It's not just lack of self-control that keeps many of us from saving as much as we should. Harvard economics professor Sendhil Mullainathan tells CNN Money that it's human nature not to save, but we can get better at it.
He says our "scarcity of attention" keeps us from seeing what's most important and focused on urgent expenses rather than future priorities like retirement or college savings. You can beat that trap with automated savings (advice that surprises probably no one but bears repeating). Also, if you don't have a steady paycheck or during times of "extra" money, you'll need to trick yourself:
The question is what you do at times of abundance — say, if you get a tax refund. You have a magical opportunity to escape scarcity. But studies show that if I give you an abundance shock of $10,000, you don't just spend that $10,000. You end up spending $20,000, because you're thinking, "I have all this extra money."
You forget how you felt under the conditions of scarcity. You need to think, "Instead of using this windfall to buy something nice, I should put it in a savings account."
There's a cool website I've used, FutureMe.org. It lets you write an email to yourself to be delivered later. Say you are struggling to make a credit card payment. You send yourself an email to arrive in December, when you're going to get your Christmas bonus, saying, "Remember last March when making that payment was a pain? I don't want to be back there. As attractive as shopping is right now, let's put some of our bonus toward paying down the credit card."
Mullainathan mentions a Save More Tomorrow program which suggests that committing to save more in the future is more effective than trying to save more now. So doing something like the 52 Week Money Challenge where you're ramping up your savings slowly but surely could be a better approach for some.
