Oscarlyn Elder:
Breaking bad habits and forming good ones is difficult. Really difficult. We try to change our behaviors by making resolutions in January as well as during the year, but we often fall short in following through. But change is possible if we understand how habits form and remember a few key pointers in creating new behaviors.
I’m Oscarlyn Elder, co-chief investment officer for Truist Wealth, and this is I’ve Been Meaning To Do That, a podcast from Truist Wealth, a purpose-driven financial services company. We appreciate you listening.
Some of the most common resolutions we make are focused on our financial behaviors, such as saving more or increasing our retirement contributions. Our guest for this episode, Dr. Wendy Wood, is a researcher who will provide insight on what’s going on in our brains when we try to stick to these resolutions and actions we can take to create new behaviors.
If you want to take notes on today’s episode, we have a worksheet you can download and print. You can find it by selecting this episode at Truist.com/DoThat.
My guest is Dr. Wendy Wood, provost professor emerita of psychology and business at the University of Southern California. Wendy is a widely published researcher on the psychology of habits and is the author of “Good Habits, Bad Habits, The Science of Making Positive Changes That Stick.”
Wendy, welcome to I’ve Been Meaning to Do That.
Wendy Wood:
Great to be here with you today, Oscarlyn.
Oscarlyn Elder:
It’s great to have you here. And habits are really front of mind, I think, for a lot of us. Specifically, how to change them, make them better. I wanted to start off with asking you, why do habits matter? Why are they important to us?
Wendy Wood:
Well, they’re important because so many of the goals that we want to achieve in life are ones that involve repeated behavior. So, we all know you can’t go to the gym once and expect that to have much influence on your fitness, or you can’t save money one month and then expect to retire comfortably.
Those things just don’t happen. They require repeated, consistent behavior. And that’s where habits come in. They’re how we repeat behaviors naturally in daily life.
Oscarlyn Elder:
So, it’s that repetition, automaticity—that’s a word that comes to mind that you shared.
Wendy Wood:
Exactly. Yes,
Oscarlyn Elder:
Habits really help us structure action. They help move us to action.
Wendy Wood:
They do for repeated actions. Once we establish a habit, all you have to do is be in the context where you did a thing in the past and the action automatically comes to mind. That’s that automaticity you were talking about. So, habits remove decision making, right. We don’t have to white knuckle ourselves through life. We can just do the behaviors that have worked for us in the past without much struggle, without much strife.
Oscarlyn Elder:
And I guess that habits help us avoid decision fatigue.
Wendy Wood:
Exactly. Yes. So, the typical habit that most people think of is our morning routines, right. We can brush our teeth, we can take a shower without thinking much about what we’re doing. We just repeat what we’ve done in the past, and usually it frees us up to think about other things, like, we can plan our day or we can ruminate about something that happened yesterday.
So, habits are not only efficient, but as you say, they free up our minds so that we can plan and do other things.
Oscarlyn Elder:
You think about resolutions, which—beginning of the year, folks often set an intention, a resolution, that if you’re going to a set an intention, you ultimately need to act on that intention. So, how do you think about resolutions versus the individual decisions that you were just talking about?
Wendy Wood:
Well, when people make resolutions, they’re usually thinking about the ultimate goal that they want to achieve, right. So, they want to lose a certain number of pounds, or they want to save a certain amount of money. So, we focus a lot on the ultimate goal without focusing as much as we should on the specific behaviors that get us to that goal.
If you focus on a big goal, like losing weight or saving money, it can get pretty overwhelming to think, what am I going to do to get there? But how people get there is, they form habits to perform specific behaviors. And it’s those behaviors that you need to worry about, not the goal. The goal, it will come if you repeat the behaviors often enough. And that’s where automaticity comes in.
Oscarlyn Elder:
And so focusing on the little behaviors that get you to the goal.
Wendy Wood:
The day to day.
Oscarlyn Elder:
The day to day.
Wendy Wood:
Yeah.
Oscarlyn Elder:
As you think about habits, I guess broadly and specifically, are financial habits different than other habits in our lives? Like, you’ve mentioned nutrition and exercise, which are often goals that many of us have, but do you see any differences between the financial aspect and perhaps the physical and the emotional, the nutritional, the other elements?
Wendy Wood:
Well, we only have one habit learning system, so we learn habits in the same way, no matter whether they’re financial or health or have to do with our relationships or our productivity at work, school, studying. All of those they involve the same process.
And the process is this: So, habits form when you repeat a behavior in a particular context over and over again, and it gets you some reward. And that reward is really important for forming habits because we don’t repeat behaviors that aren’t working for us in some way. We’re pretty simple creatures in terms of the habits, the kinds of habits we form. We tend to do the things repeatedly that are rewarding. And that’s not financial—I don’t mean a financial incentive.
Oscarlyn Elder:
I was going to ask you about that. What do you mean by reward?
Wendy Wood:
It’s just something that’s working for you, that’s meeting some immediate goal, satisfying some immediate need. And that’s the kind of reward that forms habits. Something that is likely to release dopamine because dopamine—people think of it as the feel good chemical—but dopamine is released when we experience something that’s pleasant, something that’s good for us, makes us feel good.
And dopamine has many functions, one of which is it ties together where you are, the performance context with what you just did in order to get that reward. And that’s a habit memory, context and response. That’s the habit memory that you’re trying to build. But habits build only slowly, so you have to keep repeating the behavior. You can think of it as a kind of a cumulative effect where you have to keep repeating it and building on the habit memories until it becomes automated and you don’t have to think about it anymore.
Oscarlyn Elder:
So, something in what you said made me think about, I’m thinking about rewards. And again, as you indicated, not like financial rewards, but it’s really more an internal reward that comes from this repeated action. And it made me think of, like, during Covid—such really a traumatic time for so many of us—one of the things that I got in the habit of was at home and really fell in love with tea, green tea, specifically. And folks who know me know that I love my green tea. I learned a lot about green tea during Covid. Other folks were making sourdough bread, and I was learning about green tea and how to properly steep it, and the different kinds.
But in that context, the mug—because I drink maybe two cups—the act of actually brewing, steeping the tea, holding the mug, drinking the tea brought a very calming effect over me. And as I emerged out of Covid, that was part of my routine that I’ve kept because it brought me comfort. So, like, starting my day off every day with that progression of activities has really become a trigger to, like, centering me, to helping me set my day off in a positive way. Anyway, it’s just that thought of the reward being again, more internal.
Wendy Wood:
Yes. That sounds like a wonderful example of how we form habits, because that picks up two important components. One is, it was rewarding and it was rewarding to you immediately. So, the experience of drinking it made you happy and calm. And those are the kinds of rewards we’re talking about. But also the second component that’s also important is that because you were at home, it was pretty easy to do that.
And that’s something that we tend to overlook. We think if our commitment is strong enough, if we’re serious enough about meeting this goal, starting this new behavior, it won’t matter how difficult it is. We’ll be able to sort of power through in some way. But that doesn’t work for most of us, because few of us can stick with something that’s difficult
long enough to form a habit.
So, what you learned is, take advantage of what’s easy to do and what’s rewarding in your current context that can help to center and start your day. Now, let me elaborate on that a little bit, because the rewards don’t have to be what we think of as intrinsic or inherent in the activity. I used to be a runner and I loved to run outside. It’s easy. You can do it anywhere. Just put your sneakers on and go.
So, I found it easy to form a running habit, but as I’ve gotten older, it’s a little harder to get out and do it. And I bought myself an elliptical machine thinking if I had it at home, I’d do that instead. But it didn’t happen, because it’s boring and I couldn’t make myself do it until I figured out that I could watch these stupid reality TV shows while I’m working out, and I don’t have time during my day normally to do that.
So, it became the thing I do when I work out on the elliptical. It’s not inherent in the elliptical, but it is in my experience of it. And so I’ve been able to form a habit by figuring out something that makes the behavior enjoyable, makes it fun.
Oscarlyn Elder:
Along those same lines, it makes me think about my fitness routine, and my workouts now involve working out with a group of people virtually. I don’t go to the gym, but I have everything I need here. I have a virtual trainer. He’s fantastic. And a group. And it’s that group connection that makes it bearable.
And it’s been bearable now for a well over a year. I think we have about 18 months of togetherness. And so long enough to form that long-term habit, that long-term behavior. But man, it’s so much better doing it with somebody in this situation. It’s just really helpful to have other people virtually around.
But that’s—for me, I’m very people-driven—that was something that I needed to help me develop the consistency of that particular habit.
Wendy Wood:
That’s also a wonderful example. And I do tell people that having an exercise buddy is great, because it does make it rewarding. You can share all kinds of stuff while you’re working out and that other person can help cue you. They can be a motivator. They can cue you to actually get out there and exercise.
So, it does many things, structures it into your day and makes it more fun.
Oscarlyn Elder:
Are there other examples of rewards that you would want our listeners to just know about as they’re thinking about how to establish habits? Are there other things that you’ve seen that are creative or unusual that may help them on their journey?
Wendy Wood:
Yeah. So, you have to be realistic. If you really hate doing something, it’s not likely to become a habit, and a lot of people view finances in this way, right. Saving money is no fun. It feels like self-denial, like you’re stopping yourself from getting something you really want. So, it feels like a struggle.
And I always think about my parents when people talk about the difficulties they have with saving and not spending. They were very careful with money, but they enjoyed it. They viewed it as them sort of beating the system, right. So other people spent money on things that they didn’t think were necessary, and they enjoyed feeling smarter than the average person who struggles with saving.
And I think that’s also kind of an interesting perspective, because it suggests that you can find ways to enjoy behaviors that initially might seem more challenging. So, getting a great deal on something really does feel good. And knowing how to do that, that’s an opportunity. So, starting to think about saving in terms of the opportunities you have to be smart with money is a different framing, and that can feel rewarding.
Oscarlyn Elder:
Yeah. As you were relaying that story, the word that was coming to mind was “framing.” Your parents framed their behavior in a particular—really framed their values in a particular way, and they were able to exercise behaviors that supported those values.
Wendy Wood:
Exactly. And that became their habit. They always were looking for the cheaper opportunities and ways to save money. And it served them well in their life.
Oscarlyn Elder:
It sounds like it really became part of their identity as well, that it became who they were. And so to your point, exploring if we have financial goals that we’re looking to accomplish and habits that we would like to build to support those goals—really thinking through how you’re framing the behaviors, framing everything that you’re doing to support ultimately getting to that goal, supporting that goal system, supporting the habit system, the framing of it, and perhaps finding the fun in it for you, right.
And it’s not going to be the same thing for everybody, but if it’s drudgery, then you’re not likely to continue the behavior. If it feels like constant restriction, if it has a negative framing, it’s going to be much harder to follow through. So, finding a positive frame for you so that you’re enabled to take the action and in essence have the gratification moment, kind of, in the instance when you’re taking the action in your frame, but then also perhaps the greater financial consequence down the road when you’re able to retire earlier, or you’re able to take that trip that you’ve wanted to take or send your kid to the college that they want to go to, kind of—whatever that goal is, having an ability to kind of share in that joy, that positiveness early with your framing. It sounds like that’s very important.
Wendy Wood:
It is. My parents never had a lot of money, but they were able to figure out how to get joy out of something that other people view, as you say, as restrictions. So, it’s possible to—and just like my experience with the horrible elliptical machine that I struggled with for so long—it’s possible, if you figure out ways to make behaviors more fun, that they can become part of your repertoire, even though they might seem difficult to begin with.
Oscarlyn Elder:
I’d like to pivot for a moment and talk about breaking habits, because we’ve been focused on really the framework for building habits that support your goals. Often we have habits that we’re wanting to change around or to eliminate completely to also help us meet those goals. How do you think about that habit breaking framework?
Wendy Wood:
Well, people often, again, believe that they should be able to do this, change their habits by making decisions or by committing themselves to some new behavior. But that’s not how habits work. Habits form really slowly and incrementally. They accumulate with repetition.
Oscarlyn Elder:
What do we mean by really slowly? So, the co-chief investment officer in me is coming out. Like, are we talking a month? Are we talking six months? How long until really slowly gets there?
Wendy Wood:
Until it becomes automated so you don’t have to think about it. That’s the goal for most of us.
Oscarlyn Elder:
OK. And that can take a while.
Wendy Wood:
It sure can.
Oscarlyn Elder:
I mean, it can take months, I’m assuming.
Wendy Wood:
It depends on how complicated the behavior is. So, some behaviors, like wearing a seatbelt, you figure out in your car where to reach and then you form a habit pretty quickly. You can have a habit maybe in a week or two without even trying.
But other behaviors, like saving money, not spending, getting to the gym, all of those have more complexity, more steps to them. And so they’re going to take longer, more repetitions.
Oscarlyn Elder:
It also strikes me that they have more opportunity for the environment to try to prohibit one from doing it. So, when you’re in the car and all you’ve got to do is either, like, you know, hit the button to start the car or get your seatbelt on, there’s not a lot of friction there. But in our daily lives, there’s a lot of friction.
Wendy Wood:
And a lot of change. So, you can’t always anticipate whether the gym is going to be open, whether the equipment you use is going to be available, whether the trainer you work with is going to be sick that day. I mean, there’s all kinds of uncertainties in life, and they make more complex behaviors more difficult to turn into habits. But ultimately, if you repeat things often enough, your brain starts to pick up the parts of the experience that are consistent and so will automate as much as it can.
That happens without us trying. It’s a wonderful part of habit memories. They work even when we’re not aware that they’re working for us.
Oscarlyn Elder:
And we need that. We cognitively need those habits working for us so that we don’t get overloaded.
Wendy Wood:
To simplify, we need mental shortcuts.
Oscarlyn Elder:
We do.
Wendy Wood:
But your question was about change.
Oscarlyn Elder:
Yes.
Wendy Wood:
And because habit memories form slowly, they don’t decay very quickly, either. Which is also great, because you don’t forget important things in life, like how to ride a bicycle, right. You learn that, that tends to stick.
And that’s similar to many habit memories, is they’re there long after we stop using them. So that if we go back to that old context, if we get back on that bike again, it only takes a little bit of brushing up before we’re doing things automatically without having to think about them.
But that’s a challenge for changing habits, because, right, we make these decisions, we vow we’re going to change. We know all the reasons why we should. We rationalize them, try to make the new behavior happen, but that effort isn’t going to change the habit memory. It’s still going to be there. Even after we get tired, we’re no longer trying to change, that habit memory will still be there.
So, effort, will power, decision making, not going to have much effect on our habits. So, what does? Well, changing the context so that old habit is no longer cued is a great way to change behavior. We’ve all had the experience of going on vacation and having to think about brushing our teeth, because we have to find the toothbrush and then we have to find the toothpaste and then we have to figure out, OK, can I use the sink or maybe I need to use bottled water if I’m traveling internationally.
It’s a lot of decision making that goes into something that’s normally just an incidental part of our day. And that illustrates what we have to do when we don’t have a habit that’s queued up. We have to make a decision. And that’s helpful if we’re trying to change our behavior, because then it’s easy. We’re not fighting our habit memory system. We’re just learning anew.
Oscarlyn Elder:
So, if I’m translating that into my everyday life, if there’s a habit that I’m looking to stop, thinking about the environment and what the environment is like, maybe as I’m activating that habit, and trying to shake that environment up some is part of how to change the habit.
Wendy Wood:
Exactly.
Oscarlyn Elder:
Creating a different context around my behavior so that almost I have to slow my brain down to force my brain to think about what is the decision that I want to make.
I don’t just want my body to take over with my muscle memory, with my habit memory. I want to kind of bring it to a higher level and slow my brain down so that I can make an intentional decision that supports the change I want to make. Is that fair?
Wendy Wood:
Yes, but hopefully you have changed the context already so that the habit isn’t activated to begin with. And let me give an example. I have a good friend who is very smart about money, and whenever we go out, she doesn’t, have her credit cards with her most of the time. Instead, she carries cash because it’s a little harder to pay with cash. You have to count out the money, and it feels different to pay with cash.
Which is why we’re all encouraged to buy things with a credit card. Merchants like us to do that. But she pays with cash, and that has changed her purchasing habits. So, if she uses a card, it’s much easier. If she uses cash, she has to think a bit more.
So, it’s a very smart habit. She says a lot of people make fun of her for it, but there’s good data behind altering our environments like that so that we aren’t automatically performing behaviors that we don’t want to. It’s a reason why some people don’t put their credit card numbers into purchasing sites online,
Oscarlyn Elder:
Right, because they don’t want it to be easier when they come back to make a purchase.
Wendy Wood:
Exactly.
Oscarlyn Elder:
It’s a hurdle. It’s a challenge to completing the transaction.
Wendy Wood:
Yeah.
Oscarlyn Elder:
Slows things down. It’s a hurdle.
Wendy Wood:
Yes.
Oscarlyn Elder:
And what about reward? So, if you’re trying to change a habit—we talked previously about how habit building, it was helpful if there was a reward attached, often internal—but in this situation, how do you make a habit that you want to stop less rewarding? What does that look like?
Wendy Wood:
I think it’s easier instead of talking about rewards—because it’s hard to change rewards on your own behavior—I think it’s easier to talk about friction.
Oscarlyn Elder:
OK.
Wendy Wood:
So, one of the other ways of understanding what my friend is doing when she doesn’t bring her credit cards with her and brings only cash, is she’s adding friction onto the behavior of purchasing. So, removing cues to buying things automatically and then adding friction so that it becomes a little bit more difficult are very useful ways of changing our habits and friction in the physical environment. Stops motion, right. Friction psychologically does just the same thing. It stops our behavior.
And there are three things that we know are pretty good at creating friction. One is distance. Another is time. And a third is effort. One of the studies I love the most was a very early project done by some researchers in a four-story office building. They were trying to get people to take the stairs and quit using the elevator so much. So, they put up signs all over the building. I mean, this is just the way we always start changing our own behavior, right. Convince ourselves. Think of all the good reasons why you should do it. Use the stairs. Burn calories, not electricity.
Oscarlyn Elder:
Right. Trying to make a rational case, right. Like you’re trying to give the rational reasons why you should do something different.
Wendy Wood:
Exactly! But it had no effect on anyone’s behavior. So, what these people did was, they delayed the closing of the elevator door by 15 seconds. And that was enough to cut elevator trips by a third. So, time, if you have to wait, people aren’t willing to do that.
That’s friction. I’m taking the stairs. And what was so lovely about this experiment is, at the end of a month, when the researchers put the door back to its regular speed, everyone kept taking the stairs, because they’d formed a habit. A month was long enough to have formed a habit, so they weren’t even thinking about the elevator anymore.
As is typical of habits, they weren’t making decisions. They needed to get to another floor. They just took the stairs.
Oscarlyn Elder:
Yeah. And it took that one change to the environment. The rational case hadn’t worked, but the one change …
Wendy Wood:
One small change in friction …
Oscarlyn Elder:
… one small change in the environment helped move the behavior and the direction that folks wanted.
Wendy Wood:
Yeah. There’s many examples of this, great examples of distance as well. So, people are much more likely to go to a gym if it’s close by, if they don’t have to travel far, than if they have to travel further. And it’s not the way we think of going to the gym, right. We think, you’re working out all the time, so you must be very committed and concerned about fitness and you’re impressive. But you know, you’ve set it up in your basement, essentially, it sounds like, and you’ve made it easy. You don’t travel at all.
Oscarlyn Elder:
That’s right. I have made it very easy.
Wendy Wood:
So, you have really set up a context in which it’s very easy to form this habit and not to just sit there on the couch instead of exercising. So, controlling friction in our environments changes existing habits. It also helps us form new habits more effectively.
Oscarlyn Elder:
I’d like to take us in one more additional direction. And that is, are there any commonly held beliefs about habits that you think are wrong and that you would like to disabuse us of. Basically, you know, so, just any myths out there about habits that folks need to be aware of.
Wendy Wood:
The 21-day idea, that if you just do something for 21 days, it can become your habitual, automatic, go-to response. Not true.
Oscarlyn Elder:
Right.
Wendy Wood:
But another one is that there’s something really different between good and bad habits, that we learn them in different ways, or we perform them in different ways. And it’s just not true. The difference between good and bad habits is that our good habits are meeting our current goals, and our bad habits aren’t. That’s all the difference.
I think why people get confused between those two is because the way modern life is structured for most of us, bad habits are really easy to learn, and they have the modern environments that we live in make it really enjoyable to do things that are not really in our best interest in the long run. So, that’s just a standard habit memory system picking up on what you’re doing on a regular basis that’s giving you some enjoyment. It’s the whole structure of our environments that make these behaviors not ones that are really healthy or financially beneficial or contributing to our broader welfare. So, it’s an environmental issue as much as own responses.
Oscarlyn Elder:
Maybe that helps folks decrease the judgment of themselves and perhaps be more kind to themselves around habits specifically. I think that my observation is we at times are our own toughest critics and we think we should have the will power to do X, Y, or Z. And what your research is really sharing with us is that the entire context, the environment matters.
And maybe let’s focus less on will power and more on context and friction, or lack thereof, the elements that you’re speaking to us about in both building better habits and perhaps leaving not so better habits behind us.
Wendy Wood:
That’s a great way to put it. Yes. It is very much a challenge in today’s modern society to live a life that is healthy and happy. But once you understand that you are somewhat in control of that, that you can change the environments to make certain behaviors easier, others more difficult, then it is empowering.
Oscarlyn Elder:
I’m going to go back for one second. The word that I brought up earlier, the automaticity, and I’m thinking specifically about the financial world, financial habits. And as folks are trying to build new habits around perhaps building a savings account, or building a larger investment account, or making more contributions to retirement accounts, or, like, 529 college funding comes to mind—tapping into the power of technology that helps enable those automatic transaction or those automatic money movements, developing a routine around perhaps revisiting the balances to build some of that internal reward around what you’re accomplishing. Using all of those tools seems to be an essential piece of creating the context, creating the environment, to hopefully move folks toward developing those longer-term habits that help them achieve their goals.
Wendy Wood:
You’re absolutely right that we can also use electronic means to help us achieve financial goals in particular. And that doesn’t even require repeated behavior, because we can set up electronic deposits, electronic withdrawals once and then just let it compound over time without any struggle or don’t have to white knuckle it through. So, using the ability that electronic technology gives us, the digital financial world gives us, to save money—it works.
Oscarlyn Elder:
It works. It definitely works. Well, Wendy, I’m sure that our listeners appreciate having a really deeper understanding of habits and some common sense tactics that they can use to try to fulfill their resolutions and actually build those habits to fulfill their resolutions.
Before we go, we have a tradition on this podcast where we ask each guest this question, what’s the one thing you’ve been meaning to do but haven’t done and will commit to doing in the future?
Wendy Wood:
This actually is a discussion that I had with my sons last weekend. They were making fun of me, because I was saying that I wasn’t monitoring my exercise routine anymore to see if I was getting better. Instead, I’m more concerned at my stage in life, am I getting worse? Am I becoming less fit? And so they challenged me to start doing push-ups and keep reporting, because they think I can get stronger if I would just do the right kind of exercise.
Oscarlyn Elder:
Right.
Wendy Wood:
So, get back to me in six months to see if they have embarrassed me into this.
Oscarlyn Elder:
Well, Wendy, I have a virtual trainer who can help you with push-ups. I can help make it easy for you.
Wendy Wood:
And rewarding.
Oscarlyn Elder:
And rewarding. Push-ups are, like, my least favorite thing in the world, but I do them. That’s a great “I’ve been meaning to do that,” focusing on strength and push-ups and not just maintaining, but growing, is kind of at the heart of that.
Wendy, thank you so much for joining us today. it’s been a pleasure to have you. I really appreciate your expertise and I hope you’ll come back and join us again.
Wendy Wood:
Lovely to talk with you, Oscaryn.
Oscarlyn Elder:
And for you listening, thank you for joining me today. If you liked this episode, please be sure to subscribe, rate and review the podcast, and tell friends and family about it. If you have a question for me or suggestion for this podcast, email me at DoThat@Truist.com.
I’ll be back soon for another episode of I’ve Been Meaning To Do That, the podcast that gets you moving toward fulfilling your purpose and achieving your financial goals. Talk to you soon.
