If your New Year's resolutions included growing—or starting—your savings, you're already ahead of the pack.
Only about a third of Americans recently surveyed by Fidelity made any kind of financial resolution this year; and of those who did, just over half were aiming to stash more cash.
Kudos to you for taking this important step toward financial security.
Want to make sure your good intentions aren't derailed before the month is out? The key is taking initial actions that will make repeating good habits easier, says University of Chicago economist Richard Thaler.
"We tend to revert to our long-run tendencies," says Thaler. "To effect real changes, you have to make some structural change in the environment."
With that wisdom in mind, the seven life changes that follow will help you save more money this year.
1. Use Inertia to Your Advantage
Research by Thaler and others has shown that people are victims of inertia: If you aren't used to saving money with regularity, it's likely going to feel like such a chore to start that you'll never bother—or, you'll quit after one account transfer.
But when your money is already being saved automatically, inertia works in your favor, since it'll take more effort to stop saving than to do nothing. That is why a growing number of 401(k) plans offer automatic enrollment with a default monthly contribution rate.
Still, you may need to stick a hand in the machine if you want to have financial freedom in retirement, since the default rate (often around 3% of salary) won't get you far in your golden years. Most planners recommend saving at least 10% of income.
Even if you set up your own plan, you probably haven't touched your contribution rate since; more than a third of participants haven't, according to a TIAA-CREF survey.
You can benefit from another relatively new feature called "auto-escalation." Offered by nearly half of companies, auto-escalation lets you set your savings rate to bump up annually at a date of your choosing and to an amount of your choosing.
For other savings accounts, harness your own "good" inertia by setting up automatic transfers on payday from checking to savings (if you don't see the money, you won't get attached to it). Better yet, ask your HR department if you can split your direct deposit to multiple accounts.
2. Keep Your Eye on One Prize
Setting up automatic savings works well if your income and expenses are predictable; but what if either or both aren't set in stone? You can save money as you go, but you'll be more successful if you narrow your objectives.
Research from the University of Toronto found that savers often feel overwhelmed by the number of goals they need to put away money for—a stress that can lead to failure. Thinking about multiple objectives forces people to consider tradeoffs, leaving them waffling over choices instead of taking action.
One solution? Prioritize your goals, then knock out one at a time. If you know you need to contribute $5,000 to your retirement funds this year, focus on completing that first. Once it's done, move on to saving for that dream home.
Another strategy is to think about your goals as interconnected; participants in the Toronto study were also able to overcome their uncertainty about saving when they integrated their objectives into an umbrella goal. So, for example, if you are saving for both a car and a vacation, consider setting up a "road trip" fund.
3. Focus on the Future
A part of what keeps people from saving is that we don't connect our future aspirations with our present selves, research shows.
One way to get around that is by running some numbers on your retirement using a calculator like T. Rowe Price's. When participants in a study by the National Bureau of Economic Research were sent exact figures showing how retirement savings contributions translated into income in retirement, they increased their annual contributions by more than $1,000 on average.
Another easy trick? Download an app like AgingBooth, which will show you how you'll look as a geezer. One study showed that interacting with a virtual reality image of yourself in old age can make you better at saving.
This trick can work for more than just retirement. Another study found that when savers were sent visual reminders of their savings goals, they ended up with more cash stored up. Consider leaving photos of your goal (e.g., images of your children or dream home) next to the computer where you do your online banking to cue you to put more away.
4. Ignore Raises and Bonuses
As Harvard professor Sendhil Mullainathan has said, the biggest problem with getting a bonus is it'll likely make you want to celebrate and spend it all—plus some.
The windfall creates an "abundance shock," which gives you a misleading sense of freedom.
The simplest solution to this problem is to pretend you never got the raise or bonus in the first place, and to instead direct that new money into savings right away. (Remember the 401(k) auto-escalation tip? Set your contribution to bump up the week you get your raise.)
The same goes for when you return an item to a store for a refund or get a transportation reimbursement check in the mail. The faster you put extra cash into savings, the faster you'll forget about spending it.
5. Make it Contractual
Carrots and sticks work.
One study asked smokers who were trying to quit to save money in an account for six months; at the end of the period, if a urine test showed them free of nicotine, the money was theirs. If not, the cash was donated to charity.
Surprise, surprise: People who participated in the savings account were more likely to have been cigarette-free at the six-month mark than a control group.
If you're the type who responds to disincentives, enlist a buddy who can help you enforce upon yourself some kind of punishment if you don't live up to your savings goal (e.g., you might promise a roommate that you'll clean the bathroom for six weeks).
Maybe you respond better to positive feedback? Simply having a supportive friend or relative to report to on a set schedule may help you achieve results, as many of those who have participated in a group weight loss program like Weight Watchers can attest. Or you might look for some (non-monetary) way to reward yourself if successful.
You can use the website Stickk.com—inspired by the aforementioned study on smokers—to set up a commitment contract that involves incentives or disin