Why You Should Start Habit Stacking To Reach Your Financial Goals

A woman calculates expenses on her calculator.
BartekSzewczyk / iStock.com

Making new money habits is hard. If you’re like most people, it can be difficult to retrain your brain to do something it’s not used to.

See: How To Build Your Savings From Scratch

For example, think about how many New Year’s resolutions you’ve likely made with the best of intentions, only to give up on them after a few weeks. You might think you’ve tried everything to improve your finances, but there’s probably one approach you haven’t tried yet — habit stacking.

What Is Habit Stacking and Why Is It Useful?

If you’re not familiar with habit stacking, it’s a method drawn from the Tiny Habits program created by Stanford behavior scientist BJ Fogg. Specifically coined “habit stacking” by author James Clear, the term refers to pairing a new habit with an existing one.

So, how do you stack your habits?

Instead of creating a new money habit and setting a designated time to put it into action, you would connect it to an existing habit. For example, you might attach a new habit of tracking your spending with walking your dog at night. Using this approach, you would take your dog out for their last walk of the evening, then sit down and track your spending for the day — i.e., log in to the personal finance app you use to track spending or gather your receipts and enter the expenses into your budgeting spreadsheet.

Habit stacking is useful because it allows you to capitalize on your commitment to existing habits. Since your brain is already trained to complete these tasks, you’re more likely to stick to the new habits you’re attaching to them.

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Start small by attaching one new habit to one existing habit. After making the new habit a regular thing, you can add more new habits to the sequence. This will allow you to make the major strides needed to achieve your financial goals.

How To Use Habit Stacking To Reach Your Financial Goals

Now that you know what habit stacking is, you’re eager to put it into practice. Use this guide to get started.

1. Inventory Your Habits

Your day is filled with habits. These practices are so ingrained in your brain, you don’t even think twice about them.

Habits are what make your life uniquely yours. Many of these behaviors are part of your daily routine — some more than once — while others are put into action only a few times per week.

The important thing about these habits is you’re so used to them, you don’t even think twice about them. Here are a few examples of habits that might sound familiar:

  • Unload the dishwasher
  • Take a shower
  • Go grocery shopping on Monday nights
  • Meet friends for dinner on Friday nights

Now, make a list of your top habits, as this will serve as your starting point for building new financial-based habits. This is the first step toward successfully habit stacking.

2. Set New Financial Habits

A new financial habit might seem small, but it’s part of something much bigger. Every new habit you create — and successfully build into your routine — gets you one step closer to achieving your financial goals.

Make Your Money Work for You

Therefore, there’s really no such thing as a habit that’s too small to invest in. Take the time to figure out what your most important financial goals are — such as paying off debt or saving for a down payment on a home — and use this to create habits that support them.

No two people have the exact same financial goals or habits. However, these money moves are common habits that you might want to adopt:

  • Track your spending
  • Pay with cash
  • Improve your financial literacy
  • Avoid impulse buys

3. Create Mindful Pairings

After listing your current habits and new financial habits you would like to acquire, it’s time to start stacking. When doing this, it’s important to be cognizant of the habits you’re pairing together.

Set yourself up for success by thoughtfully habit stacking. For example, if you’re groggy first thing in the morning and don’t retain knowledge well until you’ve had a cup of coffee, don’t pair a new habit of improving your financial literacy with an existing habit you complete as soon as you wake up — such as making the bed.

For example, you might pair the habits listed above as follows:

  • Unload the dishwasher | Track your spending
  • Take a shower | Improve your financial literacy
  • Go grocery shopping on Monday nights | Avoid impulse buys
  • Meet friends for dinner on Friday nights | Pay with cash

Sticking to new habits isn’t easy, so stacking them with existing habits in a manner that makes sense for you is crucial.

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4. Stick With It

Habit stacking is designed to make developing new habits easier. However, this doesn’t mean it’s actually going to be easy to make new financial habits part of your standard routine.

It’s almost inevitable there will be times you fail at completing your new financial habit. This probably won’t feel great, but realize this is just a minor setback.

Instead of giving up on your new habit because you temporarily fell out of sync, simply recommit to this habit and start over. Do this as many times as you need to turn your new habit into an old one.


Making new financial habits stick is a process. As long as you’re dedicated to habit stacking, you should reach the goals you’re striving toward.

Now that you know what habit stacking is and how to do it, you’re ready to put it into practice. If you’ve tried to develop new financial habits in the past and failed, you might be a bit weary of this technique.

However, if you’re willing to give it a fair try, you’ll likely be pleasantly surprised by the results. This proven method has worked for many people, so there’s a good chance you’ll find success with it as well.

Remember, habit stacking is an ongoing process. After successfully turning one new financial habit into standard practice, you’ll be ready to chain another one to it and gradually continue this pattern.

Make Your Money Work for You

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