How to Train Your Brain to Behave Financially
Use Your Willpower
You probably think of willpower as a renewable resource. Yet, "psychologists have found that there's this thing called eco-depletion, where you have that 'umph' for controlling yourself, but it's like a muscle—you can wear it out and run out of willpower," says Princeton University professor Sam Wang, co-author of Welcome to Your Brain.
That means if you're trying to stop shopping or smoking, you shouldn't try other changes that also require willpower. You'll have the most success if you concentrate your efforts: Stop smoking, curb your shopping, then work on a diet. The order is up to you.
I've said this countless times: If you make automatic contributions to your 401(k) or other savings accounts, the money is out of your hands, out of your wallet, and you're less likely to spend it before you can save it.
But there's another reason: Your brain may not do well planning for the future. It may be programmed to want something now, not later. "You can basically trick people's brains into doing the right thing by setting up situations where they don't quite feel the bite of what they're being asked to do," Wang says.
Put all your savings on autopilot, and you won't likely notice the missing cash.