The Secret to Finally Meeting Your Financial Goals
This year work smarter, not harder on yourself and your finances. Here are some interesting behavioral strategies to try, including temptation bundling.

We’ve all been there. You’re at the door of the restaurant, telling yourself it’s salad time, picturing yourself tightening that belt another notch. But did they have to put the double-cheeseburger on special today, with a huge poster in the lobby? A half-hour later, you’re looking over an empty burger basket and wondering what happened.
You either underestimated or overestimated yourself yet again, and healthy habits are hard to keep.
How many times have we planned to budget or contribute to a 401(k) or keep a certain investment in place, only to find ourselves backpedaling? We spend money meant for saving, we lack the discipline to keep it in place, or we just don’t sit down to write out a budget.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
This is particularly true shortly after the new year. Mid-February, for example, is prime time for breaking New Year’s resolutions, whether it’s too many hamburgers, dust-gathering gym memberships or forgotten financial goals.
“Work smarter, not harder” is one of those dad phrases most of us heard yelled over a lawnmower engine. How can we work smarter, not harder, on ourselves? How can we take self-knowledge to our financial life and approach our struggles with something other than tighter resolve and guilt?
Temptation Bundling
Psychologist and professor Katherine Milkman puts forward what she calls temptation bundling, which put simply is the idea that you can get yourself to do something by pairing it with a unique indulgence.
In financial terms, the less-than-fun activity might be something like reviewing your portfolio. You know you need to meet with your adviser to make sure everything is optimized, and you’ve been meaning to move your old 401(k) into an IRA. But then there’s laundry to fold or a game on TV, and your financial health gets put off again.
Now, you can go for the moral hangover of failing once again, or you can work smarter with temptation bundling. Next time you try to sit down and do a healthy activity like reviewing your budget, anticipate the wave of boredom and restlessness that will come over you. Arm yourself with your favorite dessert or a promise to take yourself to dinner once the reviewing is done.
Make sure the pairing is special — you only have this dessert when you’re doing budget duty or you only go to this restaurant after. This will create a stronger neurological bond, and your brain will more readily associate that chocolate hurricane sundae with this spreadsheet review.
The more instant the planned, or “bundled,” indulgence pays off, the better. You have to make an appointment with your adviser to review your investments for an hour, and while you’re there you’ll be eating an entire bag of Gummi Bears (and won’t share any!). You’re taking yourself to a guilty-pleasure romantic comedy as soon as you update your net worth on your client dashboard. It’s an appointment you intend to keep — with popcorn!
Know yourself. Knowing that you don’t like financial homework but that you do like going to the movies allows you to short circuit your own resistance to financial health.
Fresh Start
In a recent study, researchers checked when the Google term “diet” appeared the most during the year. They found, again and again, that searches for the term followed “new epochs,” signifying a new phase of life or time: the start of a new week or a new year, holidays or birthdays.
As I write this, we are starting a new epoch for sure — the 2020s — and now is the time to make changes that stick.
We stop, we step back, and we evaluate in at least some small way our existential situation and the kind of person we want to be.
Work smarter, not harder. This can be a time to set out those aspirational values of who you want to be. You probably won’t promise to put that extra percent into your 401(k) on a random Tuesday — you’re going to make that vow on the day of your 40th birthday. You’ll spend some time reflecting after the cake and ice cream and realize retirement isn’t an abstraction anymore.
Know yourself. Know where your personal temporal landmarks are. Who will you be in the 2020s? How will you work smarter to set some new goals?
Choice Overload
Another behavioral strategy is at work every time you go into a bookstore and look at the magazine rack. Even in the age of digital media and iPhones, there are still hundreds of brightly colored paper publications grabbing at your attention as you walk in the door.
If it were one long rack of 400 different magazines, you’d be overwhelmed to the point of paralysis, what author Sheena Iyengar calls choice overload. This is why the magazines are broken down into news, special interest, women’s issues, hobbies and so on. Your brain can rest for a moment and make a more informed choice.
Choice overload can affect your financial health as well. If your goals are obnoxiously vague — “pick more reliable investments” — you’re bound to throw up your hands quickly. Instead, try this: “When I get my bonus this month, I will invest in three new holdings that I have chosen and researched ahead of time. They will reflect my values of social action, education and ecological sustainability.”
Know yourself. Know that you can get around the paralysis of options by narrowing the field, following your values and working on those decisions before the moment you’re called upon to make them.
An Example
Of course, behavioral issues like these never travel alone. Chances are, you will be tempted by one less-than-great decision while reacting in unfounded fear bias to the markets and not noticing the recency bias that’s driving your choices. You never get to face one at a time.
What would it look like to put these three behavioral issues to work for you? You know your February bonus is coming up. Last year, well... last year you got a shiny red car and put half down on a vacation.
So you sit down with yourself and decide to work smarter. Two weeks before that sweet check hits your account, you lay out a limited number of possibilities to choose from (choice selection): refinance your house, contribute to a Disney World July 2020 fund, or max out your IRA contributions for the year. While you make out your list, you temptation bundle and drink a glass of your favorite wine.
You leave a small margin after your work is done to buy season tickets for your favorite team. You know that you’ll buy them anyway when autumn rolls around. Why not temptation bundle by doing it now and get that early bird discount?
As soon as your bonus comes in, your birthday hits and it’s a significant one — 30, 40, 50. This is a time to “fresh start” with better money choices than you made on the last landmark birthday. You promise yourself that your last present is to open that bonus check from work — and you’ll be armed with a plan before you do.
Smarter, Not Harder
You can’t change the wind, but you can sail.
Your behavioral biases around finance are going to be there. You can anticipate them — maybe even lessen their influence when you’re aware of them — but entirely ridding yourself of every behavioral mishap is near impossible.
Put these realities to work for you. Use mental accounting to label bank accounts for positive things (vacation, retirement, etc.). Use your fear bias to watchfully and carefully make investments. Use your familiarity bias to plan for investments in companies and causes you believe in.
New Year’s resolutions are always a good idea, but there’s more than one way to get there. Taking the “smart route” will be less work in the end and increase your odds of making it to your destination with time to spare.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Erin Wood has over two decades of experience humanizing financial planning. As SVP of Advanced Planning at AssetMark, Erin leads innovation for new wealth solutions, secures strategic industry relationships and oversees a team of specialists who work directly with advisers and their high-net-worth clients. Erin focuses on delivering tailored strategies for estate planning, tax efficiency, retirement planning and multigenerational wealth transfer to help financial advisers keep up with evolving client demands.
-
AI Is Missing the Wisdom of Older Adults: What It Means for You
AI will increasingly affect your healthcare and finances, but young workers are primarily designing the systems and getting most of the jobs.
-
The Three C's to Financial Success: A Financial Planner's Guide to Build Wealth
Consistency, commitment and confidence in your chosen strategy are more critical to your financial success than finding the 'perfect' financial plan.
-
The Three C's to Financial Success: A Financial Planner's Guide to Build Wealth
Consistency, commitment and confidence in your chosen strategy are more critical to your financial success than finding the 'perfect' financial plan.
-
A Financial Adviser's Guide to Solving Your Retirement Puzzle: Five Key Pieces
If retirement's a puzzle you're struggling with, try answering these five questions. The answers will guide you toward a solution.
-
You're Close to Retirement and Cashed Out: How Do You Get Back In?
If you've been scared into an all-cash position, it's wise to consider reinvesting your money in the markets. Here's how a financial planner recommends you can get back in the saddle.
-
A Financial Expert's Tips for Lending Money to Family and Friends
What starts as a lifeline can turn into a minefield if the borrower ghosts the lender. Following these three steps can help you avoid family feuds over funds.
-
What the HECM? Combine It With a QLAC and See What Happens
Combining a reverse mortgage known as a HECM with a QLAC (qualifying longevity annuity contract) can provide longevity protection, tax savings and liquidity for unplanned expenses.
-
I'm an Insurance Expert: Yes, You Need Life Insurance Even if the Kids Are Grown and the House Is Paid Off
Life insurance isn't about you. It's about providing for loved ones and covering expenses after you're gone. Here are five key reasons to have it.
-
My Professional Advice: When It Comes to Money, You Do You
This is how embracing the 'letting others be' and 'learning to surrender' mindsets can improve your relationship with money.
-
Direct Indexing Expert Explains How It Can Be a Smarter Way to Invest
Direct indexing provides a more efficient approach to investing that can boost after-tax returns, but is it right for you?