Getting Your Brain to Help You Save Money

As a long-time financial journalist, I can tell you that, time and time again, I’ve seen how emergencies can completely derail financial security. Job loss, illness, even a flat tire can throw our budgets into turmoil and lead to debt, sap our retirement savings, and create financial circumstances that can take years to recover from.

We all know intellectually that we need a savings stash. Still, a study from finds that 66 million U.S. adults have zero dollars saved for an emergency. Gen Xers are in the worst position: 33% of the group haven’t saved anything.

“This underscores the fact that it takes time, especially because expenses grow faster than many Americans can save during the home-buying, family-raising years,” says Greg McBride, Chief Financial Analyst at

Reprogramming Our Brains

However, behavioral finance experts say that before we start beating ourselves up, we need to take a realistic look at why it’s so hard for our brains to grasp what it means to save.

World renowned financial behavior expert Ted Klontz says the part of our brains called the “reptilian brain” works against our need to save.

“The reptilian brain continually scans for threats. It is waiting for death to come walking through the doorway, so it lives in anxiety. Since anything positive is not a threat, it’s oblivious to the positive. It also doesn’t understand the concept of the future, but lives only in this moment,” says Klontz.

When it comes to managing our brain’s hard wiring against saving, Klontz says the solution is to take out the ‘decision making’ aspect. “The most successful savings plans are automatic. The money comes out before it comes into our hands. That’s the science behind federal withholding tax and Social Security, both of which “save” money for us. The best way is to work around such self-defeating wiring by copying what the government knows; create automatic devices that save for us.

Stay Connected To Your Goals

In addition to doing things like setting up automatic withdrawals for savings through your employer or bank, it’s also important to stay clear on your most important financial goals and determine how much they cost.  That information– knowing the numbers– will give your brain the “power to pause” before you spend in ways that inhibit your ability to save for what really matters or jeopardizes your financial security through lack of emergency savings.