(MONEY Magazine) -- The mind is a powerful tool, especially when it comes to spending and saving. Whether it's by going over your finances in a different language or putting on a smile at work, tricking yourself into thinking differently about your finances can make a huge difference.
This is part of a special report on 101+ ways to build wealth. In this story, readers and experts weigh in with advice on how you can turn behavioral foibles into assets rather than liabilities.
Weigh decisions in Espanol. In his recent book, "Thinking, Fast and Slow," Nobel Prize-winning psychologist Daniel Kahnemann explains that human brains are of two minds: the fast, intuitive decision-maker and the slower, more analytical ponderer.
When it comes to finances, people often let their fast-twitch muscles do the deciding.
A new University of Chicago study suggests an antidote: Think through a financial situation in a non-native language, which can lead you to better considered decisions. "It makes you slow down and think it through more," says Boaz Keysar, the professor who led the research.
No habla a foreign tongue? Keysar says that focusing on why you're making a particular decision can help you gain objectivity.
Don't worry, be happy. A Brookings study found happier workers ended up with higher incomes.
So curb connecting to work 24/7 to spend more time with friends and family -- that's key to happiness, finds University of Pennsylvania prof Martin Seligman.
Personalize your accounts.
People who labelled their savings accounts with specific goals put away 31% more money than those who didn't, according to ongoing research sponsored by Innovations for Poverty Action. Those results suggest that assigning meaningful names makes your goals seem tangible. So attach a moniker to your accounts, like "retirement fund" or "anniversary trip."
Use a photo to keep you riveted. Adding a picture of what or who they were saving for (whether it's a motorbike or a child's college education) helped subjects stay committed to their savings goals, according to a recent study.
So put a nice photo of Junior -- or Harley -- in your wallet. That way, when you're tempted to pull out a credit card for an impulse purchase, you'll have a second thought.
Choose your friends wisely. Fight the urge to keep up with the Joneses by palling around with the right types of people.
"If you spend time around frugal people, you are more likely to mimic their attitudes and actions toward building wealth," says Chicago financial planner Cicily Maton.
Make friends outside the 'hood. A study last year out of the University of Southern California found that the more insular the neighborhood, the more likely an individual would copy or outdo her neighbor's car purchase.
Spend time with the less fortunate. Researchers at the University of New South Wales, Australia, found that for every extra dollar earned by the people around you, you will put 9¢ less into savings. Another good reason to volunteer in a soup kitchen?
Hang with the folks at the ugly house. Several studies confirm the "neighborhood effect" -- the proclivity of Americans to spend a lot of money improving their houses when others in their area are doing so.
Avoid being sucked in by asking a realtor how much that home theater will add to your property value.
Probably not so much.
Connect to the future you
One key roadblock to retirement saving is the emotional disconnect you may feel toward the idea of your older, retired self. People are reluctant to sacrifice spending today for the sake of someone who feels like a stranger. These steps can help:
Visualize your older self. Young people who looked at aged images of themselves said they'd save twice as much as a control group, a recent study found. Do your own digital aging with apps like AgeMyFacePro.
Imagine your dream retirement. Behavioral economist Shlomo Benartzi suggests picturing exactly how your retirement would look if you saved enough. Then determine what steps you can take to make the vision play out.
Spend time with old folks. In a study led by NYU prof Hal Hershfield, people who were prompted to think about their grandparents were likely to have saved more than those who weren't. Bet Aunt Ida would appreciate a visit anyway.
See what your nest egg buys you. Among investors who got projections on how much income their savings would yield in retirement, those who subsequently decided to change their contributions increased their savings by $800 a year, according to a study from the Financial Literacy Center.
See if the exercise will be a wake-up call for you: Use a retirement-income calculator (find one at cnnmoney.com or troweprice.com) to convert your current 401(k) balance to future income.
Money magazine readers weigh in: Focus on hard numbers, not feelings
"Do the math before making any financial decision. How much money does a company have to make to justify a P/E of 50? How much does a house have to appreciate for buying, rather than renting, to make sense?" -- John Quinn, Queens, N.Y.
Play on your guilt. When you set up automatic transfers to help you save more, a slight tweak can help you fight urges that might have you spending the money before it gets moved.
Instead of transferring the money from a checking to a savings account, split your direct deposit between the two, putting anything beyond fixed expenses in savings right away, suggests Austin financial adviser Tony Aguilar.
"The guilty feeling of transferring money out of a savings account will prevent you from moving it to checking as readily."
Set some ground rules. Studies analyzing stock traders' reactions to viewing their results online have shown that strong emotional reactions tend to lead to poorer performance. So create an investing policy statement that clearly lays out the conditions under which you will sell.
"If you actually write down a plan to limit your allocation shifts to no more than 10% in a down market, you will be less likely to panic and sell everything," says Santa Clara University finance professor Meir Statman, author of "What Investors Really Want."
Give yourself room to play. You know it's prudent to invest mainly in funds but can't resist picking up a few shares when you read about a company with a hot product and seemingly stellar prospects or are convinced a particular industry is about to take off. Then, give in. Yep, give in -- but just a little.
Laura Thurow, director of private wealth management research at R.W. Baird, suggests carving off 10% or so of your portfolio to invest on hunches and urges. "You're giving yourself room to react without completely undermining your long-term strategy," says Thurow.
Do you know a Money Hero? MONEY magazine is celebrating people, both famous and unsung, who have done extraordinary work to improve others' financial well-being. Nominate your Money Hero.
|What we want Apple to unveil at WWDC|
|Millennials squeezed out of buying a home|
|7 traits the rich have in common|
|Big Data knows you're sick, tired and depressed|
|Your car is a giant computer - and it can be hacked|
Carlos Rodriguez is trying to rid himself of $15,000 in credit card debt, while paying his mortgage and saving for his son's college education.
Susan Carson and Laura DeLallo make $225,000 and have half a million in retirement savings, but their sprawling portfolios is proving hard to manage.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.17%||4.11%|
|15 yr fixed||3.19%||3.16%|
|30 yr refi||4.19%||4.12%|
|15 yr refi||3.21%||3.19%|
Today's featured rates: