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Use Science to Make You Healthy, Wealthy and Wise

Have you thought about what success means to you in your financial life or personal life? Behavioral science can help us clearly understand action items to achieve our desired success. For example, is there a gap between what you want to do and what you actually do? We are generally optimistic that we will do what we should do, this is called optimism bias, but the truth is that most people don’t save for retirement, they don’t set up and document processes in business and they procrastinate planning for taxes. What if science could help improve your success at reaching your goals and ambitions?


We all tell ourselves that we take action to reach our goals - we will do it tomorrow or this weekend or next month. However, we are bad at predicting the obstacles that will keep us from our goals. Things such as family interruptions, friction in the process or just plain life get in the way of us reaching our goals.


The Three Bs represent a scientific way to keep progressing to your goal. It’s called Behavioral Design and it demonstrates how you can shape your environment to reach your desired outcome. Information will not actually change your behavior because you will feel overwhelmed and you will likely procrastinate. Success will come when the process (the steps to reach your goals) becomes your default routine. The key to succeeding at your goals is to remove the barriers to getting things done and implement the Three Bs into your life.


Behavior (Identify) - In order to change something, you must identify the behavior that you want to change. If you want to eat healthier, you could determine that late night snacking is the behavior that is keeping you from your goal. If you want to save more for retirement, you realize that you didn’t set up an automatic withdrawal from your bank account. When you identify the current behavior and then automate the behavior that you are seeking, you greatly increase your chance of success


Barriers (Remove) - Success is increased when you remove the barriers that keep you from your desired behavior. For example, if you want to get up to exercise in the morning, you can put your workout clothes out on the dresser and put them on first thing when you get up. Removing the barrier of finding your clothes sets you up for following through on your morning routine. In order to set a habit of keeping receipts to back up your business expenses, use a receipt capture app on your phone to make it easy to keep copies of your receipts.


Benefits (Increase) - Acknowledge the benefit you will receive from attaining your goal. For example, if you start adding $10,000 to your retirement account each year, you can calculate that you will have $120,000 in retirement funds in 20 years if you follow a systematic plan. Setting up a bookkeeping system in your business to access financial information will help you review your results on a monthly basis. When you review results often, you are much more likely to build wealth in your business.


Join a community that helps you to celebrate your milestones. The value of community can help you overcome the friction we all face in trying to achieve great things. We can help share experiences and build each other up. I like to run races and recently I was injured. In order to come back from my injury I had to build back to a certain fitness level for my race. I didn’t see the benefit of running one day at a time, in fact it was really hard to get back out and run. But after a month or 6 weeks, I could look back and celebrate my progress. Better yet, I have a group of friends to cheer for each of my milestones.


Don’t underestimate the value of a community to help keep you accountable and to help you celebrate as you reach your goals. Most people don’t talk about their financial goals. Do you know your brother’s savings rate or your friend’s bank account balance? Likely these are subjects that you don’t feel comfortable talking about. That is why it is important to join a community to share financial mistakes, ambitions and goals. Science proves that when we share our goal with one person, we are more likely to change our behavior, remove the barrier and experience the benefits of reaching that goal.

 

If you’re curious to learn more about behavioral design be sure to check out Irrational Labs, you can find them on LinkedIn.


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