My Greatest Learnings from Atomic Habits on My FI Journey

Note: Any links to books are affiliate links which would mean I would receive a small commission if you went on to buy the item at no extra cost to you. I do not link to any books that I haven’t bought and enjoyed myself. I also recommend searching World of Books first to see if you can get any of the books secondhand.

I went down to 4 days a week at work at the beginning of August which has been wonderful for my quality of life and relationship with my kids but has led to a plateau (if not a slightly downwards slide!) in terms of our net worth.

Having a taste of a better life has made me crave more freedom and to see more progress towards our financial goals, but I haven’t been feeling like I’m making the best use of my time and energy.

Many people have recommended James Clear’s Atomic Habits so I read the book thinking about how it could help me with my financial independence goals, and here are my key takeaways.

You achieve an outcome by adopting an identity and create the identity through habits

With reaching financial independence as my desired outcome, the identity that I want to adopt is someone who:

• Plans ahead so that they can spend intentionally, for example having lots of easy meal options to hand so they can avoid takeaways
• Keeps their house clean and decluttered so that they can be relaxed and productive at home, taking care of their things and making extra money by selling unused items
• Invests regularly, learning constantly and putting that into action
• Makes regular mortgage overpayments
• Makes time for their side hustles and uses that time in a smart way so they can direct that extra income towards their goals
• Stays healthy, eating well and keeping moving, for a better quality of life now and in the future

The four laws

The identity I’ve just described can be created through habits, and Clear takes us through the laws that can help us create good habits.  By following these laws you are more likely to take consistent action to build the identity that you want.

“every action you take is a vote for the kind of person you wish to become“

James Clear, Atomic Habits

1: Cue – Make it obvious

The first law is to make the habit obvious, i.e. set clear intentions that specify what you will do, where and when.  

What this means for my own desired habits is that I have set the following intentions:

Plans ahead so that they can spend intentionally,	Each time I go shopping I will buy 2 meals for the freezer that are easy to prepare when I don’t feel like cooking.
Keeps their house clean and decluttered	On Saturday mornings we will clean and declutter before going out to the park
Invests regularly	I will invest £1600 every month after payday into my Interactive Investor account
Makes regular mortgage overpayments	I will make an overpayment to the mortgage every time I save some money that I would have normally spent.
Makes time for their side hustles	I will spend one hour on my own side hustle projects every night between cleaning the kitchen and watching a movie with my partner. I will work in my workspace in the bedroom.
Stays healthy, eating well and keeping moving	Each Sunday I will make a batch of hummus and two salads that keep well to have as lunches during the week.

2. Craving – Make it attractive

The second principle is to make the habit attractive.  

One way to do this is to focus on improving how you feel in the moments leading up to the habit.  When we look at the science of doing things that we enjoy, dopamine is released when you anticipate pleasure, not just when you experience it.  

“The cause of your habits is the prediction that precedes it.” 

James Clear, Atomic Habits

For me this goes some way to explain how people can fall in love with the process of planning for financial freedom.  This pleasure of anticipation can be leveraged to motivate you.  For example, for me, it’s the idea of coming home from the school run and deciding that morning how I am going to spend my time until pick up. This gives me the nudge to keep consistent with habits that will help towards that, even when I don’t feel like it.

Clear offers another trick to boost the attractiveness of a habit: creating a motivation ritual that you do before something you love and that you then associate with feeling good.  For example, you could start by doing a few rounds of deep breathing before going to bed or sitting down to a relaxing evening meal.  The breathing exercises then become associated with the pleasure of the activity that follows and take on their own feelgood meaning.  This means that you can then use the same ritual to get into a positive mindset before doing something slightly less attractive, like listing a few items on Facebook Marketplace.

Linking an action you want to do with an action that you need to do is another way to trick yourself into making a habit more appealing.  So, for example, listening to a podcast you like while cleaning the kitchen.

Finally, the important role of family and friends in shaping your habits is highlighted.  Not only is it more enjoyable when you do something together but also if you are creating certain habits you are likely to influence the other person.  

Out of my partner and me, I am the more naturally frugal one whereas he has always been quite turned off by the idea of trying to save money, particular when it comes to the food we buy.  The other day he came back from the shops and happily pointed out the yellow sticker food he had picked up.  I asked “what happened to make you so thrifty now?” and he said  “you happened to me”.

You can create this positive influence for yourself by joining a culture where your desired behaviour is the normal behaviour.  For me, engaging with the personal finance community on Instagram and Sovereign Quest has made it more fun and motivating to develop and  share my ideas.  It’s also a reminder that for areas where I am really struggling to build good habits – like fitness – having more exposure to people who are keeping fit and healthy would probably motivate me more.  This doesn’t have to be online.  When I go to the park and see other people in my local area running or cycling it inspires me to plan how I do my next round of exercise, so even getting out for a walk and seeing what other people are doing means it’s more likely that I’ll do something more intensive the next time.

The key here is to find a community that you have other things in common with too.  So in the personal finance world I particularly like to interact with people who are also interested in sustainability.  From a fitness perspective if I see other parents being active I feel more inspired than seeing a Yo Pro out on marathon training.

So how will I make my target habits more attractive?:

Plans ahead so that they can spend intentionally,	I will use an attractive weekly food planner to keep track of what needs using up and what I need to buy for the week’s meals. I will shop around to find fakeaway options that I enjoy (e.g. the Crosta and Mollica pizzas at CostCo)
Keeps their house clean and decluttered	I will listen to a podcast while I clean and declutter (like Choose FI or How To Own the Room) or do it as a joint project with my partner.   When we made over the garage we got childcare for the kids and it felt like a date.  We had fun solving the problems and every time we drive into our tidy garage or are prepared because of something we’ve stored there we feel a flush of achievement. In terms of joining a community, the Declutter Hub duo Ingrid and Lesley host a great podcast and have a free Facebook group that you can join (as well as a paid-for membership)
Invests regularly	To make regular investing more attractive I will keep learning about ethical investing by reading books like Investing to Save the Planet, try new technologies (like the Clim8 Invest app) and set goals, like having £100k in my Stocks and Shares ISA.   More communities are being created now to make investing more accessible, particularly to women.  Female Invest is a recent example of these, offering access to a community and educational resources for a monthly or annual fee.  I’m planning to try this out for a month soon so if anyone is interested in me doing a review please comment below.
Makes regular mortgage overpayments	I find taking care of my house has a positive cyclical effect as when I’ve improved the state of my house I feel like I’m going to live there forever and I feel more motivated to pay it off (thinking about the extra time I’m going to live in it for free).    I also find it inspiring to see other people post their snowflake payments on Instagram.  While I prioritise investing over mortgage overpayments, I like the satisfaction of tipping away at the time left on the term with money that we could have frittered away.
Makes time for their side hustles	To make this more attractive I focus on side hustles that I enjoy anyway and would practically do for free (which I lucky as at this stage this is what I am mostly doing!). Making friends with other bloggers who are also at relatively early stages of their own projects has kept me motivated and more aware of what my next step should be.   A few UK creators maintain communities geared towards people wanting to boost their productivity and creativity with the goal of financial freedom (or “joy”) as it would be called in The Humble Penny’s Financial Joy Academy.  One example of how members can keep each other accountable is through their 5am club where people post to say that they are up and what they are working on. There are also lots of free co-working groups to bring together people with similar goals, such as female freelancers.  I recently joined a virtual group for people who were working on environment-focussed projects. At the beginning everybody spoke briefly about what they were working on, then everybody went away for 40 minutes to work and joined each other again at the end to report back on what they had achieved.  Not only did having some time in the diary mean that I had committed to working on that project but I also had the excitement of knowing I would meet new people and find out about different projects.
Stays healthy, eating well and keeping moving	I will continue to walk for the school and nursery runs as it’s an easy way to get extra steps.  I both have to and enjoy taking the kids in, so just by leaving some extra time to do it by foot I can build a lot of extra movement into my day and get more fresh air before work starts.   Instead of tracking how much water I drink I just put a nice bottle of water next to my laptop and end up drinking it all every day.  As I’m talking on Zoom all day it’s nice to drink cool water, not a chore.  I’ve also found healthy snacks that I really enjoy, like frozen grapes which I eat while I watch TV.

3. Response – Make it easy

We often hear that quality is more important than quantity, but Clear talks about how, when it comes to habits, the number of times you have done something is the most powerful factor.  This even trumps how long you’ve had the habit.  Repetition brings change:

“each time you repeat an action, you are activating a particular neural circuit associated with that habit.”

James Clear, Atomic Habits

Through repeating a habit you reinforce a mental groove.  The deeper the groove, the more ingrained the habit becomes.  

The important thing is to establish the habit first and then to improve upon the habit.  So, for example, if I want to establish a regular yoga habit I’m better off aiming to do 5 minutes of simple yoga a day (that I can do with my eyes closed) than one long and advanced session a week.  When this becomes a habit I can work on improving my technique and the length of my sessions.  By planning to just do a few minutes a day I remove the barriers to the practice – I can’t really argue that I don’t have the time.  It’s the same with saving and investing.  It’s hard to argue that you don’t have £10 a month to invest.  If you start there and become comfortable with the feeling of investing regularly then eventually investing larger amounts, if and when you have them, will come more naturally.

One idea that resonated with me was the difference between motion and action.  Motion has its role to play but it’s often the “safe” preparation that doesn’t actually help us achieve our outcomes.

“Motion allows us to feel like we are making progress without running the risk of failure.” 

James Clear, Atomic Habits

As an example, motion would be learning about investing and action is actually investing money.  

Learning is important but there’s often diminishing returns after a certain amount of learning.  Only investing itself will lead to returns.

For me, I’m conscious that motion is researching a blog article and action is writing it and pressing publish.  Thinking about habits in terms of volume made me realise that I just don’t spend enough time writing for my blog.  There’s so much talk about working smart and focusing on outcomes rather than output, but there’s also a certain amount of time you need to put into something to make it a success.

Often the difference between following through with a habit or not will be the result of a “decisive moment”.  This could be “paying yourself first” after payday or deleting a social media app from your phone.  By recognising how critical these moments are you can prioritise making the decisions that will make it easier to do good habits and harder to do bad ones.

Sometimes you can create the decisive moment by making a commitment.  So, for example, sharing a savings goal, sticking to a publishing schedule or taking on a No Spend Month.

Plans ahead so that they can spend intentionally,	The big “decisive moment” that has made it easier for us to save money over the last year has been buying a chest freezer for the garage and organising our garage storage so we can cut down on food waste and buy in bulk. Remembering to make extra food, and eating leftovers first has really cut down on the time and money that we spend preparing food and saved us many times from getting takeaways.
Keeps their house clean and decluttered	To keep on top of cleaning I have identified what my “non-negotiable” tasks are that I need to do each day, which are doing one load of laundry, emptying the dishwasher in the morning and cleaning the kitchen at night.   If I have time for more then I’ll spend a couple of minutes picking up everything that doesn’t belong in that room. In terms of decluttering and reselling, my “decisive moment” is taking a picture of something to list it.  As soon as I’ve done that then I will follow through with the description and arranging pick up.  To make selling easier I create a “selling” box with a measuring tape, scales, envelopes, etc so that getting things out of the door is easier.  A “donation box” in a cupboard also works well. I also keep a list of things that I want to sell on my phone so that whenever I have time it’s quicker to pick the next thing to list.
Invests regularly	My investing platform allows me to invest for free every month into most of the funds I invest in. I set it up to automatically take the money from my bank account and invest into my core funds.   I’ve also made the decision to put my bonus straight into my pension each year so that I don’t pay tax on it and can make up for under-investing in my pension when I was younger.  Another easy way for me to invest is to figure out a certain amount that I need in my current account to cover my bills and likely spending and provide a buffer.  Then anything over that amount is taken out as an additional transfer into my investment account.
Makes regular mortgage overpayments	I also have an automatic monthly mortgage overpayment of £110 as this is the amount I need to overpay in order to pay my house off before I’m 60. Any additional money that comes my way (e.g. through Prolific or saving money on something that’s usually in my budget) will go towards a mortgage overpayment, even if it’s a tiny amount.  I’m set up to make these on my banking app so it takes seconds.
Makes time for their side hustles	To make it easy to work on my side hustles I make my work desk ready for other projects on a Thursday night so when my son is sleeping at the weekend or when I have finished putting him down at night I can sit down on my desk and everything is there. I’ve also started logging the time that I spend blogging on the Toggl app.  This makes it “blogging time” and stops me from getting side tracked by checking my emails or looking at other websites.
Stays healthy, eating well and keeping moving	Thinking about the idea of “quality over quantity” is helping me to see the impact of lots of little choices, like adding something green to my plate or putting leftovers away rather than eating them (when I’m not hungry).   If I don’t have much time to move I’ll tell myself I’ll just do one sun salutation.  Every action is a vote for the person you want to be.

4. Reward – Make it rewarding/satisfying

Enjoying the process and seeing myself make progress are the two factors that make a habit satisfying for me.  

Clear explains that the secret to maximising your odds of success is to choose the right field of competition.  For me this means pursuing side hustles that align with my natural interests, and doing exercise I enjoy and am good at (such as bodyweight yoga exercises rather than weightlifting).  

Time invested in finding the right habits pays dividends, and the key to this is asking yourself the following questions:

• “What feels like fun for me, but is work to others”
• “What makes me lose track of time?”
• “Where do I get greater returns than the average person?”
• “What comes naturally to me?”

Plans ahead so that they can spend intentionally	We put a lot of energy into saving money on food because we enjoy eating and the challenge of finding new recipes that are frugal and delicious is satisfying for us.  Focusing on this as a key area is more motivating than constantly looking for cheaper services would be so we are happy to regularly make improvements in this area.
Keeps their house clean and decluttered	Tying our reselling income to a particular goal or project keeps me excited to add the next item.  For example, we are currently planning to paint the house so any extra income from selling will go towards getting decorating materials.   Family FInance does a “sell to spend” challenge instead of a “no spend one” which means that all discretionary spending is paid for through selling items. For the weeks that we clean the house ourselves we put the money that we would have given a cleaner into our mortgage overpayment fund.
Invests regularly	I track my investments and net worth automatically through the Money Hub app as well as with pen and paper on a wall chart as recommended by Vicky Robin in Your Money Or Your Life.   I like the app because I can split out investments from the rest of my net worth, but there’s something so satisfying about sitting down every month to mark up where I am that month and to think about what I can do to accelerate my progress by the next month.  I can see good months and plateaus much more easily.   Seeing exact figures day by day makes me appreciate each extra pound I can contribute, while seeing my progress as a trend over time makes me think about the bigger things I can do to change the trajectory.
Makes regular mortgage overpayments	I’ve recently created a mortgage overpayment tracker and on it I list my reason for making the overpayment and I enjoy finding little ways to make an overpayment, like earning £5 on Prolific or saving £40 on a haircut.  As my increased equity is tracked to two decimal places so I can see a difference every £50 I contribute.  I had previously lost motivation as I was colouring in a square for every £1000 I was paying off.
Makes time for their side hustles	During the early days of having a blog it can be so disheartening to track page visits and ad revenue.  This is why I’ve started to track the time I spend on blogging as it’s an area where I can control what goes in and at this stage in my life (while my children are small) every hour won back to follow my interests feels like a victory.
Stays healthy, eating well and keeping moving	I want to be the kind of person who takes care of herself so she can turn up for others, is strong, flexible, energetic, healthy and balanced.  To do this I need to establish a streak of good habits and keep building upon them.   I struggle with exercise because I don’t prioritise it and I don’t like being uncomfortable.  My plans to do yoga at lunchtime fail when I’m cold and hungry.  For that reason I need to have everything working in my favour: choosing activities I’m naturally good at and enjoy, celebrating the streaks, avoiding the missed days at all costs and getting back into the routine quickly if I fall.

Work hard on the things that come easy

This book has made me realise two of the big mistakes I’ve been making with my habits up to now.

The first mistake is trying so hard to do things that don’t interest me.  How many times have I resolved to track my water intake only to stop after two days?  Instead, I’m going to focus my time and energy on areas that are my strengths, or “work hard on the things that come easy”.

The second mistake is under-estimating the time that you need to invest into creating a habit (and the sheer number of times you need to repeat it).  I feel that also applies to projects that I want to make successful – I’m too quick to think that they haven’t been a success, even though I haven’t yet put in the time and energy that it takes to be successful.  One quote that resonated with me was:

“Until you work as hard as those you admire, don’t explain away their success as luck.”

James Clear, Atomic Habits

If you’ve got this far, I hope this blow-by-blow account of my plans to improve my habits has helped you to think about your own.  Although this summary has my key takeaways from the book, there is a lot else in there that may resonate more with you, so I really recommend picking up a copy.

I’d love to hear what habits are critical for you to live a happy and fulfilling life and how you manage to keep them going. Please comment below!