America Saves Week: Train Your Brain to Save Money


As for helping your brain help your retirement savings,  Klontz suggests the following:

Enroll for monthly deductions in your company’s 401 (k) plan: This works around the reptilian brain’s aversion to long-term planning. Have the amount deducted automatically; increase semi-annually, annually, or as raises occur.

Name your savings account: Putting a name on an account like “Lake House,” or “Europe” with a picture on it allows you to use your memory to help your brain see the benefits of saving.

Literally see yourself aging: Apps like Merrill Edge Face Retirement actually allow you to see what you will look like as you age and acts as a sobering reminder to your brain that there is someone out there who has to create financial security for you in a few years–you. An experiment conducted by Stanford University found that people who saw age-enhanced images of themselves were more likely to save more for retirement than people who did not.

Visualize your retirement:  Visualizing where you will be, what you will be doing, who you will be doing it with, and what year it will be for five minutes a day also increases savings rates according to Klontz.

 


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