Power Tip #1: Harness the Power of Loss Aversion.
Loss aversion is the principle that we humans are often motivated (or discouraged) by the threat of negative outcomes. If positive motivation isn’t working, try negative motivation. Poor financial choices don’t always have an immediate negative impact, but you can create one. For example, you could bet on your ability to follow through with the necessary steps to reach a financial goal. Losing money — especially to something you dislike or someone you rival, can be powerfully motivating.
Power Tip #2: Bring in the Power of Accountability.
Accountability to ourselves isn’t as motivating as accountability to others — whether it’s a friend, sibling or member of a group you belong to. If you don’t have a personal network, use fitness and financial apps to draw on a more public social network. It’s amazing how much motivation can spring from “competing” with strangers trying to achieve the same goals!
Power Tip #3: Take Willpower Out of the Equation.
We often think willpower (or motivation) is integral to achieving financial goals. If we fail, we must not have enough of it. Some willpower is necessary for taking the first step and gaining momentum toward our goals, but its tendency to fluctuate (much like our emotions), means we can’t count on it to drive us to completion.
With other disciplines, such as healthy eating or exercising, willpower is more of a constant battle until new habits are formed. With finances, it’s easier to eliminate willpower because you can draw on the help of technology — through automation.
Automatic savings and payments aren’t exactly set-it-and-forget-it categories, because you should still check in on your finances – but they only require one dose of willpower to get them going. Try it. You’ll be surprised how much more you can achieve by just having an automated schedule.
Power Tip #4: Focus on the Power of One Goal.
Another reason we often fail to achieve our financial goals is that they’re goals (plural), versus a goal (singular). Pick the biggest area of opportunity, the easiest one to achieve, or the one you feel most excited about — whichever strategy works best for you. Having a singular focus for the year is less stressful and daunting while allowing you to dedicate more of your resources and attention to perfecting it, rather than just barely hitting the mark.
There are different kinds of power, and they play into the success or failure of our financial goals in surprising ways.
Article Source: Jessica Sommerfield for Moneyning.com