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Habit stacking: Easy and effective way to improve your finances

Habit stacking helps you save by using habits you already have.

A composite image of a woman looking at her smart phone by habit and Australian money.
Aussies could improve their financial wellbeing by habit stacking. (Source: Getty)

It can be so hard to implement new habits into an already-busy schedule to improve your financial well-being, but what if you could save money by sticking to your regular routine?

This is where habit stacking comes in. Habit stacking is an easy way to improve financial well-being without changing your daily routine.

The practice is all about pairing a habit you already have with a habit you want to ingrain into your daily routine. For example, if you’d like to get into the habit of drinking more water, you might pair drinking a glass of water with making your morning coffee.

Finance expert at ANZ Jade Khao said linking a daily routine with checking a bank balance, paying a bill or topping up superannuation would have immediate and long-term benefits.

“Developing better money management doesn’t need to be stressful or complicated. Habit stacking shows that you can incorporate healthy, financially focused behaviours into daily life with very little effort. Before you know it, they’ll be part of your routine and you won’t even notice you’re doing them,” Khao said.

“Habit stacking is about making small and simple changes, and you’ll feel the benefit immediately and years down the track if you stick it out. Immediately, you’ll feel more aware and in control of your finances and, over the years, you’ll notice how your savings and superannuation have grown.”

Here are Khao’s suggestions to help you get started with habit stacking.

1. Achieve financial and physical fitness

Whether you’re a self-confessed gym junkie or just in the habit of going every week, why not attach a savings habit to your normal endorphin-raising routine? This could mean saving the cost of your weekly membership repayment, or a specific portion of your wage.

2. Reading a book before bed and check your budget

Knowing where your money is at is essential to a healthy savings account. If you’re someone who reads a few pages of a book before bed, try adding a nightly or weekly check of your budget to your night-time routine too.

3. Check social media and pay a bill

For many people, being on social media platforms is an almost-automatic habit. Instead of watching or creating social content, you could use this time to pay off a bill or schedule your next payment to ensure you keep up to date.

4. Friday night movie night and add a little extra to your super

While it may not seem relevant right now, one day you will need your superannuation to retire – and hopefully, you’ll have saved a decent amount. So, when you next order that Friday night takeaway, consider topping up your superannuation fund with an extra contribution too.

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