Follow these tips to design a decision-making framework that reliably leads to smart financial choices.



We often use the word when we talk about money, and for good reason. We want to be sure that our financial decisions have their intended impact. But being intentional can feel overwhelming: What does it mean, exactly? Where do I start? 

To answer that question, we draw on a concept known as “choice architecture,” the brainchild of Nobel Prize–winning behavioral economist Richard Thaler. Choice architecture can be broadly defined as the designing of choices to predictably influence decision makers.1

When we act as intentional choice architects, we determine what outcomes we want to achieve, and we design our decision-making environments to have the best chance of reaching those goals.

And we can all be architects of our own financial lives to achieve the outcomes we desire. In this article, we present four methods to help you become an intentional choice architect of your financial life, setting yourself up to make smart choices and predictably influence your behaviors.

Think of the architect of a building. It’s difficult to imagine that she would not know what a building would be used for before designing it. Being an architect of your financial life is no different. Identifying the desired use of the capital is critical to designing the right strategy to get you where you want to go. For example, is the money intended for annual lifestyle consumption or for perpetual growth of wealth? The design, construction and review of the financial strategy will be entirely different for lifestyle versus growth capital. Lifestyle capital will need to reliably distribute cash every year (without decumulating too quickly), while the growth capital will focus on the continual reinvestment of any monies distributed (in the most efficient way possible). 

The image shows two floorplans: one of an office building and one of a home. Below, it shows two pie charts: one broken into three parts with equity, cash and fixed income; and one with only one section of private equity.

Four methods to become the architect of your financial life—and predictably influence your behavior


Choose your words carefully

Language is one of the most powerful tools to predictably change life decisions—including financial decisions. Humans understand that people have many word choices available to them. So they know that the specific words chosen to describe decision-making options reveal important information.2 Think of a glass that is half-full or half-empty. “Half-full” signals optimism, while “half-empty” is clearly pessimistic. Or imagine a scenario that has an 80% chance of success versus 20% chance of failure—the meaning is the same in both descriptions, but the framing changes how we see the odds.

To that end, if you are looking to unite family members around a particular goal or “money mission,” focus on positive language. The mission should be clearly defined, along with the behaviors that strengthen it. Perhaps the mission aims to use financial capital to support the passions and purposes of family members. Behaviors to further that mission might include pursuing education or taking jobs that bolster those passions or purposes. A different mission—to create a sustainable family business across multiple future generations—would suggest different supporting behaviors: the pursuit of education related to the family business, for example, as well as activities that support family unity.


Harness the power of inertia

For many human beings, inertia is a powerful force (and one that choice architecture takes very seriously). Doing nothing is not only the path of least resistance—it can create much less worry that you’ll make the wrong decision compared to doing something. This is especially relevant when it comes to decisions about money. 

Ask yourself: If something were to happen to me, what would automatically happen next? Would my family be set up for success?

Laws in the location where you are domiciled will likely determine what would automatically happen (unless other measures have been put in place). Identify which elements in those default rules are aligned, or not aligned, with your intentions. Increasing alignments through wills and estate plans are pieces of choice architecture that can create peace of mind for you and your family. 

To make good behaviors more automatic, you might also consider setting up pre-scheduled (same day/date) reviews on a quarterly or annual basis with professional advisors and family. Or you might make systematic both distributions (to manage lifestyle spending) and investment plans (to avoid missing out on market opportunities). In this way, “doing nothing” can itself be a positive behavior that leads to better financial outcomes.


Make good decision making easy 

When you make it easy to make good decisions it helps create decision-making frameworks that smooth the way toward what you are trying to accomplish with your money. 

Maybe you plan to spend or give away all of your wealth, or maybe you aim to leave a legacy for your heirs. In either case, you need to articulate what amount of cash you should have available to live your life with confidence, and segment that off from the investments you will need to reliably provide for your future lifestyle spending. That’s part of your decision-making framework—removing a key part of what makes decisions difficult: determining what to do first.

Then you can consider some of the decisions at hand. Do I have enough to give to children, other family members, the community? Am I clear about the purpose of the gift, and do the recipients understand my intent? Next you can proceed to making the more specific decisions, determining, for example, the most efficient timing and structure of your gift.


Reduce the number of choices

It’s fascinating how human beings can be attracted to complexity in financial decision making, even if it leads to bad decisions. But research suggests that when it comes to financial decision making, less can definitely be more.3

Reducing the number of choices can be valuable because we can’t effectively process more than a certain amount of information to make decisions in a given period of time. So think about all of the financial decisions you have in front of you. Do you offload decisions to others so that you can give the most important decisions the attention they need? Is your investment strategy overcomplicated, considering what you’re trying to achieve with your money? Answering these questions can help you streamline and simplify your financial choices.


Final thoughts


The four methods we have described—choose your words carefully; harness the power of inertia; make good decision making easy; reduce the number of choices—can help you become the architect of your own financial life. None are complicated. As in many human endeavors, simplicity can be a powerful force in financial decision making. If we acknowledge that we are simply human, with limited time, energy and cognitive capacity, then we can design our decision-making environments to predictably influence our behaviors to have the best chance of reaching our financial goals.


The image shows three questions for the respondent to rank on a scale from strongly agree to strongly disagree.

1 Sunstein, Cass R., et al. Nudge: Improving Decisions About Health, Wealth, and Happiness. 2014.

2 McKenzie, Craig, et al. “Recommendations Implicit in Policy Defaults.” Psychological Science, 27 Sept. 2005,

3 Iyengar, Sheena. “How Much Choice Is Too Much?: Determinants of Individual Contributions in 401K Retirement Plans.”  In Pension Design and Structure: New Lessons from Behavioral Finance. Ed. O. S. Mitchell and S. P. Utkus. New York: Oxford University Press, 2004.