The first model is from Stanford Professor BJ Fogg.
BJ Fogg's Model of Behavior Design: http://www.behaviormodel.org/
B=MAT: Behavior = Motivation*Ability*Trigger
Applications/Examples:
Diet: If you are motivated to lose weight or become healthy
Pre-behavior change:
Food in the house is mixed between healthy (unprocessed foods, fruits, vegetables, whole foods) and unhealthy (deserts, high sugar foods, highly processed foods, quick serve foods)
Ability: It is easier to eat processed foods because they are quick and easy
Motivation: Because of the immediate reward associated with processed food (it is processed to affect chemical pathways of reward to increase your likelihood to buy it again...it makes sense from the manufacturers perspective) you are not usually motivated enough to eat healthy so unless your motivation is high, you will go with the easier option
Trigger: When you open the fridge/cupboard/drawers what do you see. This trigger can influence what you decide to do.
How to Create Changes to your environment to shift the Behavior curve in your direction
Motivation: This is the most important part of the equation in that when you have a high level of motivation (motivation is very cyclical: think new years resolutions) you can perform more difficult tasks. When your motivation is high, set up your environment so that it is easier (Ability) to follow your desired behavior later on. (Get rid of all processed foods, junk foods, desserts and unhealthy foods. Create a shopping plan and meal prep plan that is easy to follow that includes healthy foods that you know you will eat. The more you plan, the more you increase your ability for times when motivation wanes.
By establishing a plan and system, you increase your ability to perform the desired task and by removing the unhealthy distractions from your environment, you have done the reverse and made it harder to do the undesired behavior.
The key is to design your behavior and environment while your Motivation is high so that when motivation wains you have lowered the ability threshold to something that is manageable even with low motivation.
This principle applies to all aspects of your life where you desire to change your behaviors and habits
Finance: Creating a system using BJ Fogg's Behavior Model (Thanks to Ramit Sethi for information on establishing monetary systems check out http://iwillteachyoutoberich.com/ for more information)
High Motivation:
Look at your finances when your motivation is high and create a budget to include savings, debt reduction, and spending analysis.
Set up automatic payments for credit cards and bills
Set up automatic transfers to savings accounts that are separate from your checking account. These accounts should not be visible when you look at your checking account or your credit card accounts...ideally it should be easy for you to put money into them, but hard for you to take money out (Ability: this system makes saving easy, automatic and requiring no motivation it just happens. On the other hand it makes spending that money harder to do therefore requiring more Motivation to access it.)
The same process can be applied to creating your investing system.
When your Motivation is high, set up your investment accounts and set up automatic transfer then the rest of your investing only requires checkups on the system every so often to make sure that the system is operating as it should.
Feel free to leave comments with your thoughts about this model, but also about your encounters with changing behaviors and habits.