Ask the readers: Can you use positive reinforcement to train smart money habits?

Most of the time, I can sit down and write a blog post in an hour or two. Or three. I get an idea, then pick up my laptop, find a quiet spot, and hack out my thoughts.

Some articles, however, take months (or years!) to create. This is one of them.

You see, near the end of our RV trip across the U.S., Kim and I picked up a puppy. While visiting my cousins near Tahlequah, Oklahoma — the end of the Trail of Tears and the setting for Where the Red Fern Grows — we bought one of their hound dog mutts. Naturally, we named her Tahlequah (TOWEL-uh-kwah). From the start, we've been in love with her. She's SO CUTE!

Here she is at three months old, about a week after we got her. She is done with her walk in Fort Collins, Colorado — not moving another inch:

Tahlequah is so cute!

Tally is a hound dog through and through. She is ruled by her nose. She has a strong prey drive. She is fiercely defensive of her territory. We knew from the start that proper training was going to be imperative.

From the day we got her, we started employing positive reinforcement.

What is positive reinforcement? The basic idea is that when somebody (or somepuppy) does something you want, you reward the behavior as soon as possible. This, in turn, tends to encourage the behavior in the future. It's a like a virtuous cycle.

I love this example of positive reinforcement from The Big Bang Theory:

Anyhow, Kim and I used positive reinforcement with Tahlequah from the beginning.

The moment she did something we wanted, we rewarded it. We praised her and treated her. When she began to understand that certain actions — sitting, for instance, or lying down — led to positive reinforcement, she offered those actions more frequently. As she did, we began to name them. When she sat, we said “sit” and we gave her a tasty treat. Everybody was happy.

Tahlequah loves to dig

A year ago, I snapped this photo of a woman from our dogwalking group (Lara, a practicing psychologist) using positive reinforcement to get a group of dogs to sit. All at the same time.

Lara gets ALL of the dogs to sit

In June of last year, I got an idea for a blog post: What if we used positive reinforcement to encourage desired money behavior? That'd be awesome!

Over the past eighteen months, I've tried to tackle this topic six or seven times (most recently today). But I'm never able to make it work. It's not that I think it's a bad idea — I think the idea is great! The real issue is I can't think of many examples of how to put this into practice. Exactly how would you use positive reinforcement to build smart money habits?

Now and then, I see small examples.

For instance, Kim deposits checks to her USAA account by phone. She snaps a photo, then uploads it to her account. When she does, the USAA app makes a cha-ching noise. “I love that sound!” Kim told me a while back. “It makes me want to deposit more checks.” That, my friends, is positive reinforcement. But it's only one example.

But when I try to think of other examples, I come up short.

I suppose employer matches to 401(k)s (and other retirement programs) are examples, but they seem to have marginal effect. Other times, the examples of positive reinforcement in the world of personal finance don't make much sense. A child tax credit that incentivizes having children? Uh, that's a little weird. Or credit card rewards that encourage users to spend? Hmmm….

So, after eighteen months of trying to write an article about positive reinforcement and personal finance, I'm giving up. Instead, I'm going to turn this around and ask you for examples.

Have you seen examples of positive reinforcement in the world of personal finance? What are they? More to the point, have you applied positive reinforcement in your own life? Have you used it to encourage yourself toward better behavior? Have you used it to encourage your spouse, your children, your extended family?

Postscript: I'm not kidding when I say I've tried to write about this six or seven times since June 2016. I have several half-finished articles about positive reinforcement and money gathering dust in Dropbox. The first is from July of last year and it's 3500 words long…but still not worth publishing.

More about...Psychology

Become A Money Boss And Join 15,000 Others

Subscribe to the GRS Insider (FREE) and we’ll give you a copy of the Money Boss Manifesto (also FREE)

Yes! Sign up and get your free gift
Become A Money Boss And Join 15,000 Others
guest
42 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Jason@WinningPersonalFinance
2 years ago

Okay I’ll bite. I tend not to look at the amounts in my investment accounts often. I’m pre-FI and live off a paycheck. My goal is to make my contributions and let the markets do their thing. I update my net worth spreadsheet once or twice a year. Seeing that balance go up, is the best positive reinforcement I can think of. I throw a chart or two in there and it’s beautiful! Can’t wait for January!

dh
dh
2 years ago

Whenever I go to the bank and make a deposit, and the cute girls working there see the balances in my accounts, they get all extra friendly and flirty with me! Seriously! There was one the other day in Santa Fe who came really close to asking me for a date! I have to admit, this is kinda fun. I walk in wearing my Canadian tuxedo and bushy beard, and people don’t think much. But once that computer opens up to my accounts, people start asking me all sorts of questions about exactly what I do, what the nature of… Read more »

S.G.
S.G.
2 years ago
Reply to  dh

So what is your business?

dh
dh
2 years ago
Reply to  S.G.

You see what I mean, JD!?! 😉 My businesses revolve around something completely dull normal and boring, commercial maintenance type stuff not even worth getting into, other than to say that the people I know who make the most money in life basically followed the OPPOSITE of their passions. Most people’s passions will not generate a living, let alone make them wealthy. People have to realize that someone like JD is an *outlier,* just like how people like Pewdiepie or Steven Spielberg are outliers. Sure, it’s possible to strike it rich blogging or playing video games, just as it’s possible… Read more »

S.G.
S.G.
2 years ago
Reply to  dh

Totally. I was more curious what kind of business would take you all over NM. I’m in Cedar Crest.

dh
dh
2 years ago
Reply to  S.G.

Well, instead I’ll tell you what I was recently reading about that sounds like a good business — grab bars! Apparently, there’s a lot of money to be made in the grab-bar business, especially in places where there’s a big senior population. I was reading about a filthy rich Florida couple who do grab bars and nothing else. All day long they install grab bars in the shower and other areas for the safety and convenience of seniors. This would be a relatively easy business to start and make money at. So listen up, youngsters, ditch your blog or your… Read more »

jane
jane
2 years ago

Yes. I work in the field of ABA and I use positive reinforcement all of the time to reward targeted money habits.

BusyMom
BusyMom
2 years ago

Nice post.

I got my 9 year old to save up over a 1000 dollars through positive reinforcement – I have blogged about it here: http://www.countdowntotranquility.com/2017/12/day-28-how-this-9-year-old-saved-up-more-than-most-americans/

BusyMom
BusyMom
2 years ago
Reply to  BusyMom

I just took a look at my site stats, and looks like I got a lot of referrals from here. I am happy about that, but just wanted to say that I had no idea that I was advertising my blog.

I am not complaining, I love that they all turned up. I just think I may have broken some blogging etiquette.

Christy
Christy
2 years ago

I have read this blog for many years. JD, when you made changes in your own life such as when you paid off your debt or lost weight, you did this because you were internally or intrinsically driven to do so. Previously, even when beloved people in your life wanted you to become debt-free or more healthy, you did not change. You only changed, and made lasting change when you were ready to do so. You had to make the choice. Much of your writing has focused on strategies such as tracking your expenses, debt snowballs, writing personal mission statements,… Read more »

S.G.
S.G.
2 years ago

Positive reinforcement tends to work better when employed externally. There are many positive reinforment examples for kids. But externally it is far easier to think of employer and bank reinforcements for adults. One is rewards that pay out more if you do something rather than another thing. I used to have a cash back card that gave me a half percent more if I applied my rewards to my mortgage balance.

S.G.
S.G.
2 years ago
Reply to  S.G.

Tax breaks and court protections for retirement accounts are positive reinforcement from the gov’t for retirement savings.

S.G.
S.G.
2 years ago
Reply to  J.D. Roth

Yeah. I believe it was with Countrywide and I’ve never seen anything similar since, though I’ve been through a half dozen mortgages between moving and refi’s on two properties. Now I have a Fidelity card that gives me 2% back straight into my brokerage. I know some people do better with points, but we don’t travel much and I like to keep things simple. The only other card we have is a Sam’s card because it gives us 5% back on Sam’s already low gas prices.

Angie
Angie
2 years ago
Reply to  J.D. Roth

Wells Fargo offers a similar card.

S.G.
S.G.
2 years ago
Reply to  S.G.

Some other thoughts: For most of us the money itself is the reward. It is more important to us to have our cake than to eat it. So is the question for us, or is the question for tools we can give others? For us it might be any mental trick that works, such as setting savings goals, that gets us to a place where we feel we’ve accomplished something. That sense of accomplishment is our only reward. But we’re a small subset. External positive reinforcement could potentially work in a couple relationship. For example you might offer Kim to… Read more »

KLE
KLE
2 years ago

Can’t positive reinforcement be external or internal? If the bank or government gives you a reward, external, if you you reward yourself, internal. As for rewards, both frugal and health minded advocates warn against a “treat yourself” attitude because, of course, a reward of cookies for working out, or a big purchase to celebrate a raise could eliminate your progress. For me, I think the question becomes how do I foster behavior I want maintain? This gets to Christy’s comment that we are varied in what motivates us. When I first started saving money for a serious goal, the act… Read more »

J Law
J Law
2 years ago

Some people use graphics–charts and such–that show their savings increasing weekly/monthly/etc. I have used accountability partners to help reach many goals. For example, if I wanted to save $100 this month to start an emergency fund, I’d set the goal with my AP, then break out weekly tasks that needed to be done (“spend $10 less on groceries” and “sell old electronics on eBay”), and check in with my AP to report progress several times. Good APs will help you stay on target, help you unsnarl problems (“but the X is on sale! Isn’t it smarter to buy the X… Read more »

JC Webber III
JC Webber III
2 years ago
Reply to  J Law

Sorry, but I can not figure out what ‘AP’ stands for. Can you enlighten me?

thx…
— jcw3rd

S.G.
S.G.
2 years ago
Reply to  JC Webber III

I assume from his second sentence that it means “Accountability Partners”.

J Law
J Law
2 years ago
Reply to  S.G.

Yes, accountability partner.

lmoot
lmoot
2 years ago

I like to break up my savings goals into different buckets, and color code them based on where they are in the lineup (green = completed, red = working on it, grey = waiting to start). I LOVE changing the color from red to green. That means it’s ready to go when it’s time to pay the debt off. And I equally love changing grey to red, because it means a new challenge. As I pay off my 0% cc balances, my credit score continues to go up (positive reinforcement). And when I get my balances low enough, I can… Read more »

mike
mike
2 years ago

Off topic, but this is an idea that’s probably already out there:

When one weighs themselves, the scale sends the weight and other info to a spreadsheet via wifi. Then the spreadsheet could chart Monthly/Yearly tabulations.

Accidental FIRE
Accidental FIRE
2 years ago

I sell graphic arts on a few websites and I use that same “cha-ching” cash register sound on my smartphone for when I get a sale! I guess it’s positive reinforcement for me to keep doing the hustle, as opposed to a personal finance one. But every time I hear the cha-ching I get a little thrill. Kinda like a Scooby-Snack!

SmileIfYouDare
SmileIfYouDare
2 years ago

Yes, do we need a new slogan: “Positive Reinforcement For Fun and Profit” or “Positive Reinforcement Is Good For You” ?? I agree that I am as susceptible to enforcement (positive or negative) and if repeated becomes re-inforcement. Plenty of advertising and commercial manipulation obviously depends on it. BUT!?! Do I need positive reinforcement to do the right thing? This is a question that plagues me: Do I need positive reinforcement to do the right thing? Why would I need a chewy gumdrop to do the right thing if I am not ruled by instinct like an animal. Well, since… Read more »

Chris
Chris
2 years ago

How about child savings accounts? At my kids bank they deposit money and get a treat dollar or some other positive reinforcement toy. And I get a cup of free hot chocolate.

Ali
Ali
2 years ago

Positive reinforcement charts – e.g. Coloring a square representing $’s paid off in debt or a thermometer showing a rise in savings each month. Also wrapping the credit card with a visual reminder or picture of a life goal e.g. Your house
( for mortgage reduction) or a wedding party (when saving for a wedding) Just the simple act of saving in a piggy bank can be sufficient positive motivation to continue to fill it up before spending the contents or saving them somewhere more long term.

David
David
2 years ago

Here in the UK the government recently launched LISA (Lifetime ISA), from April 2017 I think. The idea is to get people under the age of 40 saving for retirement or their first house. Come April 2018 any money which has been deposited in the first year will be topped up direct into the account 25% from the government. Going forward this will happen every month. Deposit £100, the government will put in £25 the next month. That is the best example of positive reinforcement I can think of. There are some caveats, e.g. the saver is depositing post tax… Read more »

WantNotToWantNot
WantNotToWantNot
2 years ago

As always, J.D. has given us a great topic to discuss on this forum! Love the example from the UK. Along these lines, there have been occasional efforts in the U.S. to mandate signing up for a 401k automatic (as the default) and declining it would take the effort. It gets a lot of support, but so far, no action, and that simple switch would make a tremendous difference since there is a vast number of employees who delay action, and just don’t sign up. This it is a good example of how to make a good behavior the default… Read more »

WantNotToWantNot
WantNotToWantNot
2 years ago

PS Here’s a link to the Pomodoro Time Management Method….it’s gets a lot of play on the web…(selling tomato timers) but the idea is a simple one and it works.
http://www.marinaratimer.com

stellamarina
stellamarina
2 years ago

I used to use that while studying for exams while in nursing school….it really worked.

NickelNerd
NickelNerd
2 years ago

I was just listening to the Freakonomics podcast episode on the “No Lose Lottery”. Instead of earning a tiny bit of interest from your savings account, the interest from all participants is pooled together and you have a chance of winning the whole pot. It scratches the gambling itch while “tricking” you into saving. Right now it’s illegal in most places because it IS defined as gambling (and the states do not want to share those sweet lottery profits). I find it an interesting concept.

http://freakonomics.com/podcast/say-no-no-lose-lottery-rebroadcast/

Michael
Michael
2 years ago

I think it is really hard to use positive reinforcement in yourself because most positive reinforcement involves money or things you buy with money. This makes it almost like a self-feedback loop. If you are very undisciplined with money and you fail to reach your goal you are likely to just get whatever you used as a reward since you have 100% control over it. Where people with good financial discipline can hold out and will have an easier time if they dont meet there goals not caving in and giving the reward. I think maybe this would work with… Read more »

Laure
Laure
2 years ago

I recently started a specific positive reinforcement for myself: When I bring my lunch to work, *that day* I log on to my online bank and transfer $5 from my checking into my “saving for a house” fund. Where I live, nearly any lunch out costs approx $12 or so. I figure whatever I bring from home will be less than $7. So, I can plan ahead and buy delicious food to bring and still come out ahead. But, now that I have the $5 incentive, I’ve found that even when I don’t have any delicious or even decent food… Read more »

Donald Stanat
Donald Stanat
2 years ago

My parents never talked to me about saving for retirement, but eventually a VALIC salesman got me started. (A few years later I bought my way out of VALIC.) When each of our kids started to earn money, I told them I would match anything they put into an IRA. That continued for a few years, but each of them soon caught on. Decades later, I have three kids that are sufficiently savvy that I no longer offer advice, and all have healthy investment accounts.

Iain
Iain
2 years ago

I agree with the commentator who said positive reinforcement is seeing the money flow in. Like Rockefeller watching his dividends, I blogged about it recently.
Another thing I stress is that you can get rich quickish rather than slowly, but there’s a very specific way, one which involves, for instance, avoiding bonds – or even better, selling them (aka getting loans) and buying equity against them).
Anyway, enjoying your blog, all the best

stellamarina
stellamarina
2 years ago

This is a small type reinforcement but it really worked for me in establishing a habit of going for a walk around my town on Sunday mornings over the past 15 years. At first I just looked for coins on the ground as I walked along and picked them up and put them in a can to count at the end of the year. Then Hawaii started a bottle deposit reward for recycling and I started picking up plastic bottles and aluminum cans as I walked around. Proceeds all go to my travel account and I get rewarded for exercising.

leukothea
leukothea
2 years ago

One thing that motivates me is lists — making lists, and checking items off lists. I have a list of all my goals. When I meet them, I go back to the list and say “MET” and the date. Getting to type in that “MET” next to the goal is motivational for me! I also like adding new goals to the bottom of the list. It gets me daydreaming about what my future could hold. I also have a list of everything I need to do in a bunch of lists and sub-lists in Workflowy.com. When I complete one, I… Read more »

Mariele Storm
Mariele Storm
2 years ago

Yes, I’ve seen it. I’m not talking about good positive reinforcement, though. I mean “I didn’t spend $50 this week on xx, so I can spend $50 on xx (something equally frivolous and not increasing net worth).” Aside from those examples (which make me wince), I don’t see much positive reinforcement. The actual act is positive itself. If I pay off more debt, I have more money each month to pay off more debt, and so on the cycle goes until you’re left with an extra chunk of cash each month and are debt free. Then you put it into… Read more »

shares