This past week I began working with 3 new clients. One of the critical conversations I have with new clients is about the stages of change. This is a well-documented process used by dietitions, addictions counseling and coaches alike. Understanding the process increases the likelihood of achieving lasting change.
So many people come to me frustrated and discouraged about their experience managing money. This will help.
Stage 1: Precontemplation.
This is the stage when a habit is actually not working well, but the individual is oblivious. You know how sometimes you can see a friend or family member who is chronically overspending or wasting money (at least in your eyes), but if you try to say something about it, it’s not well received? She either doesn’t ‘hear’ your comments, or she denies there’s any problem, or she has 1,000 reasons why she cannot change. During the precontemplation stage, change is not likely to occur of course. (Note to family members – as tempting as it may be to say stuff to the person you care about, I urge caution. Sometimes commenting, or judging, or shaming drives the person deeper into this stage, rather than encouraging the person to try a new behaviour.)
Stage 2: Contemplation
During the contemplation stage, the individual acknowledges something needs to change for their own well-being. Usually this ‘awakening’ is due to specific, personal and relevant feedback. It could be exceeding a debt threshold. It could be a desire to buy a home. It could be one too many birthdays and still feeling not ‘grown up’ about money. During this stage, the person may slip back to stage 1, or they may move to the next stage.
Stage 3: Determination
The individual decides to take action. This is a critical stage. Deciding to take action is one thing. Taking action likely to lead to long term success is another thing. The most common example I see are clients who are freaked out by their debt. They are panic stricken, and all they can think about is how to get rid of this horror as fast as possible. Part of my role is to help the person get grounded, and make thoughtful action plans based on a more holistic picture of their finances. Shameless self-promotion: having an objective third party involved at this stage is likely to create a more balanced, not panic-driven, action plan.
Stage 4: Action
Enuf said. Well, maybe not: This is simply proceeding on, ideally, a series of small, incremental actions as ‘determined’ upon in stage 3. The action plan needs to be sane and sustainable.
Stage 5: DeRail
Yup, this is almost always part of the process. Again, many of my clients are discouraged because they’ve tried in the past, but feel they are right back where they started. The fact is, most long-term changes require a series of repeated attempts before things finally seem to stick. The key during this phase is to have some help getting back on track again, and minimizing the length and intensity of this stage.
Stage 6: Lasting Change
This is the point at which there is a substantial shift in financial behaviour. In my own life, one lasting change I’ve experienced is impulse shopping. I simply don’t do it any more, full stop. Another example is saving – I always have savings account getting pooled up for holidays, christmas, taxes etc. I’ll describe these in more detail in a future post. Suffice it to say that these were big accomplishments for me that, as you can imagine, resulted in a much more stable and proactive relationship with my money.
Reader feedback wanted: have you experienced long lasting change in some area? Would you say the above is a fair analysis of how you experienced change? Or have you experienced the frustration of seeing from the outside a harmful money habit, that the person you care about just didn’t see for himself or herself?