Scientific Idea: Deliberate Practice (Reference: Ericsson, Krampe, & Tesch-Roemer)

Scientific Idea: Getting Unstuck (Reference: Prochaska, Norcross, & DiClemente)

Scientific Idea: Being Resilient (References: Masten & Reed; Tugade & Fredrickson)

Scientific Idea: Setting Powerful Goals (Reference: Locke & Latham)

Scientific Idea: Challenging Worrisome Thoughts(References: Burns; Greenberger)

Scientific Idea: Thinking of Yourself as a Doer (Reference: Houser-Marko & Sheldon)

Scientific Idea: Deliberate Practice

Reference: Ericsson, K. A., Krampe, R. T., & Tesch-Roemer, C. (1993). The role of deliberate practice in the acquisition of expert performance. Psychological Review, 100, 363-406.

What does this scientific principle mean for our financial behavior?

Science has shown that if we want to become experts in a certain activity, there are certain conditions that we have to put into place. The conditions for optimal learning are:

(1) The motivation to pay attention and to exert effort;

(2) A well-designed and well-defined task that takes into account where we are starting, to make sure the goal is challenging enough;

(3) Immediate, informative feedback, so we know how we are doing; and

(4) Repetition of the same task for 10,000 hours or 10 years.

How would this apply to our financial behavior? Challenge yourself to put these conditions in place:

(1) Decide that you are going to make your finances a priority, because they are worthy of your attention and effort;

(2) Create a well-defined financial goal that takes into account your current state of readiness for change;

(3) Create a tracking or self-monitoring system that you check on a regular basis to evaluate how you are doing; and

(4) Keep practicing.

Good luck, and let us know how it goes!

Scientific Idea: Getting Unstuck

Reference: Prochaska, J. O., Norcross, J., & DiClemente, C. (1995). Changing for good: A revolutionary six-stage program for overcoming bad habits and moving your life positively forward. New York: Collins.

What does this scientific principle mean for our financial behavior?

Sometimes, when we are trying to make a personal change, we substitute thinking for acting, and we keep fooling ourselves by thinking that we are going to act “someday.” We may even fall into a trap that keeps us stuck.

Here are some mental tasks we can work on to help ourselves get unstuck:

(1) Gain a better understanding of your behavior. Look inward, but also ask people you trust for their perspective on your behavior. Find out what forces are at work that might be preventing you from moving forward financially.

(2) Overcome the fear of failure. Realize that mistakes are opportunities for growth and for refining your approach the next time around.

(3) Overcome the fear of meeting your “new self” that will emerge as you change. Allow for the possibility that you may love the new and improved version of yourself!

(4) Be able to let go of the security that comes with staying stuck. You can take calculated financial risks that will allow for personal and financial growth, but you have to be willing to let go of the habits that feel most familiar and comfortable to you.

Consider the traps that keep us from moving forward:

(1) The search for absolute certainty: This is the unending search to understand every aspect of your financial problems before you do something about them.

  1. Problem: You are substituting worry for action.
  2. Solution: Remind yourself that there will always be room to doubt your understanding of the problem, but there comes a time when you need to make the decision to change.

(2) Waiting for the magic moment: This is the rather irrational belief that someday, all of the planets will align and it will be the perfect time to initiate change.

  1. Problem: There is no absolute right time, and there is no absolute wrong time.
  2. Solution: You can create the optimal time for change by doing a good job preparing yourself for it.

(3) Wishful thinking: This is the desire to continue with your current habits coupled with the expectation of a more positive outcome.

  1. Problem: The passive approach of “wishing for things to be different” is rarely successful.
  2. Solution: Remember the difference between wishing (which is passive and external) versus hope (which is active and realistic). Hope prompts us to envision our success, and then work toward it!

Scientific Idea: Being Resilient


Masten, A. S., & Reed, M. J. (2002). Resilience in development. In C. R. Snyder & S. J. Lopez (Eds.), Handbook of Positive Psychology (pp. 74-88). New York: Oxford University Press.

Tugade, M. M., & Fredrickson, B. L. (2004). Resilient individuals use positive emotions to bounce back from negative emotional experiences. Journal of Personality and Social Psychology, 86, 320-333.

What does this scientific principle mean for our financial behavior?

We say that someone is resilient when they do “OK” or “better than OK” even when having encountered a difficult event, life challenges, or some kind of risk. Consider popular examples such as Helen Keller, Lance Armstrong, and Christopher Reeve. They all overcame tremendous challenges to achieve amazing victories, each in their own way.

What are some of the general factors that predict resilience?

(1) Personal responsibility. People who are resilient take responsibility for their own actions, successes, and failures. They believe they can influence the outcome of events.

(2) Problem-solving orientation. People who are resilient have a problem-solving orientation. Instead of allowing discouragement, frustration, or hopelessness to paralyze their progress, they get to work identifying potential solutions to a problem, then considering the value of each solution.

(3) Hopefulness. People who are resilient try to remain hopeful even in times of distress. It does not mean that they never feel discouraged or defeated, but they do not allow these feelings to take over or to excuse them from healthy action.

(4) Social support. People who are resilient make good use of friends, family members, and other support people to provide practical help or to provide emotional help such as encouragement.

To apply these ideas to your financial behavior, consider:

-Which of my personal qualities have gotten me through difficult financial challenges in the past?

-What would it mean for me to make the choice to be resilient when it comes to my money behavior?

-What is one area of my financial life where I can step up and take more personal responsibility?

-What is one area of my financial life where I need to apply my problem solving skills?

-What is one area of my financial life where I need to practice hopefulness?

Scientific Idea: Setting Powerful Goals

Reference: Locke, E. A., & Latham, G. P. (2002). Building a practically useful theory of goal setting and task motivation: A 35-year odyssey. American Psychologist, 57, 705-717.

What does this scientific principle mean for our financial behavior?

Goal setting works because goals energize you, they lead you to be persistent over time, and they lead to the discovery and use of the most relevant strategies for the task at hand. People who are successful at maintaining a personal change on a long-term basis set goals with a few basic rules in mind:

  1. Before setting a goal, take time to reflect on your dreams and values, and consider what you really want to achieve.
  2. Write SMART goals (specific, measurable, achievable, realistic, and time-based)
    1. Specific, challenging goals lead to better performance than nebulous goals.
    2. Measurable goals allow you to gauge your progress.
    3. Achievable goals are action-oriented and will fit into your life for the rest of your life.
    4. Realistic goals focus on ONE thing and do not include perfectionistic words such as “always,” “never,” “should,” or “have to.”
    5. Time-based goals can be broken down into a series of steps (subgoals) that are concrete, measurable, and connected with a specific timeline.
  3. Physically write down your goals. This directs your attention toward your goals and starts transforming your brain in the service of supporting your efforts.
  4. Write your goals in positive language. We tend to be more successful when we think of ourselves as moving toward something rather than moving away from something.
  5. Make your goal public. Write it on a big sign and post it on the refrigerator. Tell your friends and family members about your goal. Take out an ad in the newspaper and announce your goal to the world. This helps make it a matter of integrity.

Take a moment to write down a financial goal that you are thinking of working on. Now go through the list above and see if you can make adjustments to the goal to make it a powerful, workable financial goal.

Scientific Idea: Challenging Worrisome Thoughts


Burns, D. D. (1999). Feeling good: The new mood therapy revised and updated. New York: Harper Collins.

Greenberger, D., & Padesky, C. A. (1995). Mind over mood: Change how you feel by changing the way you think. New York: Guilford.

What does this scientific principle mean for our financial behavior?

It is easy to get trapped in frightening thoughts that we are doomed to financial failure or that we are incapable of improving our current financial situation. Do you recognize any of the following phrases, which are common phrases from the “language of worry?”

What if…?

Have to, got to, must

I can’t

Awfulizing (“It’s horrible that my employer didn’t give me a raise this year.”)

Catastrophizing (“Pretty soon I’m not going to be able to pay my bills anymore.”)

Mind reading (“My friends probably think I’m a loser.”)

When you notice that these kinds of thoughts are circling around and around in your brain (most likely in an unproductive direction), see if you can jolt yourself out of your anxious thinking by asking yourself the following questions:

How likely is it really that this awful thing will happen?

How many times has it actually happened in the past?

What is the evidence that it will happen?

If it happened, what would be the worst part? Would I manage? Would I survive?

If I imagine myself up on a balcony looking down at this situation, what do I see?

If a good friend were worried about being in this type of situation, how would I reassure him/her?

If a good friend knew that I was worried about this situation, how would he/she reassure me?

What are the disadvantages of thinking this way?

Could there be other ways to look at it?

Could there be a more balanced way of thinking about it?

Scientific Idea: Thinking of Yourself as a Doer

Reference: Houser-Marko, L., & Sheldon, K. M. (2006). Motivating behavioral persistence: The self-as-doer construct. Personality and Social Psychology Bulletin, 32, 1037-49.

What does this scientific principle mean for our financial behavior?

Did you know that if we define ourselves as the “doer” of an action (think “I am a runner,” “I am a money saver,” or “I am an investor”), we are more likely to persist in working toward that goal, even when unexpected obstacles appear in our path? Researchers have found that when our goal becomes a part of our identity, that can help sustain our motivation over time.

Try these ideas to make your goal a part of your identity:

-Complete the statement: “I am a _______-er!”


I am a net worth tracker.

I am a debt eliminator.

I am a stock evaluator.

I am a retirement saver.

-Now say the statement aloud, and with gusto!

-Practice working this statement (tactfully) into your conversations with the people in your life who know you best and who support you the most.

-Write the statement on a post-it note and display it where you will see it often.

-Make a list of all of the benefits that will emerge when you sustain this identity over time, and post this list in a place where you will see it often.