Financial Matters

Building Habits: A Four Capitals Guide by SFG – Financial Matters

In his book Atomic Habits*, James Clear transforms the science of habits into a practical framework he calls the Four Laws of Behavior Change. This framework can be used to develop good habits and break bad ones. Each law acts as a lever that influences behavior. The Four Laws are (1) Make it Obvious, (2) Make it Attractive, (3) Make it Easy, and (4) Make it Satisfying. At a time when New Year’s Resolution motivation begins to fade, the need for building sustainable habits is crucial. Technology has made it so that building good financial habits is easier than ever. Here’s how you can apply Clear’s third law, Make it Easy, to your Financial Matters Capital.

Building sound financial habits can be made easy by leveraging automatic programs.

If your goal is to increase your retirement savings, you should opt-in to an employer-sponsored retirement plan, if available. Contributions to employer-sponsored retirement plans are generally automatically deducted through salary deferrals. Beyond automating the contribution process with your employer, investors can also implement Dollar-Cost Averaging so that their cash contributions are invested on a regular and recurring basis. Automation takes the work out of retirement savings and investing. 

If your primary financial goal is to be philanthropic, you may consider establishing a Donor-Advised Fund. A Donor-Advised Fund (DAF) is a brokerage account with charitable beneficiaries. You can donate cash or appreciated securities to the DAF and receive a charitable deduction in the year of your contribution. Tax planning tip: consider bunching your charitable contributions into a given year to maximize your deductions

To “Make it Easy” you may also consider setting up annual contributions. Your charitable impact can grow as the funds within the DAF are invested. Since this is a charitable account, capital gains are not taxed. Donor-Advised Funds offer flexibility in distributions – this can help “Make [the habit of charitable giving] Satisfying”. Grants to public charities can be recommended when you desire to make a gift or as a need arises – offering you the ultimate flexibility in achieving your charitable goals on your own timeline.

Perhaps you have already mastered financial habits that support your goals. Thinking beyond your habits and financial wealth, how can you help your children and grandchildren achieve similar success? Teaching habits to loved ones is just as important as building them yourself.  

Three Jars

Consider implementing the ritual of Three Jars. Each of the three jars represents an activity: spending, saving, and giving. When a child receives their allowance or a small sum of money, work with them to divvy the money into thirds and contribute to each of the three jars. Over time, allocating funds to each spending, saving, and giving will become a habit. Each jar has a lesson to teach. This activity may encourage other conversations and lessons about wealth, giving you further opportunity to teach important lessons to your heirs.

529 Plans

If you would like to implement a habit of your own that supports your child or grandchild’s education, you may consider setting up automatic contributions to a 529 College Savings Plan. Like your automatic retirement plan contributions, these contributions and investments can be automated. Building an education savings fund is a habit that takes time and diligence, but it is also a rewarding gift that you can give to young loved ones.

Building a habit does not have to be an insurmountable event.

By utilizing automation, technology, and the help of the SFG team, building habits can be made easy and satisfying. So – what are your Financial Matters goals for 2021 and how can we achieve them together through habit-building


Read the rest of our Building Habits series: Physical Well-being, Intellectual Engagement, and Psychological Space

*If you are an SFG client and would like a complimentary copy of Atomic Habits, please contact us

For a complete list of our suggested reading, please visit the SFG Library.


Schultz Financial Group Inc. (SFG) is a wealth management firm located in Reno, NV. Our approach to wealth management is different from many other wealth managers, financial advisors, and financial planners. Our team of fee-only fiduciaries strives to help our clients build their wealth across four capitals: Financial Matters, Physical Well-being, Psychological Space, and Intellectual Engagement. We provide family office and wealth management services to clients located in Nevada, California, and other states. If you’d like more information, please check out our website or reach out to us via our contact page.

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