Bucking up your financial willpower

New psychological research finally acknowledges that willpower is a limited resource. As Stanford psychologist BJ Fogg says, “In the long term, willpower alone won’t work for difficult behaviors. You need to take a different approach, such as changing your environment, removing triggers and taking baby steps.”

What can we do? Some tips:

Start by changing your defaults. Researchers found that when 401(k) accounts went from “opt-in,” which requires employees to fill out enrollment paperwork, to automatically enrolling employees and requiring them to “opt-out” if they didn’t want to participate, contribution rates soared from less than 40 percent to nearly 100 percent. The same approach works for people who try over and over to save a few hundred dollars each month, but things “just keep coming up.” These people blame themselves for their lack of willpower, but never create systems to automate savings.

Use your behavior to change your attitude. Many people assume that our attitudes influence behavior, telling ourselves that “I’m frugal, so I don’t buy expensive jeans.” But behavioral change works in reverse, too. Your behaviors can actually affect your attitudes and emotions. Identify one thing you want to do more of (say, read a fiction book). Now, instead of waiting for some day when you’ll actually do it, add a calendar reminder every week for a month.

Stop trying to save on everything. Every morning we wake up facing infinite financial possibilities. Should we pay down debt? Buy that latte? Eat out with friends? Overwhelmed with choices, we do the same thing we always do: nothing. Instead of trying to save a little bit on everything, focus on your two biggest discretionary expenses. Over the next six months, cut each down by 25 to 33 percent.