The psychological hack that can help you save more money

The psychological hack that can help you save more moneyThe psychological hack that can help you save more moneyBank of Dad is a weekly column which seeks to answer questions about how tomanage moneywhen you have a family. Want to ask aboutcollege savings accounts,mortgage hacks, or how to be a little bitbetter with money?Submit a question to Bankofdadfatherly.com. Want advice on what stocks are safe bets? Ask your broker. And then tell us. Wed love to know.I suck atsaving money. I dont buy luxurious stuff or make decisions that put my family in jeopardy, but I am bad at, say, not buying coffee out every morning or packing my lunch. I put some money away but should put more away. Were about to have a kid, so I want to get better. ur finances arent bad but they need to improve. My buddy mentioned financial psychology to me. What is it and is there any worth in looking into it? - Chris L., Kissimmee, FLIts one thing to identify areas that you need to work on in yourfinancial life.But actually changing bad habits that may have been there for years? Thats something altogether different.The latter is where financial psychology comes into play. The idea is to help individuals not only create worthwhile goals for managingmoney, but overcome the mental obstacles that tend to trip them up along the way.Its not all that different from someone trying to lose weight. How many people do you know who have found it hard to shed pounds over an extended period of time? Its not that they dont knowwhatto do. In fact, that might be the easiest parte. Its that, for whatever reason, they simply cant achieve the desired result.Some are trying to apply that same thinking to the world ofpersonal finance.The idea has certainly been catching on in recent years. Today, there are a handful of organizations that train advisors on how to recognize the attitudes and behaviors that prevent clients from reaching their goals. Does that mean youll be asked to lay on the couch and talk about you r relationship with your mother the next time you visit a financial planner?Not quite, says Dr. Bradley Klontz, who co-founded theFinancial Psychology Institutein 2002. Were not training financial advisors to be therapists by any stretch of the imagination, says Klontz. What we are doing is equipping them with the theory to understand their clients behaviors.How might this work in real life? Klontz offered me the example of an advisor whos trying to get their client to create a will but is hitting resistance. In that case, the planner might try to steer the conversation in a way that gets at the root issue behind their caginess.Of course, you can use the basic precepts behind financial psychology without necessarily working one-on-one with an advisor whos certified through FPI or another like-minded organization (Kansas State Universitys financial therapy program and the Kinder Institute of Life Planning, for example, meld these two disciplines as well).Heres a strategy that applies to your particular pitfall. When it comes to building up yoursavings, Klontz is a proponent of making your goal as tangible and as personal as possible. So if youre creating anemergency savings accountfor your new family, he suggests actually naming it after your child.Perhaps it becomes Jamies Security Fund or the like something that emotionally links each transaction with your son or daughters welfare. Suddenly pulling money out of the account to eat out or sip venti macchiatos five days a week becomes a whole lot harder. If you really want to eliminate temptations,automating your contributionsdoesnt hurt either.Klontz points to a 2017 double-blind study that he spearheaded as evidence that these emotional attachments really work. One randomly assigned group of participants was given a fairly standard lecture about building up their savings. The other group was told to bring in a nostalgic item and was prompted to talk about how their savings goals related to that item. In oth er words, they explored the reasonswhythey were putting money away.After three weeks, both groups managed to increase their savings level. But the uptick was three times greater for those who took the emotion-based approach.When you develop excitement about what you want, its really easy to pass on these things that have no meaning to you, says Klontz. But you really need to engage that emotional part of your brain.I can tell you from experience that saving andinvestingdoesnt get an easier once theres a new mouth to feed. If ever there was a time to address your financial stumbling blocks, this is it. Congratulations on your exciting news.This article was originally published on Fatherly.