One of the many keys to effectively changing your life is prioritization and then creating habitual behaviors. Habits can make or break us – building great habits should be a top priority. We all have limited time, money, and energy. I’m going to touch on all these topics from time to time, and today we will explore how to create those financial habits that will have the most significant impact on your life – right now.

Try this process to focus on your financial success habits:

• Where are you feeling the most pain in your finances? What keeps you up at night? Is it the lack of savings? A non-existent emergency fund? Too little income to pay your bills each month? A bleak retirement future? Focus and pick one. Then address that pain first – and with focus. Addressing the most stressful financial challenge in your life can be an effective place to start.

2. Which habit would have the most significant impact on your financial pain today? Knowing that you need to work on your savings doesn’t necessarily highlight what you need to do to fix the problem. That requires a habit to form. Consider the impact any new habit would have on your situation.

• Make a list of all the potential habits you could build related to your focused financial pain.
• Prioritize your list based on the likely outcome from incorporating that habit into your life – and your probability of actually following through on forming the habit. Follow the Pareto principle and eliminate the bottom 80%. 80% of the result will occur with 20% of the effort. Get that momentum first!
• Focus on the 20% that remains. Visualize the impact each of the remaining possibilities will have one month, six months, 12 months, and five years. How will the habit impact your life 25 years from now?
• Choose the one habit to develop that makes the most sense after carefully considering the future. If you’re torn between 2 or more habits, consider which would be the easiest to implement. Never underestimate the power of momentum. You can swing back around and pick up the other habits shortly.

3. Seek to be average first. Set your goals aggressively and look for a stretch target – but bring all the parts of your finances up to an average level before attempting to be a high achiever. Building that foundation will ensure your future success, whether it takes weeks, months, or years. The worst aspects of your financial life are the ones causing your most significant financial discomfort.

• If I were starting this plan again, I would first eliminate consumer debt, have an emergency fund, save at least 10% of my income, have adequate insurance, and be consistently saving for retirement before worrying about the purchase of a vacation home, buying a business, buying a Mercedes or the installation of a swimming pool.
• If your new habit doesn’t address your number one pain point from a fundamental personal finance perspective, adjust that habit!
• In general – evaluate your finances on a 1 to 10 scale. Define what a one is, a five is, and a ten is. Focus on bringing each part of your finances up to a “5” before attempting anything on a grander scale.

4. Do you have what you need to implement the habit? If not, can you get what you need or start small enough that the habit works for you where you are right now – with the resources you DO have? If you’re 75lbs overweight and spent every evening on the couch playing Xbox and eating Cheetos, you’d have to start small if your desired habit was to run 10 miles daily. You’d need running shoes, too…

• Some financial habits might require you to gain significant knowledge or have a starting point beyond your reach. There are online resources that can help build that knowledge base, coaches that can assist you, and books that can guide you.
• Determine if the new habit is possible with your available resources and expertise. Another goal might be more appropriate for where you are right now.

The key is just to get started. Time is a limiting factor for everyone, and there are only so many hours that can be applied to building and performing a new financial habit. Ensure you’re spending your time wisely and effectively.

Remember, often, the most important habits are the least appealing. Focus on positive habits first to build momentum and best enhance your finances. James Clear’s Atomic Habits is the definitive current book on building habits right. The approach in the book is a well-established framework for habit-building, self-improvement, and proven results.