Building wealth is about more than just hitting a number. It’s also about cultivating the habits of mind that make saving second nature—or at least a whole lot less painful. But as anyone who’s ever tried to get in shape can tell you, changing behavior isn’t easy. Sometimes you need a clever “cheat” to help you on your way. So here are 9 mental tricks that can speed you on the path to financial security.
Adapted from “101 Ways to Build Wealth,” by Daniel Bortz, Kara Brandeisky, Paul J. Lim, and Taylor Tepper, which originally appeared in the May 2015 issue of MONEY magazine.
When you hear the word “saving,” do you imagine the retirement you hope to enjoy? Or does your brain go right to the 401(k) forms you need to fill out? For those who tend to focus on the big picture, a specific target (say, to reach a balance of $50,000 by a certain date) can motivate saving, says Gülden Ülkümen, a business professor at the University of Southern California. If you’re thinking mainly of the nuts and bolts, though, picking a dollar figure may make the task feel harder. Instead, concentrate on putting away as much as you can.
“You don’t want goals that are so aggressive that you’ll lose steam,” says Lisa Ordóñez of the University of Arizona, who has studied the effects of goals on behavior.
The easiest dollars to set aside are the ones you aren’t used to spending. So put a portion of bonuses and tax refunds into savings. Make raises an occasion to up your 401(k) contribution. About 44% of plans have some kind of auto-escalation feature, which allows your savings rate to rise with your income, but you may have to specifically sign up for this option.
You save more when you feel powerful, even when it’s for a quirky reason. A recent study in the Journal of Consumer Research found that people who had just answered questions while sitting in a tall chair were more likely to save money than those on a low ottoman. A practical takeaway: Consider reserving your major financial chores for “up” days when you are feeling in command, says study coauthor Anne-Kathrin Klesse.
Credit card statements must show how much you’d pay if you settle in three years, if paying the minimum takes longer. That’s good if it speeds you up. But business professors Neal Roese and Hal Hershfield have found that people who see a three-year example may pay back more slowly than otherwise, perhaps because they (incorrectly) take the example as a suggestion. Faster is better: Pay a $5,000 credit card debt (at 15%APR) in one year instead of three, and you’ll save $824.
If heavy balances are weighing you down, start paying off the smallest balance first, suggests Beverly Harzog, author of The Debt Escape Plan. The math says to go after the card with the highest interest. But unless there’s a big difference in two cards’ rates, it’s often more helpful to get positive mental feedback from clearing a debt so that you sustain your repayment plan.
At the end of the day, the only person who can persuade you to be a disciplined saver is you. Now there’s a way to communicate with your future self. Go to FutureMe.org and send yourself an email, which you can schedule for delivery at a later date. For instance, if you know that a bonus is coming at the end of the year, send yourself a reminder to sock the money away for retirement. You’ll thank yourself later.
Maybe you have several recurring bills that are on the verge of going away, like car loans or student debt payments. When that happens, don’t free up the cash. Instead, set aside the same amount of money—you’ve shown you can afford it—to bolster your nest egg. For example, keep saving $450 a month (the typical nut on a five-year auto loan for $25,000) after the SUV is paid off, and you’ll drive off with more than $140,000 in 15 years, assuming 7% annual returns.
Around age 50, you enter peak saving years. Imagine your goal now not as a lump sum—which can be abstract—but as a monthly retirement income. A study in the Journal of Public Economics found that savers who were shown income projections socked away more. To get a ballpark sense of where you are, use T. Rowe Price’s free online retirement-income planner.