The science of habit change

In this guide, we’ll walk through how Wisr Today can help you develop new, more helpful, money habits. It’s based on Cognitive Behavioural Therapy, which is a goal-oriented psychological approach.

What's in this guide?

Q1: What is Cognitive Behavioural Therapy CBT?

Cognitive Behavioural Therapy or CBT is an evidence-based approach that’s effective in helping people with a range of different challenges, including behaviour change and managing stress, anxiety, depression. 

CBT is based on research showing that our thoughts, feelings, body sensations and behaviour are connected, and that the way we think and act affects the ways we feel.

For example, feeling anxious is associated with certain:

  • Thoughts.

    We often have negative, unrealistic thoughts that centre around predicting that something bad might happen.

  • Body sensations.

    We may feel tense or shaky in our body.

  • Behaviour.

    We can be tempted to avoid the triggers for our anxiety or take actions that numb uncomfortable feelings.

This can lead to negative cycles of thoughts, feelings, body sensations and behaviour that keep us stuck. But CBT makes it possible to shift these negative cycles. 

Wisr Today uses CBT to help you improve your financial wellbeing. Our Habit Coaching helps you to better understand your thoughts, feelings and behaviour so you can make positive changes to your money habits and feel better about your finances overall.

Q2: What is a habit?

A habit is a behaviour that we do on a regular basis without much thought, like buying coffee every morning or using a credit card to pay for things. 

Our brains are designed to repeat routines and conserve energy by being on autopilot. Habits save us needing to think about each and every action we take day-to-day. 

Our automatic habits are often triggered by something in our day to day life – a certain time of day, situation, person or emotion.

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Helpful habits serve us to have a happier and healthier life, while unhelpful habits tend to get in the way of the things we want to achieve. 

Because habits tend to be automatic, we often aren’t even aware of them. They can be quietly wreaking havoc on our lives without us even realising.

Q3: How do habits develop?

Any habit starts with a single action. When it’s repeated again, and again, it becomes hardwired into the brain in the form of a neural pathway. 

What fires together, wires together.

Every time this collection of nerves is triggered together, the neural pathway becomes more established. That means that the behaviour will happen more easily and more automatically.

  • Habits develop through repetition and can be really supportive.

    For example, brushing our teeth is something that most of us have repeated daily ever since we were kids. We don’t stop each day to think, “Will I clean my teeth today?”. This well-established habit has been firmly embedded in a neural pathway, so it happens automatically.

  • Sometimes we have deeply ingrained habits that are not helpful and that we’d like to change.

    Take doom scrolling, drinking, smoking and impulse shopping, for example. Unhelpful habits like these can also have been happening repeatedly for many years and formed well-worn pathways in our brains that make them happen automatically.

With awareness, practice and the right support through real-time daily coaching, it’s possible to develop new neural pathways in the brain that are associated with habits that serve us.

Q4: What do habits have to do with money?

Our financial life is full of habits. Money habits are regular, and mostly automatic, ways we spend, save and manage our finances. 

Our money habits can help us to achieve our financial goals, or can undermine our ability to do so.

An example of a helpful money habit might be automatically transferring money from your pay into a savings account each month. They are the key to our financial health.

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Unhelpful money habits can include buying things when we’re bored or upset or putting expenses on credit without thinking. 

When it comes to money habits, we all have our own kryptonite. You might have a habit of making impulse purchases, buying takeaway a few times a week or using ridesharing more often than you’d like.

Q5: Where do money habits come from?

This might come as a surprise, but researchers at Cambridge University have found that our money habits are largely formed by the age of 7! 

Long before we earn our first pay cheque, we’ve already developed patterns that will inform our spending and saving. 

All of the things we learn about money as a child, especially what we picked up about how our parents talked about, spent and saved money, form a set of beliefs and preferences. It’s this ‘money mindset’ that shapes our money habits.

How we respond to our uncomfortable feelings and learn to make ourselves feel good are usually behaviours we learn as young children.

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This influences what we do when we’re feeling anxious or bored as adults, which is often closely connected to how we spend our money.

Q6: How much are your money habits costing you?

When we think about our money habits, they might not seem like much. We might spend a few dollars here and there, but no real damage, right? 

But when you consider how a single money habit adds up over time, it can tell a different story.

Maybe you spend $4 a day on treats. It doesn’t seem like much, huh? Just small change! And treats can be a nice pick-me-up and a reward for all your hard work. You deserve it, right? 

When you add it all up, you can see that this habit costs almost $1,500 a year! That’s not chicken feed!

When we look at each of our money habits in isolation, it can be hard to see the point in changing them. But every single money habit we have costs us hundreds or thousands a year. 

A habit that costs $100 a week e.g. 3 rideshares adds up to over $5,000 a year.

You don’t need to cut these things out of your life completely.

It’s important to get off autopilot and weigh up what you’re spending versus what you’re actually getting out of it, and whether it’s helping you move forward in life.

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Q7: How do you change an unhelpful money habit?

Money habits can be very stubborn, but that doesn’t mean we can’t change them. Because habits happen … well, habitually … it takes conscious effort to change them. 

The steps that are needed to slowly, but surely, shift unhelpful money habits include:

  • Becoming aware of the habit.

    We can’t change what we’re not aware of. So the first step is simply taking notice of our habit.

  • Identifying the triggers.

    Understanding what sparks the habit can help us to design a helpful first step for change.

  • Taking a new action.

    When you encounter the trigger, you choose to take your new action instead and then celebrate that you’ve done it!

  • Repeating the action to form a new habit.

    Because the new action is easy and feels good, you’re bound to repeat it, effectively building a new, more helpful, habit.

Fortunately, our brain is designed to support us to make changes to our money habits. By practicing new behaviours, we can lay down new neural pathways, replacing unhelpful money habits with more helpful ones.

Q8: What are helpful money habits?

Helpful money habits are the regular ways we spend, save and manage our finances that support us to thrive. 

Some examples include being mindful about purchases and following a budget just make sure you have enough ‘fun money’ in there to make it sustainable.

Helpful money habits don’t need to be boring or arduous. There are ways to develop helpful money habits without missing out or sacrificing your quality of life.

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Q9: What are baby steps and why are they so powerful?

Question: How do you eat an elephant? 

Answer: One bite at a time. 

Changing a long-standing money habit can feel overwhelming and when changes feel too big or hard, our attempts to achieve them are often short-lived. We try in earnest for a couple of days and then give up when life gets busy or it feels hard. 

The most effective way to change an unhelpful money habit is to break it down into baby steps. 

  • Design a baby step.

    A baby step is a small and simple action that takes you towards your money goal, and that’s easy enough that it’s no sweat to repeat it.

  • Follow your baby step with an intentional celebration.

    An intentional celebration is a fun and rewarding action to mark your achievement. It’s a clever dopamine hit you design for yourself.

  • Enjoy the dopamine hit!

    Every time you succeed in doing your baby step and intentionally celebrate, you’ll feel a rush of this “feel good” chemical in your body, which can be great motivation to do it again.

  • Practicing this regularly is the key to success.

    Using our Habit Tracker feature will make it far easier and more fun to remember and keep track of your progress than trying to do it on your own.

Because the baby step is easy enough and feels good, you’ll want to repeat it again and again. Once you’ve got your first baby step down pat, you’ll be ready for your next one, and then your next one. Step by step your new habit will become second nature. 

For example, after a while it will feel natural to go for a quick walk on your break rather than spending money on a sugary pick-me-up.

Q10: Why is it important to address our money habits?

According to the Australian Psychological Society, Aussies say money is their top cause of stress. 

Add to that the rising cost of living and it’s not surprising that many people are looking for some financial relief or solutions to help. 

Looking at our money habits is a smart and effective way to offset any increases in the cost of basics like groceries, petrol, housing and utilities, as well as to start achieving bigger life goals that require money.

Finding a few extra dollars each week can turn a grim situation into one of more ease and hope. Remember, the answer is starting small and taking committed action. You can do this by building 5 minutes of coaching into your daily routine.

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Q11: How can Wisr Today help?

Wisr Today provides daily habit coaching and features that help you track your money habits so you can see exactly how much you’re spending and make sure that you’re using money in ways that serve you.

It was developed in partnership with leading psychologists to help you change your money habits and get smarter about money.

Here are the core features:

  • Daily coaching

    Bite-sized lessons guide you through changing your spending habits and saving more in just 5 minutes a day.

  • Habit Tracker

    Keep track of how much your spending habits are costing you and make changes that save you money.

  • Quick wins

    These quick and easy changes can pay off big-time.

  • Joyful Savings

    Learn to save without sacrificing your quality of life by becoming more aware of your spending.

  • Self-serve library

    24/7 access to lessons on a huge range of financial and psychology topics.

You can download it now on iOS or Android.

Q12: Habit FAQs

1 What do unhelpful money habits look like?

Unhelpful money habits are regular, automatic behaviours that undermine your financial wellbeing. They might have you spending every penny you earn, racking up debt or avoiding keeping track of how much you’re spending.

2 How long does it take to change a money habit?

If you start small and keep taking gradual steps, change can happen surprisingly quickly. By using Wisr Today, you can make significant changes to a single money habit within 2-5 weeks.

3 How much could I save in a year with Wisr Today?

Our users save $377 per week on average!

If you tend to spend a lot on coffee, it might be within reach to save $10 a day.

That’s $3,650 a year. 

Once you’ve cracked that habit, you might choose to work on your gaming or clothes shopping habit. If you spend $50 a week on these things, you could save another $2,600 a year.

The number of habits you can change is limitless. And each and every one adds up. Most of our users save thousands of dollars per year.

4 How do I form a saving habit?

One of the best ways to form a saving habit is to identify your money drains, that is, the things you habitually spend on that aren’t actually giving you long-term value or pleasure beyond the moment of instant gratification. 

These unwanted spending habits can be a veritable gold mine! Every time you choose not to spend, it becomes a saving. Simple as that! 

By logging these intentional savings in our Joyful Saving feature you can track them and have them moved into your personal savings account. Before you know it, saving money will be happening without you even thinking about it. That’s a savings habit.

5 Is it hard to change a money habit?

Trying to change an ingrained habit can be a challenge, because these behaviours come easily and automatically to us. But Wisr Today is here to hold your hand through the journey.

All you need is the motivation to make a change and the willingness to be coached for 5 minutes a day. Make it part of your daily routine, whether it’s with your morning coffee or on your commute. 

The key is to start small and focus on changing just one habit. Depending on your habit, this could save you hundreds or even thousands per year. 

Our daily coaching will naturally keep you on track and make it easy to apply the science of behaviour change to your life, so you can make long-lasting, feel-good changes to your money habits and life.

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Disclaimer: This article contains general information only, and is not general advice or personal advice. Wisr Services does not recommend any product or service discussed in this article. You must get your own financial, taxation, or legal advice, and understand any risks before considering whether a product or service discussed in this article may be appropriate for you. We have taken reasonable efforts to ensure that the information is accurate at the time of publishing, but the information is subject to change. We may not update the article to reflect any change.

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