Latest Posts
Home > Debt Articles > Behavioral Economics > Five Steps to Pocket Change: How to Persist When Your Finances Get the Best of You

Five Steps to Pocket Change: How to Persist When Your Finances Get the Best of You

The following guest post was contributed by Heidi Beckman.

Heidi is a clinical psychologist and proponent of using the science of personal change to improve financial habits. She has been reading and interpreting research on motivation, persistence, and self-control for the past ten years. She works in a medical setting and loves to help patients use simple motivation strategies to improve their physical health. About a year ago, she realized that the same strategies can be utilized to strengthen financial health, as well. Over the past nine months, she’s blogged about this topic and have enjoyed interacting with my readers. Thank you to all who have shared what they learned on their financial change journeys! You can find Dr. beckman at Pocket Change

If you would like to contribute a guest post, click here.

Have you ever heard yourself say “I know exactly what I’m supposed to do to bring more financial order into my life, but I can’t make myself do it!”

Whether we are paying off debt, building a rainy-day fund, or correcting bad financial habits, financial health does not happen through passive waiting, quick-fixes, or a wave of the magic wand. Achieving and maintaining a life of financial health requires persistence.

Thankfully, behavioral scientists have conducted research that gives us important clues about what it takes to persist. As a psychologist who reads the research literature on motivation and personal change, I have found persistence to go by several different names: grit, self-determination, habit, goal attainment, and resilience.

Angela Duckworth of the University of Pennsylvania calls it “grit” and describes it as perseverance and passion for long-term goals. She writes, “Grit entails working strenuously toward challenges, maintaining effort and interest over years despite failure, adversity, and plateaus in progress.”

In that definition lies two clues to what makes persistence so difficult: (1) While any of us can make healthy financial choices for a day, a week, or maybe even a month, true persistence requires the investment of years of our energy and enthusiasm. Makes you tired just thinking about it, doesn’t it? (2) Sometimes, despite our hard work and our best efforts, we don’t have much to show for it, we get limited reward, or our progress stalls. No wonder our level of enthusiasm plummets.

Whatever you happen to call it, whether fortitude, tenacity, or stick-to-itiveness, the concept of persistence contains important elements that help us maintain our momentum when the going gets rough.

Let’s look at five ideas that are taken from the science of motivation:

(1) Develop the identity of a changer. Research shows that if you make your change effort a larger part of your identity, you will be more likely to make the kinds of decisions that will support your end goal. At the same time, any change effort that violates your identity will be doomed to failure.

How can you grow your identity, or make financial change a bigger part of your self-image? This will trigger the kind of decision-making that will support your change efforts.

One of the models that explains how we make decisions is called the “identity model.” This model suggests that we decide important things by asking: (1) Who am I? (2) What kind of situation is this? (3) What would someone like me do in this situation?

For example, if my answer to part (1) is “I am a person who strives to be responsible, to treat myself with respect, and to be balanced in my decision making,” and my answer to part (2) is “This is the kind of situation that could have a long-term impact on my financial standing,” then how would I answer part (3)? I would probably choose a behavior that is responsible and balanced. My identity would support my financial change efforts.

If I find that my identity does not support my financial goals, there are two things I could do. I could change my goals, or I could aspire to a different self-image or identity.

Another way to think about this is through the framework of “self-as-doer,” a research concept examined by Linda Houser-Marko and Kennon Sheldon. They have been involved in a line of research that demonstrates that if you think of yourself as the “doer” of an action, you are more likely to persist at that action, even when obstacles emerge.

In other words, if your goal somehow becomes a part of your identity, you are more likely to stick to it.

For example, if I think of myself as a “runner,” I am more likely to go out and run every morning, even when storm clouds gather on the horizon.

If I think of myself as a “saver,” I am more likely to save money, even when I am in situations of great temptation.

How can you think of yourself as the “doer” of healthy financial behaviors? Complete this statement: “I am a ______________.” Now write this statement on several post-it notes and stick them in places where you will see them throughout the day. For example, put one on your bathroom mirror, one on your steering wheel, and one on your computer monitor. Whenever you see the post-it note, read the statement and try to absorb its meaning.

(2) Adjust your mindset. Any new endeavor is going to involve failure or slip-ups along the way. The problem with failure is that it triggers our “flight” instinct: we want to run away, give up, or retreat.

To stay motivated when we face a long change journey, we have to know in advance that there will be failure en route to our destination.

The easiest way to understand this is to think about the two “mindsets” that are described by psychologist Carol Dweck: the fixed mindset and the growth mindset.

People with a fixed mindset believe that their abilities are unchanging and they simply reflect the way they are wired. For instance, they are born with a certain amount of intelligence, athletic ability, and financial savvy, and there is nothing they can do to change this.

From this perspective, if you fail at something, failure simply confirms that you lack an ability.
People with a growth mindset believe that their abilities are like muscles, and they can build them up with practice.

From this perspective, it is worth it to accept and embrace challenges, because you have the potential to improve yourself and improve your life.

If you want to reach a goal, you need to adopt a growth mindset. People with a growth mindset take risks, accept feedback, and take the long-term perspective. They know that defeat in the present does not necessarily mean failure in the long-term.

People with a growth mindset do not get defeated or discouraged by failure. Instead, they adopt a problem-solving approach to the obstacles that arise. This means that instead of saying “Forget it, I can’t do this,” they say “OK—let me take a step back and look at this. Obstacles are normal. Let me see if I can generate three possible solutions to this problem.”

Imagine how powerful it can be to move forward with a growth mindset. How can you put this into practice in your own life?

(3) Manage the environment. Another way to make progress toward your goal is to find ways to make the right behaviors easier and the wrong behaviors harder (or even impossible).

Let’s consider some ways to tweak the environment to increase the chances that you will participate in behavior that is consistent with your goals.

When you’re working on a personal challenge like paying off debt or saving more money, what does it take to “trick” yourself into doing the right thing? How can you change your environment to set yourself up for success?

If I’m trying to eat healthier, perhaps I raid the pantry at home, throw away all of the junk food, and surround myself with vegetables. If I’m trying to exercise more, perhaps I make sure I have to drive by my gym on the way home from work, and I have my workout clothes ready to go in the back seat of my car.

If I’m trying to reduce spending, perhaps I make sure that I only have a budgeted amount of cash with me (and no credit cards!) when I go to my favorite store.

If I’m trying to become more educated about personal finance, perhaps I surround myself with magazines and library books on the topic, so whenever I have a free moment, I can learn something new.

From a psychology standpoint, it makes sense to manage our environment because the calm, cool, rational side of us is easily overwhelmed by the emotions of the moment. So whatever we can do to make the desired behaviors easier and the undesired behaviors more difficult, we should do it.

(4) Find the feeling behind the need for change. You cannot make change happen and stick by simply modifying your thinking, or “putting your mind to it,” as the expression goes. It seems you have to “put your emotions to it,” as well!

One way we can do this is to find the feeling behind the need for change.

When people ask us why we are working on a particular financial goal, it is easy to come up with an abstract response such as “building security for the future” or “getting on solid financial ground.”

But the reality is, if we are going to be motivated to really work on a challenging goal over a long period of time, we have to be able to find the feeling behind our need for change. We need to be able to recognize the problem or solution in ways that influence our emotions, not just our thoughts. This means that we have to find something that hits us on an emotional level.

It might be an honest look at what the future will be like if we do NOT succeed at personal change. The key question to answer is “What will happen if you continue along your current path and you do not make progress toward your goal?”

This question might conjure up images such as the disappointment in our children’s eyes when we tell them we cannot afford a trip to Disneyworld. Or an image of ourselves desperately searching through the job ads after we retire from our main job but then realize we do not have enough money to live on. Or an image of us receiving an eviction or foreclosure notice. Whatever the image, the key is to make it as rich and detailed as possible.

Alternatively, what hits you at an emotional level might be a picture of what the future will be like if you DO succeed at your financial goal.

Here, you are creating images that give you a hopeful glimpse of the positive outcomes of your hard work. You might picture yourself finally being able to give that special gift to that special someone. Or imagine your child striding across the stage to receive his diploma at his college graduation, knowing that it was possible because of your financial contribution to his education. Or picture a specific scene of you enjoying your retirement rather than worrying about money. If these outcomes seem too far in the distant future, you might picture an outcome that will happen sooner.

(5) Manage stress. If we keep our stress level down, it is easier to maintain self-control and persist in working toward our goals.

Many people will readily admit that when they feel overwhelmed, they try to escape their emotional distress by looking to immediate sources of pleasure or good feelings, such as alcohol, high-calorie foods, or expensive purchases.

Impulse control fails in these situations, because stressed individuals give priority to regulating their emotions instead of controlling their behavior. For example, consider the person who, at the beginning of the day, plans a healthy dinner for the evening. Then, after a stressful day at work, she comes home and comforts herself by indulging in junk food instead of the meal that was originally planned.

A similar thing happens in the money domain when emotionally distraught individuals make store purchases that exceed their budget, buy things impulsively off the Internet, or make questionable financial moves.

When people are upset, they sacrifice impulse control for short-term, immediate pleasures. In other words, when we are stressed, our need to cheer ourselves up becomes the most important consideration.

This means that if we want to strengthen our impulse control, stress management will be a key component of the process.

How can you improve your stress management?

You now have important tools that will help you be more persistent as you work toward your financial goals. Best wishes for your change journey!!

Five Steps to Pocket Change: How to Persist When Your Finances Get the Best of You by

Share This and Spread the Word

About Heidi Beckman

Heidi Beckman

Get My FREE Get Out of Debt Guy Newsletter

It is the smart thing to do.

I promise to keep your email safe and secure.

Close

I want to keep you posted each weekday with just one email about the latest get out of debt news, scam alerts and information to beat back debt.

You can unsubscribe at any time with just one click.

After you subscribe, check your email to confirm your subscription. If the confirmation email does not appear in your inbox in a few minutes, check your spam folder for it. Sometimes it likes to annoyingly hide there.


  • It will keep you posted on the latest scams.
  • You will be alerted to the latest articles.
  • You will wind up smarter than everyone else dealing with debt.