What if you’re not bad with money, you’re just working with outdated software?

If you’ve ever thought, “why can’t I just stick to a budget?”, congratulations. You’re just like the other 90% of us.

Our brains were wired for survival in a hunter-gatherer world, which means they start throwing up error messages when we try to manage direct debits, optimise a KiwiSaver, or resist the dopamine hit of a weekend splurge. 

So how do you fix it? By understanding how your brain works and using that knowledge to build better systems.

1. You don’t need more willpower, you need a better system

Let’s start with something that should feel like a relief: it’s not that you’re lazy. Or forgetful. Or bad with numbers. You’re failing (if we even want to call it that) because you’re human.

“Our brains are wired to do it all wrong,” Dr Brad Klontz said on the Making Cents podcast. 

“To do well with money, you need to delay gratification, be future-focused… and that is completely at odds with our evolutionary wiring.”

What does our evolutionary wiring crave? The instant happiness of a dopamine hit. 

That’s also why the creators of Otto, a new gamified money app, decided the way to actually help people with their money was to use the dirty tricks of gambling and social media, and flip them, to boost good habits instead.

“There are more people who gamble regularly in New Zealand—2.7 million—than invest as retail investors,” said co-founder Tomas van Ammers. 

“There’s a researcher called BJ Fogg. He’s known as a controversial figure in the States, as the person behind the dopamine cycle of a lot of the apps that come out of Silicon Valley. The reward mechanism of dopamine is used to get people to come back to apps, and often not in a good way. Gambling apps lean heavily on this kind of research.”

What Otto does is use those same pathways, but for good. “In practice, the closest analogy for our first game, is called Savings Quest, is Duolingo,” explained van Ammers. “When you create a Savings Quest with Otto, you have a series of checkpoints that reward you with tokens if you meet your goals before those checkpoints. As you reach more checkpoints, you build a streak. And a streak is incredibly simple, but it’s incredibly powerful for getting people to come back.”

With Duolingo, van Ammers says, streaks are the single most powerful reward-making mechanism for getting people to come back and complete their five minutes a day.  “We’re doing the exact same thing, but to get people to build and then maintain a habit of saving.”

The lesson? 

Instead of trying to force yourself to “be good” just because you should, find ways to make it fun. 

Create a sticker chart with mini goals. Create a streak, and see how long you can go putting something into your savings every day, even if it’s just $1. Compete with your friends for who can keep their streak going the longest. 

Willpower is unreliable. Systems are not. Build a system that plays into your brain’s reward circuitry.

2. Automate the good stuff

Saving $20 a week might not feel like much. But creating these habits is important for two reasons.

The first? Saving $20 is more than $0. Small amounts, regularly, build up surprisingly fast. Just look at how fast a little nest egg builds up in your KiwiSaver. 

The second reason? It’s about more than the number. It’s about creating momentum.

“People will gamble away hundreds on a Saturday night and call it fun,” van Ammers said. “But saving $20? That’s seen as a chore. That’s not logic. That’s dopamine.”

So it’s time to combine point one and point two. Everything that you need to think about, make it as fun as you can. 

Everything that you can automate? Assign it to the robots, so that you don’t have to think about it, and fun won’t matter any more. 

“There’s something that’s really reinforcing about those little successes and decreasing friction, which is an important concept. That’s what automation does,” Klontz said. “It capitalises on the status quo bias, which is our human bias to just keep things the way they are. Gym memberships are really, really good at this. 

“Essentially, you want to join a gym and they’re like, OK, we’re going to automatically take some money out of your checking account every month. And it’s automated. You don’t even have to think about it. 

“It’s ‘so helpful’ because you’ve already decided you want to go to the gym. You probably have a vision of this body you want to have or this experience you want to be having physically and all the admiration you’re going to get as you’re walking on the beach. 

“So, what’s it going to take for you to go cancel that subscription? Well, you’re going to have to think of, well, all right, I guess I don’t want that. I guess I don’t want to be healthy.”

The lesson?

Decide what your goals are. Really get clear, and visualise them. Then automate everything you can to help you get there, whether it’s a payment into savings, or even investments, set for the day after pay day. 

Even better, name the account that autopayment is going into. Then if you’re tempted to break into your future fund, you’re reminded of what you’re aiming for. 

Do you want to sabotage that? Probably not. 

3. Your money mindset is inherited, but not unchangeable

Most of us think about money in the way we were taught. That teaching isn’t usually explicit. It comes through watching how your parents behave, what your community values, even how people around you talk about wealth.

Klontz calls these “money scripts,” and they run deep. “We can trace a lot of our problems with money to this ancient tribal brain,” he said. “And then we layer on our own family patterns. If this [pattern] doesn’t work, some people develop what we call ‘learned helplessness’ – they’ve tried, failed, and now they’ve stopped trying.”

Except, we can change the ways we think about money, and the tactics we’re ready to try. The key is often finding people you identify with, and looking for ways to copy their success. That’s why it’s such a relief that the financial industry is finally looking a little bit less… well, older, white, and male. 

There’s more variety than ever before, of people from different backgrounds, who you can look to for lessons on how to build a financial life that works for you.

“’If they can do it, I can do it’,” said Klontz. “That shift in mindset is huge. That’s the gift of seeing someone like you succeed—it breaks the illusion that success is only for other people.”

The lesson?

If your money isn’t working for you, take a step back, and be really honest about why certain things aren’t working for you. 

Just because you’ve always done something a certain way, doesn’t mean you have to keep doing it that way. 

Find people who you admire, and whose values match yours. Look for ways you can borrow from their success.

Tune in to Making Cents, the podcast for people who want financial freedom without giving up their coffee. On Apple Podcasts, Spotify and YouTube.