Achieving financial goals of any size takes work (not to mention consistency, healthy financial habits, and determination). It’s never easy. Whether you’re trying to grow your savings or make an investment, distractions and temptations are everywhere.
Fortunately, psychologists have been studying human behavior for quite a while and they’re learned a bit about what make us tick. Here are mind hacks from them that may help you reach your financial goals.
Keep your goals private
When you tell people your goals like “I’ll go to the gym regularly” or “I will travel this year,” you might be undermining your chances of achieving them.
The idea behind telling other people your goals is so that they will hold you accountable. However, psychologists in an NYU 2009 study, have found that telling people your goals creates a “social reality,” which is a false sense of accomplishment. This actually makes you less likely to work towards achieving them.
So, if you’re thinking of telling people “I will save up for an emergency fund” or “I will put 10% of my monthly income in investments regularly,” you might want to keep it to yourself instead.
Write down your goals
Neuroscientists have found that people remember things better when they physically write them down. So, putting down something like “Be debt-free by the end of next year” helps it stay in your head, so you don’t forget your goal.
For best effect, post it somewhere you’ll see it regularly, like your bedroom wall or bathroom mirror.
Another advantage to writing your goal down is you can refer to it when you need motivation. This is especially useful when you find yourself asking “Why am I cutting back on things I enjoy?” or “Why don’t I just enjoy my money now instead of later?”
Make saving/investing your default
Possibly the most difficult thing about trying to start a new habit is integrating it in your current lifestyle. So, instead of saving or investing after you’ve spent on everything else, put money in that savings or investment account first every pay day.
Behavioral scientists working for the UK government found that people are 23% more likely to do what they perceive as the default option. If your mindset is that you already save/invest, then you’re more likely to actually do so.
These are just a few mind hacks that might help you achieve your financial goals. While they can help, the most important thing is to have good financial basics, including the proper knowledge.