become second nature after the past four six months. When I hear about a great new book, I add it to my holds list at the library – not to my one-click checkout at Amazon.

This is literally all due to the external commitment I made to my savings goal – and, of course, to the fact that I set a SMART goal instead of just “saving more.”

And now that I know about the Four Tendencies, I know that similar external commitments are the key to helping me stick to my habit-forming promises. 

In the context of your goals this year, take a second to think of a time when you made a not-insignificant change to a habit, or built a new one from scratch.

Did you have an external commitment to keep?

Was it a promise you made to yourself?

Do you typically challenge external requirements, like someone telling you how to achieve your goals with no rationale behind it?

Let’s take “saving more money” as an example, and look at how this framework of commitments can help give you a leg up on the inevitable three-weeks-in goal fatigue.

Find someone you’re comfortable talking about money with (maybe, for you, this isn’t the entire internet?) and share your goal with them. Maybe it’s a team effort, and you both have goals to save money this year – you can work with them to hold each other accountable!

Once you’ve decided on a set amount to save, set up an automatic contribution to the savings account you want to build. Yes, automatic contributions to savings are great for almost everyone, but this is especially good for Upholders because you’ll be less tempted to raid the account at the first possible moment.

Like Upholders, you can be committed to increasing your savings on your own, but you should tie it to a specific, important milestone or achievement you want to reach. Are you saving for a life-changing trip around the world, or a downpayment on a house for your family (or your dogs)? Make that your motivation, not just “Ugh, everyone says I should save more.” That’s not going to fly for you.

I mean, you guys are just nuts, and any system I can recommend isn’t going to work for you anyways. Maybe just avoid systems entirely.

Any self-identified Rebels lurking around? Please chime in in the comments, because I would seriously love to know what has worked for you. I’m also super interested – is this the lightbulb moment for anyone else like it was for me?

PS. If you’re looking for further reading about habits, The Power of Habit is a stellar read as well. It looks at the science behind habit formation, so if that’s more your jam – or if you just want to read a great book – I highly recommend it, and so does Sarah at The Yachtless!

The real secret to getting your personal finances in order? Knowing yourself and how you build habits. Here's how to do it and a framework to help.

Desirae is on a mission to demystify and un-boring financial info for millennials, so that we can all save more money, spend on stuff that matters to us, and still have a latte or two along the way. Money is literally why we can have nice things, and Desirae is committed to helping make sure you know just enough to make the right calls for you. (She’s also committed to her expensive dog, her side hustle, and her retirement fund.)

23 Comments on “The Secret to Building Great Money Habits”

  1. Penny @ She Picks Up Pennies

    This post is perfectly timed with the Happier podcast starting to climb the charts on iTunes. I really dove in over the summer – right before I pulled the trigger on starting my blog – and it’s been cool to see how its evolved. Happiness and purposefulness are so intertwined…and I think both of them color our outlook on finances. I don’t know that I land squarely in any one of the categories in terms of finances. But I feel like every disposition, outlook, emotional intelligence test I’ve ever taken always lands me in a weird in-between or all-of-the-above results category 🙂

    1. Desirae

      HAPPIER PODCAST? That sounds like something I need in my life for sure. I am all about positive psychology and happiness (because I mean… who wouldn’t be, right?) I’m going to go check it out now on iTunes – between that and Budgets and Cents, I’m starting the year off with some great new podcasts.

      I totally agree too, that happiness and purposefulness intersect with money in some really interesting ways. There’s probably a blog post in there somewhere for sure (or like… an entire blog’s worth of posts, haha.)

  2. Matt @ The Resume Gap

    Interesting framework; thanks for sharing! I’m naturally an obliger, without question. If I make a commitment to someone (colleague, family, friend, whomever), I keep it. If time gets tight, the first things to drop off the priority list are usually my own goals. I don’t think that’s necessarily a bad thing, but it’s worth being conscious of that tendency when trying to build positive habits.

    1. Desirae

      Definitely! I’m the exact same way with what gets dropped off of my to-do list when time gets tight – classic Obligers, the both of us! Now that I’m aware of it I’m already noticing when I feel like it’s OK to “take a break” on my habits and when it’s not – and it’s always the ones I’ve made a commitment to someone else to do that get done. It’s been a good strategy to use when I really want to add something to my life – I make sure someone else is expecting me to do it, haha.

  3. Mrs. Lewis

    I guess I would fall under Obliger as well. Although I used to be really really good and maintaining my goals keeping to them. It’s a monthly/weekly/daily process and goals don’t just happen over night. Great graphics by the way!

    1. Desirae

      I’ve gone through periods where I can be pretty good with my own goals too! It’s just that when time gets tight, I know I’m going to fall back into that classic Obliger profile and prioritize the commitments I’ve made to other people. I love your point about taking it one step at a time too – every day is a new opportunity to refresh and keep up with a habit, even past the first week of the year 🙂

      And thank you so much about the graphics! One of my goals is to actually work on adding more visuals to the blog, so I really appreciate it!

  4. Sarah Noelle @ The Yachtless

    Ooh, I love this, Des! I’m trying to be honest with myself and figure out what category I fit into (I’m a chronic liar on personality tests, so I have to be careful!). Oh gosh, I’m probably an obliger. Luckily, blogging helps a lot with that since I have to be accountable to other people, sort of.

    (Side question: isn’t it interesting how easy it would be for people to totally lie on their blogs? And yet I have the sense that people do NOT do this. A very interesting issue which I feel like someone should definitely do a research study on.)

    Wow, your yoga studio really means business! At mine, you can miss as many classes as you want, but you just lose one day off your membership each time (or you still have to pay for the class if you’re paying on a per-class basis).

  5. Alyssa @ Generation YRA

    I gotta get my hands on this book (library, yes! – oh wait, I was SO with you on the Beauty & The Beast Library goal, too)! If I could find the median between obliger/upholder (obligolder? uphliger?) – I think that’s where I’d fall! I’m always one for dropping everything for others, because I know how many people have helped me along the way to get me to where I am. But lately, I’m working on finding the better balance of holding myself accountable to health, goals, etc. The Power of Habit was amazing & seriously put clarity into a lot of actions that I do myself (as well as help explain other’s actions for an understanding). Thanks for the recommendations! 🙂

  6. Vic @ Dad Is Cheap

    I’m an obliger through and through! I am very man of my word type person. I do have trouble keeping commitments to myself. That’s what my wife is for – to make sure I’m doing all I can to better myself!

  7. Suze Wannabe

    I suppose I am a rebel. As a scientist, I have to know “why” about everything. I thought Calculus was stupid until I took statistics- then lightbulb moment. Ah hah!
    I want to know how things are made and why they work or not.
    Latest example- I bought a vintage air corn popper to try my hand at roasting my own coffee.
    My spending weakness, aside from clothes, is experiment stuff.

    I chortled at your description of a library as in Beauty and the Beast. Lol.
    Are we driven by fantasy?

  8. Alyssa

    Hey Des. Can I call you that now that you’re not anonymous and we’re clearly best friends forever? Okay, great. I am 100% a “Questioner”. Most people in my life would consider me a flake, but I promise I try my best to stick to outside commitments. This means that together, you & I would be the perfect upholder.

    No, but in all seriousness, this is a great realization for me. I think I’m fairly good with my SMART goals and ensuring they are realistic and attainable, so I guess it’s just finding ways to stay motivated.

    1. Desirae

      Hahaha yes of course you can, and I’m sorry for the delayed reply! And oh man would I ever love to be a Questioner – I think you have a superpower! Basically you’re always doing prioritization and only working on the habits and goals that make sense to you and what you need to be doing – that’s so good!

      But we could totally be a two-headed Upholder together and just crush goals all the time too. Think of how much we’d get done!

  9. Taylor

    So nice to officially “meet” you, Des 🙂 Can’t wait for the day we get to meet in real life! FinCon 2016? 😉

    I love the framework you used for this post. It’s so interesting to think about! As you know, I love every kind of “personality type” thing and this is one I haven’t heard of, so thanks for introducing me!

    I am a Rebel, through and through. It doesn’t matter how much I try to shame myself into something (i.e.. public accountability, promises, lists, etc.) I will not accomplish a goal unless I feel an intense internal drive to do so. For some reason, I always assumed that everyone else was like this, haha. But it makes total sense that they are not. In order for me to be successful at anything (working out, career, school, relationships) my desire to accomplish it HAS to come from within. In a lot of ways, it’s horrible because I cannot “force” myself to do anything, even if I want to. But in other ways, it’s a huge blessing because once I am committed to something (or someone) I am ALL IN, no matter what happens. So once I commit I’m unstoppable, but getting to that point can be a pain in the butt, hahaha.

    Great post as always, Des 🙂 Happy New Year!

    1. Desirae

      Thanks Taylor! And if the Canadian dollar ever gets its act together I would so be in for FinCon – it’s in your backyard this year right? So lucky!

      And it’s so cool to hear from a Rebel, especially one I respect so much! I think that really is the only key – it has to matter to you, deeply. I think that’s kind of awesome in its own way, although definitely harder to convince yourself of that level of conviction. I’m especially impressed because it means all the stuff you’ve been writing about and sharing on your blog really is just truly that important to you! Because girl, you have some serious willpower – you’re killing that debt! So so so happy for you and excited!

    1. Desirae

      Hahaha you and me both Melanie! Although you did just pay off a giant, giant pile of student debt – that was a commitment to you and involved some pretty impressive habits that stood the test of time! You get some Upholder points for that for sure 😉 (but as a fellow Obliger, I know what you mean entirely!)

  10. Rob @ MoneyNomad

    This is a great insight that I really haven’t heard in the past – the idea that people have different motivators for upholding their habits. But it makes complete sense. That’s why a habit can be easy for you, but difficult for you to teach me – because we both need different incentives.

    Thanks for sharing and I’m looking forward to seeing more posts from you and hope to be up with you shortly – saving half my income.

    have a great start to your 2016!

    1. Desirae

      Hey Rob – thanks for stopping by and for the thoughtful comment! I totally agree, and this perspective has totally shaped a lot of my (future) writing about money. It clearly isn’t going to help anyone other than people who share my type if I just share what has worked for me, which is why I’m looking into doing more interviews and guest posts over the next few months, so other people can share their perspectives and successes as well! It’s also what I love about reading posts from other bloggers 🙂 On my way to check out your blog now to do just that!

  11. Ms. Steward

    Loved both books you mention. And as others above said, I’m all for the Happier podcast.

    I’m a questioner so I may be wrong on this, but I would think if having savings could be framed as freedom to rebels enough, they could successfully save. Not because it has to constrict them, but so they’re never beholden to “the man” again.

    1. Desirae

      Oh I love that framing! I have a few friends who I know are total rebels so I’m going to run it by them, haha.

      And I have been SUCH A SLACKER about getting on that podcast – downloading now to get me through my cardio sessions at the gym!

  12. Belle

    I am a Rebel. And I’m very sad to see that I’m a Rebel. But thank you for the post because I now realize why I’m not able to save enough for my emergency account and why I keep thinking it’s ok to spend from it. And also, I now know why I pay for 10 classes of yoga and never go to more than 6 of them.

    I’m not sure this is a sound piece of advice for the majority of people but what I have found works for me in terms of saving, is to have my money in places where there is a high cost for moving money out of there, or where it is difficult to move your money out. For example, I used to use online investing but now, I’m with an advisor where a phone call is needed if I want to take money out. Knowing that I have to call someone to request a withdrawal makes me feel guilty and therefore, I don’t normally consider this option when I’m low on cash flow.

    Hope this helps!

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