Skip to main content
Education Center » How to hardwire your brain to save more money

How to hardwire your brain to save more money


The key to giving your retirement savings a boost is to put your mind to it. Literally.

Raising your retirement savings to the next level is one of those goals where good intentions — yes, I’d love to save more — can often be met with frustration. You know you won’t reach your goals with penny pinching or another round of “skip the $4 latte” tips. What you could use help with is how to pull off big enough shifts to make a difference. This is where you need to think differently.

Behavioral finance researchers have discovered that our brains are not hardwired to intuitively make the best money choices. It’s not a question of intelligence, but rather basic human nature. Our emotions can lead us to make decisions that provide in-the-moment satisfaction but work against our long-term best interests.

The good news is that “if we educate ourselves about these pitfalls, we can plan around them and make better decisions,” says Merrill Private Wealth Strategist David Freeman. “You just need a plan in order to not fall victim to your emotions.”

Here are three simple ways to trick yourself into saving more for retirement, starting right now.

1. Create a saving frame of mind

You can be swayed by how information is presented to you. The same data represented as a gain or a loss can affect your choice. For example, you might be more inclined to buy the beef that is labeled as 90% lean rather than one labeled 10% fat.

You can harness this framing effect by thinking ahead to how you will handle future financial windfalls. The idea is to decide today how much of your next bonus or raise you intend to save, rather than spend.

If you are super-motivated, for instance, you might earmark 90% of new income for retirement. “That way, when you get the $5,000 raise, you will hear it as having $500 you can spend, not $5,000,” Freeman says. The result? $4,500 in the bank.

How to start right now:

Automating your savings will help you stay committed. If your workplace offers to automatically boost your contribution rate — one percentage point a year is typical — that’s a great tool. For IRAs and savings accounts, it’s easy to set up automated deposits from a checking account. Designate an annual event — your birthday or an anniversary — to review your progress and push yourself to save more.

2. Spend a little, too

A key to staying committed to a long-term goal is to give yourself room to breathe. “You hamper your ability to make good decisions if you don’t give yourself flexibility,” says Freeman.

Just like a cheat day can help a dieter stay committed to the long-term goal of losing weight, so too can giving yourself permission to spend money. Allowing yourself to take $500 from a $5,000 bonus to use for whatever floats your boat can play a sneaky-smart role in helping you persist with retirement saving.

How to start right now:

Just as you automatically contribute to a retirement account, move the money you’ve earmarked for spending on yourself into a special account. This way, you can track your progress toward larger celebratory purchases and stay energized. Keeping your eye on the prize also helps remove the temptation of impulse spending.

3. Get cozy with an older you

Researchers have found that you treat your older self as a stranger, which makes it difficult to take steps today that will help your future self. In one experiment, young adults who were shown digitally altered photos that “aged” their faces were more likely to say they would use a $100 monthly raise toward saving for retirement, compared with a control group who weren’t put in the same time machine. You can try the same nudge with the AgingBooth app. Writing a letter to your future self about what you envision your life to be at that juncture can also help spur you on.

How to start right now:

Ponder how long you think you will live by giving the Actuaries Longevity Illustrator a spin ( This tool from the American Academy of Actuaries and the Society of Actuaries will give you an eye-opening personalized estimate of your odds of living to 85, 95 and beyond. (Hint: The odds are higher than you think.) That might be an effective nudge to help you push yourself to save more today.

If running the numbers on your estimated longevity turns up a potentially long life, that means saving even more money today, and that’s a tall order of delayed gratification. By periodically reminding yourself that hitting your 10th decade is not an outlier event, you may find all the motivation you need to keep saving as an act of kindness for your future self.

Learn more and take action

  • Good saving habits start with good budgeting habits. This worksheet can help you develop a budget you can stick to.
  • Want to kick your 401(k) up a notch? If your 401(k) plan is with Merrill, you can increase your contributions anytime online at or through our convenient Benefits OnLine® app. Even better: Consider enrolling in your 401(k) plan’s automatic increase program, if available. It’s a painless way to gradually increase your contributions on a regular basis!
  • Saving more can be simpler than you think. Here are 8 simple ways to save money.


Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.