“We are what we repeatedly do. Excellence, then, is not an act, but a habit” -Will Durant
We feel that most of our choices are the product of our own calculated decision-making. (As actuaries, we take special pride in this rational decision-making ability.)
However, studies show that more than 40% of our daily actions are dictated by unconscious, automatic habits. Though each individual habit may seem trivial, the sum of our habits largely shapes the people that we become.
What you eat for breakfast every morning.
Whether you start the day with 20 minutes of social media scrolling or 20 minutes of physical activity.
What news sources you choose to read.
Whether you choose to drink water or soda when you’re thirsty.
Each of these small, automatic habits adds up to shape how we feel, think, and act.
This is the essence of the following quote from William James:
“Could the young but realize how soon they will become mere walking bundles of habits, they would give more heed to their conduct while in the plastic state.”
Clearly, understanding how to create and change these habits would have a tremendous impact on our lives, and that is precisely the focus of Charles Duhigg’s book, The Power of Habit.
In this
Understanding habit formation: The Habit Loop
There are three key steps in any habit:
- Cue – a trigger to tell your brain to initiate the habit
Routine – the set of actions or behaviors (can be physical, mental or emotional)- Reward – reinforcement that tells your brain if this habit is worth remembering for the future
Eventually, the Cue and Reward become intertwined to produce a craving, and these cravings drive habits. There are endless examples of these habit loops (both good and bad) in our daily lives.
You wake up (cue), drink coffee (action), and feel awake and alert (reward).
You finish work, go to the gym, and feel a sense of accomplishment after working out.
You feel stressed about your actuarial exam, reach for a pint of ice cream, and then feel (temporarily) relieved.
“Habits are powerful, but delicate. They can emerge outside our consciousness, or can be deliberately designed. They often occur without our permission, but can be reshaped by fiddling with their parts.”
Rather than let our study habits emerge unconsciously, let’s dig deeper into how you can design them.
Building your Study Habit
The middle part of the habit loop is already defined for you: Routine = study for your actuarial exam.
You need a Cue and Reward to complete the loop.
Cues generally fall into one of the following categories:
- Location
- Time
- Emotional State
- Other people (who else is around)
- Immediately preceding action (e.g. you finish brushing your teeth which cues you to shower)
For actuarial exam studying, Location and Time are your best candidates. Maybe you choose to study at a consistent time of the day, or you choose a dedicated study area to act as your trigger.
The trickier part is the Reward. This will be highly individual, but examples could include:
Feeling of accomplishment/pride- Tangible, immediate rewards (allowing yourself to play video games or eat dessert when you’re done)
- Long-term reward after you finish the exam (salary raise, vacation)
However, you must feel the reward immediately after you finish studying to reinforce the habit loop. That means a salary raise 5 months from now doesn’t cut it for reinforcing your current behavior.
So what’s the best way to utilize the long-term rewards? Use a token economy approach.
In a token economy, the tokens have no intrinsic value, but they can be exchanged for other rewards (e.g. a student earns stickers that can be redeemed for extra recess time). The tokens become associated with the future reward, so they can be used to reinforce
For our purposes, you can check off a box on your checklist to earn one more step toward your post-exam vacation. The vague promise of a vacation in 3 months isn’t enough to reinforce the study habit, but when you physically check a box, you feel some of the reward today. (Bonus points if you have a picture of your vacation destination on your checklist to build up anticipation for the reward)
Choose a cue, select an appropriate reward, and connect them to your study routine to build a habit.
“Anyone can use this basic formula to create habits of her or his own. Want to exercise more? Choose a cue, such as going to the gym as soon as you wake up, and a reward, such as a smoothie after each workout. Then think about that smoothie, or about the endorphin rush you’ll feel. Allow yourself to anticipate the reward. Eventually, that craving will make it easier to push through the gym doors every day.”
My Study Routine
For my last two exams, I studied every morning from 6 – 8 am. The weird thing is that I actually looked forward to studying. It was easy to wake up to my alarm and get to work.
This enthusiasm was certainly not present for earlier exams, but by this point, I had read The Power of Habit and had built the Cue and Reward into my study habit.
My Cue was a time of the day – 6 am.
My Reward was the feeling of achievement and liberation from finishing my hardest task of the day by 8 am.
I loved the freedom of knowing that even if I did nothing else the entire day, it was still a huge success if I got through my study session. Any additional work that day (actuarial work, exercising, reading) was just extra credit.
(As a bonus, the momentum from checking off my hardest task usually propelled me into a productive day at my actuarial job, too.)
For my last exam, I coupled this reward with a token economy approach. I could earn 3 checkmarks for the day: one for sticking to my study schedule, one for finishing my top priority task at work, and one for hitting the gym. Each of these checkmarks could be redeemed for 30 minutes of playing video games (Battlefield 1 at the time, but now it’s Fortnite).
When you understand how habits work, you can fiddle with the gears to produce major behavioral changes.
Make no mistake – studying will still be challenging while you grapple with complex actuarial topics. But you can help yourself look forward to the challenge by introducing the right rewards and building a habit.
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We only covered personal habits in this article, but The Power of Habit goes further to discuss habit change at the organizational level as well as at a societal level.
One of my favorite stories was related to product design. Pepsodent was the first toothpaste to gain massive market share, all because of a few unique ingredients in its formula: citric acid and mint oil.
These ingredients had nothing to do with your oral hygiene, but they created a cool, tingling sensation in your mouth. Consumers could feel the toothpaste working, rather than just knowing the benefits. This introduced the Reward to make Pepsodent a habit-forming product.
I highly recommend The Power of Habit, as it’s one of the single books that has had the biggest impact on my life (both on a personal and professional level).
(Read more about The Power of Habit on Amazon.)
Study Smart, Pass Fast, Live Life
Mike & Roy
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