Use Willpower to Your Financial Advantage

Set goals and monitor your spending and saving to strengthen your financial resolve.

Have you ever been on a diet and walked past a plate of fresh chocolate-chip cookies without taking one, only to give in to temptation on the second or third pass? If it seems as if you’ve run out of willpower, it’s because you have.

Willpower is a finite resource. What’s more, we don’t have separate buckets of willpower for different challenges. That means if you deplete your reserves resisting fattening treats, you’ll be more likely to succumb to other temptations—such as running up your credit card bill.

The nature of willpower is neatly summed up in an experiment by Roy Baumeister, a Florida State University psychology professor. Baumeister had groups of students fast, then he cruelly placed them in a room with warm chocolate-chip cookies and raw radishes. Some students were told they could help themselves to the cookies; some could eat only the radishes.

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Those assigned to eat the radishes resisted the cookies, with effort. Some even picked up a cookie to inhale the chocolatey aroma before finally biting into a radish. Afterward, the students were assigned to work on puzzles that they didn’t know were insolvable. Those allowed to eat the cookies persevered on the puzzles more than twice as long as the radish-eaters. A group of hungry students who weren’t given any food also worked on the puzzles longer. Conclusion: The mere struggle to resist the cookies lowered willpower reserves.

Strengthen Your Resolve

It turns out that willpower is greatly influenced by body chemistry—specifically, blood-sugar levels. Low blood sugar makes you more anxious and prone to overreaction. Studies show that low blood sugar contributes to everything from traffic violations to spousal abuse.

So when you struggle with a challenge to your mental resolve, you use up more blood sugar and effectively lessen your self-control. Baumeister has devoted a book to describing how willpower works and how to use it to our advantage. Willpower: Rediscovering the Greatest Human Strength, penned along with New York Times science writer John Tierney (Penguin Books, $28), is worth the price for the chapter on the futility of dieting and better ways to reach a healthy weight.

Self-control starts with setting goals and monitoring your behavior. For your finances, the writers endorse using a service such as, which not only allows you to track your spending but also lets you see if you’re staying within your budgetary goals.

Experiments show that such financial discipline strengthens your willpower, just as exercise strengthens your muscles. Consider a study done by Megan Oaten and Ken Cheng, researchers at Macquarie University, in Sydney, Australia. A group of subjects went through a four-month financial program that included monitoring income, saving and spending. Not only did this group save more than those not in the program, they also exhibited more self-control in other tasks. It turns out that just as our single store of willpower can be sapped by different temptations, building up discipline in one area (say, exercising regularly or keeping a neat office) translates to more discipline generally.

Long-term discipline can yield lifelong rewards. “I was brought up to save money,” says Baumeister. “My parents trained me well.” So well, in fact, that when he and his wife come into extra money, they sometimes have to force themselves to spend 10% to 20% of it on stuff they like but don’t necessarily need.

Baumeister says we should not depend solely on our limited store of willpower to withstand temptation. Rather, we should play offense by removing temptations. In finance, that could mean not checking your portfolio constantly, which can lead to unnecessary and expensive trades. And don’t shop or make important financial decisions when you’re hungry and not well rested.

Robert Frick is a senior editor at Kiplinger’s Personal Finance.

Bob Frick
Senior Editor, Kiplinger's Personal Finance