Rewire Your Brain to Reach Money Goals With This Simple Exercise From a Former J.P. Morgan Retirement Executive Anne Lester, author of 'Your Best Financial Life: Save Smart Now for the Future You Want,' breaks down a straightforward way to save more.
By Amanda Breen Edited by Dan Bova
Key Takeaways
- Thirty-three percent of U.S. adults aged 50 and up say they won't have enough money for retirement.
- Going over budget with impulse buys can be a contributing factor, as up to 80% of purchases aren't planned.
You are not alone if you are struggling to meet your money goals. Nearly 60% of Americans are uncomfortable with their level of emergency savings, according to a recent Bankrate poll, and 33% of U.S. adults aged 50 and up say they won't have enough money for retirement, per AARP research.
Although many Americans cite the rising cost of living and stagnant wages as barriers to their long-term financial health (67%, CNN reported), there's something else that's getting in the way too — and it's in their heads.
Most of us "have a pretty strong preference for things now rather than in the future," Anne Lester, former head of retirement solutions for J.P. Morgan Asset Management and author of Your Best Financial Life: Save Smart Now for the Future You Want, tells BIZ Experiences.
Fortunately, Lester says there is a simple strategy that can help anyone curb expensive impulse shopping — and it might be especially beneficial for recent graduates who are starting their careers and seeing significant paychecks for the first time.
First, people should "spend some time getting curious about how they are wired to respond to money," Lester says. It's important to acknowledge that saving struggles aren't uncommon and to forgive yourself for any past purchases you regret, she adds.
Once you've done that, you can move on to the next part of the process: analyzing your spending to see if there's a pattern or trigger behind it. Research shows that between 40% and 80% of purchases are impulsive, so it helps to understand what motivates your own spontaneous spending.
Finally, think about some ways to slow down those purchases — essentially, how to "give your logical brain a chance to catch up to your emotional brain," Lester says.
Related: These 5 Money Secrets Can Turn Healthy Relationships Toxic, Financial Therapist Warns
"Make lists of things you need and don't buy anything that isn't on your list," Lester suggests. "Don't let yourself go onto websites (or into stores) if you know you find yourself buying things on impulse rather than logically there. Buy things with cash instead of tapping a card. These are all ways to create friction so that your logical brain has a chance to step in."
Additionally, Lester stresses the importance of building up an emergency fund with three to six months' worth of living expenses before maxing out a 401(k). You should also save half of every raise to avoid the "consumption creep" that hinders long-term financial goals, she says.
