WEBVTT - Making Money Changes That Stick w/ Katy Milkman (Bestie) #855 0:00:00.240 --> 0:00:03.880 Hey, Joel, Happy Friday, buddy, see signor it's not Friday 0:00:03.880 --> 0:00:06.440 for us because we are actually recording this one ahead 0:00:06.440 --> 0:00:08.840 of signed. This is the best episode because you and 0:00:08.880 --> 0:00:12.600 I plus our lovely wives, plus our families, we're hanging 0:00:12.600 --> 0:00:15.160 out at the beach right about now that's fair. Yeah, 0:00:15.680 --> 0:00:17.000 I'm gonna do this. Whole thing is thank This is 0:00:17.000 --> 0:00:21.720 the entire episode, Espaniel, wait to stick to your guns. 0:00:22.160 --> 0:00:25.280 Now this We are so excited to bring you this episode. 0:00:25.280 --> 0:00:29.080 This is a conversation we had with Katie Milkman, who 0:00:29.160 --> 0:00:31.760 is I mean, she's basically a genius, but she wrote 0:00:31.760 --> 0:00:33.599 this book. What was the title of the book, How 0:00:33.640 --> 0:00:36.400 to You Change? How? Well, it's right, she's totally ripping 0:00:36.440 --> 0:00:38.920 off us over here at how the money We were first, Katy, 0:00:39.240 --> 0:00:41.879 that's our territory, something about the science of change, and 0:00:41.920 --> 0:00:45.320 she just addresses all of the different aspects of how 0:00:45.320 --> 0:00:47.519 it is that we can stick with the changes that 0:00:47.560 --> 0:00:48.720 we're looking to make in our lives. 0:00:48.720 --> 0:00:50.440 One of the coolest parts of this conversation, Matt. So 0:00:50.440 --> 0:00:53.360 many people are thinking about this January first, or leading 0:00:53.440 --> 0:00:55.320 up to January, which is when we originally aired the 0:00:55.320 --> 0:00:58.120 episode exactly exactly, and one of the things she says 0:00:58.240 --> 0:01:00.520 in this interview, which you're gonna stick around for, of course, 0:01:00.560 --> 0:01:04.000 because you're listing already, is that you don't have to 0:01:04.080 --> 0:01:07.679 do it wait till like some epic moment the beginning 0:01:07.680 --> 0:01:10.000 of the year. There are all these other ways you 0:01:10.000 --> 0:01:12.640 can attach to a change in your life. And guess 0:01:12.640 --> 0:01:14.520 what a big change for a lot of people coming up, Matt. 0:01:14.880 --> 0:01:16.720 There are schedules going to change as kids go back 0:01:16.720 --> 0:01:18.000 to school, stuff like that. I know it. 0:01:18.080 --> 0:01:20.160 My schedule is going to change that fall semester. Yeah. 0:01:20.160 --> 0:01:22.320 So if there's some habit that you want to stick, 0:01:22.640 --> 0:01:26.000 whether it's financially related, health related, whatever, that be attaching 0:01:26.040 --> 0:01:28.479 to this moment instead of waiting until January rolls around 0:01:28.520 --> 0:01:30.440 and hoping that that's the moment for you to make 0:01:30.480 --> 0:01:32.840 some sort of big impact on your life. I think 0:01:33.880 --> 0:01:36.320 I love this. She's kind of encouraging people to find 0:01:36.400 --> 0:01:39.039 another time in the year and another way to attach 0:01:39.080 --> 0:01:39.880 to the change you want to see. 0:01:39.920 --> 0:01:42.600 But it's still a meaningful date, right, Like I remember, 0:01:43.040 --> 0:01:44.280 I feel like we're giving away all the goods. But 0:01:44.319 --> 0:01:46.360 she was talking about like even choosing your birthday, Like 0:01:46.400 --> 0:01:48.880 folks who choose a date that means something to them 0:01:49.120 --> 0:01:51.400 that you're going to be more successful in implementing whatever 0:01:51.440 --> 0:01:53.400 change you're looking to make. So yeah, let's not give 0:01:53.440 --> 0:01:56.000 any giveaway any more goods without further ado, Let's hear 0:01:56.040 --> 0:01:58.880 from Katie Milkman. Woy no, Welcome to How to Money. 0:01:58.880 --> 0:02:02.000 I'm Joel and I Matt and today we're talking making 0:02:02.040 --> 0:02:04.920 money changes that stick with Katie Milkman. 0:02:24.720 --> 0:02:27.320 That's right, man, we are going to talk about how 0:02:27.400 --> 0:02:30.760 we can make positive money changes in twenty twenty three. 0:02:31.080 --> 0:02:34.240 And who better to have this conversation with than Katie Milkman, 0:02:34.680 --> 0:02:37.760 who is the author of How to Change the Science 0:02:37.840 --> 0:02:40.079 of Getting from where You Are to where You Want 0:02:40.120 --> 0:02:43.239 to be. Katie is a professor at the Wharton School 0:02:43.440 --> 0:02:47.000 of the University of Pennsylvania, where she explores ways that 0:02:47.240 --> 0:02:50.480 insights from economics and psychology how they can be harnessed 0:02:50.520 --> 0:02:56.160 to change consequential behaviors for good like exercise and vaccinations, 0:02:56.480 --> 0:02:59.760 but also behaviors like saving more money, which is what 0:02:59.840 --> 0:03:01.960 we or we are all about. True here on the show, 0:03:02.720 --> 0:03:05.840 She's advised organizations ranging from the White House to twenty 0:03:05.840 --> 0:03:08.919 four Hour Fitness. She writes everywhere as well her op 0:03:09.000 --> 0:03:12.080 eds up here in The Times and the economist, and 0:03:12.120 --> 0:03:14.000 we're just lucky to have her here with us today 0:03:14.040 --> 0:03:16.120 to talk about how you can make some of these 0:03:16.120 --> 0:03:18.519 money changes that stick. Katie, thank you so much for 0:03:18.600 --> 0:03:19.280 joining us today. 0:03:19.560 --> 0:03:21.440 Joel and Matt, thank you so much for having me. 0:03:22.000 --> 0:03:24.320 We are pumped to talk to you today, Katie. So 0:03:24.400 --> 0:03:28.000 much to discuss, especially since the dawn of a new year. There's, yeah, 0:03:28.040 --> 0:03:29.640 a lot of changes that we want to make, and 0:03:29.720 --> 0:03:31.400 our listeners of course are tuning in because they want 0:03:31.440 --> 0:03:34.120 to make money changes. And we're here kind of with 0:03:34.160 --> 0:03:36.440 the money advice, but you're here with hopefully the here's 0:03:36.440 --> 0:03:38.240 how you can continue to do it over a longer 0:03:38.280 --> 0:03:41.040 period of time advice. But the first question we ask 0:03:41.080 --> 0:03:44.120 anybody who comes on the show is what they like 0:03:44.160 --> 0:03:46.560 to sploire John and give us a little window into 0:03:46.600 --> 0:03:48.880 their world. And Matt and I we splorede on craft 0:03:48.880 --> 0:03:51.600 beer while we're saving and investing for the future. But 0:03:51.680 --> 0:03:53.760 what's that for you? What do you like to splore? 0:03:53.800 --> 0:03:54.000 John? 0:03:54.040 --> 0:03:56.000 And some people might think you're a little crazy for 0:03:56.040 --> 0:03:57.480 spending a lot of money in that one area. 0:03:57.880 --> 0:03:59.800 I don't know if anyone will think I'm crazy, but 0:03:59.880 --> 0:04:02.840 I like the splurge on vacations for sure. That's my 0:04:03.160 --> 0:04:04.000 that's my big one. 0:04:04.440 --> 0:04:06.640 That's not crazy at all. But I like the I 0:04:06.760 --> 0:04:07.280 like it though. 0:04:07.960 --> 0:04:11.000 Yeah, there's actually a lot of research showing that when 0:04:11.040 --> 0:04:15.880 we spend on experiences rather than just buying stuff, we 0:04:15.960 --> 0:04:17.920 get more out of it. So I try to follow 0:04:17.920 --> 0:04:22.360 the data and I take really nice vacations, very nice. 0:04:22.400 --> 0:04:24.719 So are you like a are you a quantity of 0:04:24.800 --> 0:04:27.000 vacations type of girl? Or like a quality? So do 0:04:27.040 --> 0:04:29.760 you go on like one day? Really? Okay? So so 0:04:29.960 --> 0:04:32.479 you go on fewer really nice vacations as opposed to 0:04:33.000 --> 0:04:34.200 more of them throughout the year. 0:04:34.520 --> 0:04:37.200 Yeah, Well, I would say I try to have a 0:04:37.200 --> 0:04:41.000 healthy number, but I think the splurge part is the quality. 0:04:41.520 --> 0:04:44.320 Okay, Our best vacation you've had recently, Well, I. 0:04:44.240 --> 0:04:46.640 Have a six and a half year old, so that 0:04:46.760 --> 0:04:49.279 limits the exotic travel I do these days. I used 0:04:49.279 --> 0:04:51.120 to go all over the world, but we had a 0:04:51.160 --> 0:04:57.360 really wonderful vacation to Hawaii this summer that was truly spectacular. 0:04:57.680 --> 0:05:00.279 Looking forward to maybe finally making that trip happen maybe 0:05:00.320 --> 0:05:01.839 this year. Jold. But we've got young kids too, so 0:05:01.880 --> 0:05:02.360 it's limited. 0:05:02.440 --> 0:05:02.520 Up. 0:05:02.640 --> 0:05:04.440 We're like, we're our kids are getting a little bit older, 0:05:04.440 --> 0:05:06.080 it feels like we can finally expand some of our 0:05:06.120 --> 0:05:07.040 destinations and to. 0:05:07.000 --> 0:05:10.480 Re equate myself with the world. Yeah, yes, right, Okay, 0:05:10.960 --> 0:05:14.080 So before we talk about how to go about making change, like, 0:05:14.120 --> 0:05:17.280 can we just talk about how sometimes folks feel unable 0:05:17.440 --> 0:05:19.960 to change? Like, what is it that's that's holding most 0:05:20.000 --> 0:05:23.400 folks back from believing that they just have the ability 0:05:23.400 --> 0:05:25.280 to make progress in their lives at all. 0:05:25.400 --> 0:05:27.520 Yeah, that's a great question. Well, first of all, I 0:05:27.520 --> 0:05:31.160 should say there are lots of very real external barriers 0:05:31.160 --> 0:05:31.640 to change. 0:05:31.720 --> 0:05:31.880 Right. 0:05:31.920 --> 0:05:35.559 You might feel like your budget is just too tight 0:05:35.600 --> 0:05:37.920 to make the changes you want, or you don't have 0:05:38.040 --> 0:05:40.760 the family support that you need to make the changes, 0:05:40.960 --> 0:05:45.280 or job stability. So there are very real external barriers 0:05:45.360 --> 0:05:48.640 that can block people. I don't study those. I actually 0:05:48.640 --> 0:05:51.039 study the internal barriers to change, and I think they're 0:05:51.080 --> 0:05:56.080 particularly fascinating because even when everything is lined up, which 0:05:56.279 --> 0:05:58.440 it rarely is, but even when everything is lined up 0:05:58.440 --> 0:06:02.239 in your favor outside, sometimes we're our own worst enemies. 0:06:02.839 --> 0:06:06.159 And the fascinating thing about the internal barriers to change 0:06:06.200 --> 0:06:10.240 is there's no one barrier. There's a laundry list, and 0:06:10.360 --> 0:06:12.880 some of us have multiple things we're fighting against. Some 0:06:12.960 --> 0:06:15.960 of us are just struggling with one. Diagnosing is really 0:06:16.000 --> 0:06:20.360 important to using the right solution. So barriers that are 0:06:20.400 --> 0:06:26.360 common include procrastination, a lack of confidence forgetting, which I 0:06:26.400 --> 0:06:28.680 think we overlook often. But if it doesn't get to 0:06:28.720 --> 0:06:30.719 the top of your priority list, if it's not top 0:06:30.760 --> 0:06:33.839 of mind, we often don't take the actions that are important. 0:06:34.440 --> 0:06:36.240 Habits can get in the way. We tend to be 0:06:36.279 --> 0:06:38.960 creatures of habit. We tend to take the path of 0:06:39.040 --> 0:06:43.840 least resistance, which is following those habits, and that can 0:06:43.880 --> 0:06:47.159 be a real barrier to change. So there are many 0:06:47.240 --> 0:06:52.800 many challenges, and depending on which one a given person 0:06:52.839 --> 0:06:55.200 is facing when they're trying to make a change, the 0:06:55.240 --> 0:06:59.440 solution that will be most well suited to help them 0:07:00.360 --> 0:07:00.840 is different. 0:07:01.520 --> 0:07:01.919 Yeah. 0:07:02.160 --> 0:07:04.960 Well, I will say forgetting used to be like at 0:07:05.000 --> 0:07:06.760 the top of the list for reasons I didn't get 0:07:06.760 --> 0:07:10.040 things done. And I swear Google Calendar has been a 0:07:10.080 --> 0:07:11.600 game changer for me in that regard, Like I get 0:07:11.600 --> 0:07:13.400 a lot more stuff done just because I'm better at 0:07:13.440 --> 0:07:15.320 putting stuff on the calendar to get it done. 0:07:15.440 --> 0:07:17.280 But man, nothing. 0:07:16.960 --> 0:07:18.840 Worked for me before that, and so I was just 0:07:18.920 --> 0:07:22.120 like a forgetful mess and Nikoff's nearly as much as 0:07:22.160 --> 0:07:22.800 I wanted to see that. 0:07:22.800 --> 0:07:24.000 It's definitely one thing. 0:07:24.000 --> 0:07:26.280 You're right that we don't put a give enough credit 0:07:26.480 --> 0:07:28.320 just so we're forgetting things because we're not putting them 0:07:28.320 --> 0:07:31.679 in front of ourselves. But what are the difference differences, Katie, 0:07:31.680 --> 0:07:34.760 between resolutions that we make and then the potential for 0:07:34.880 --> 0:07:37.160 lasting change, Because I don't know, something like this is 0:07:37.200 --> 0:07:38.920 a staff that gets quoted all the time, but there's 0:07:38.920 --> 0:07:41.720 something like eighty percent of people who don't actually follow 0:07:41.760 --> 0:07:44.120 through on the resolutions they make after a month or two. 0:07:44.440 --> 0:07:46.720 So we're in this period right now, with this fresh 0:07:46.720 --> 0:07:48.680 start period that you talk about, where a lot of 0:07:48.720 --> 0:07:52.120 people are ready willing and they're trying to move in 0:07:52.200 --> 0:07:55.200 the right direction when it comes to making change. But yeah, 0:07:55.240 --> 0:07:57.480 how do we make sure that it sticks around and 0:07:57.600 --> 0:08:00.000 isn't just a failed attempt a few weeks from now. 0:08:00.640 --> 0:08:02.840 Yeah, it's a great question. And as you know, this 0:08:02.920 --> 0:08:05.400 is sort of a magic moment. I've done research on 0:08:05.960 --> 0:08:09.360 what's called the fresh start effect phenomenon where at the 0:08:09.400 --> 0:08:12.600 start of new chapters in our lives, moments that feel 0:08:12.640 --> 0:08:14.600 like new beginnings, So the start of a new year 0:08:14.680 --> 0:08:17.160 being the best known, but there are many others actually 0:08:17.200 --> 0:08:22.360 as well. We pursue goals with extra vigor. But the 0:08:22.400 --> 0:08:25.680 funny thing about fresh starts is they're short lived, right, 0:08:25.720 --> 0:08:28.120 So they give you that little boost of motivation to 0:08:28.160 --> 0:08:32.760 begin something new, but a couple weeks pass and that's gone, 0:08:32.800 --> 0:08:34.760 and now you need something to carry you forward. And 0:08:34.760 --> 0:08:38.080 that's where a lot of folks fall flat. And I 0:08:38.120 --> 0:08:41.520 actually think one of the biggest issues is that people 0:08:41.559 --> 0:08:45.040 aren't strategic about how am I going to achieve this goal. 0:08:45.080 --> 0:08:46.240 They just say, oh, you know, I'm going to go 0:08:46.280 --> 0:08:48.680 to the gym this year, and I'll go now because 0:08:48.679 --> 0:08:51.200 I feel motivated, and then three weeks later they don't 0:08:51.200 --> 0:08:54.480 feel motivated anymore and everything falls apart. But an alternative 0:08:54.520 --> 0:08:57.840 way you could pursue a goal, and what research shows 0:08:57.920 --> 0:09:01.439 is better, is actually by following a bunch of best practices. 0:09:01.520 --> 0:09:05.560 So ideally, when you want to pursue a goal, first 0:09:05.559 --> 0:09:08.760 of all, you define a plan. And the plan isn't 0:09:08.800 --> 0:09:10.320 just I'm going to go to the gym once, right. 0:09:10.520 --> 0:09:13.520 The plan is I'd like to do this regularly for 0:09:13.640 --> 0:09:17.880 some hopefully very long term period of time. If it's 0:09:17.880 --> 0:09:20.520 about getting in shape, if it's about cutting back, you're 0:09:20.559 --> 0:09:24.000 spending whatever that is. Maybe you want to learn a 0:09:24.040 --> 0:09:27.000 new language this year. You don't want to just say 0:09:27.040 --> 0:09:29.240 I'm going to learn Spanish. You actually want to sit 0:09:29.240 --> 0:09:31.640 down and say, okay, how am I going to do it? Well, 0:09:31.840 --> 0:09:34.920 maybe those details look like saying it's going to be 0:09:34.960 --> 0:09:37.920 four hours a week that I spend on dual Lingo, 0:09:38.040 --> 0:09:40.320 and it's going to be Tuesday, Wednesday, Thursday, Friday at 0:09:40.320 --> 0:09:42.679 five pm right after work when I spend an hour 0:09:42.720 --> 0:09:45.640 on the app practicing, and I'm going to do that 0:09:45.960 --> 0:09:50.600 every week consistently. Now you're actually starting to see the 0:09:50.679 --> 0:09:54.040 groundwork for the kind of plan that might carry forward. 0:09:54.120 --> 0:09:57.120 Now that might sound boring, but actually breaking down a big, 0:09:57.240 --> 0:10:00.520 vague goal into bite sized pieces, whether it has to 0:10:00.520 --> 0:10:04.600 do with savings, volunteering exercise is one of the most 0:10:04.640 --> 0:10:08.480 important things you can do. And then figuring out when 0:10:08.480 --> 0:10:09.720 will I do it, where will I do it, how 0:10:09.760 --> 0:10:12.319 will I get it done? There's more to the magic 0:10:12.400 --> 0:10:14.920 as well. You have to make sure you won't forget 0:10:14.920 --> 0:10:17.880 so you can put it on your Google calendar. Ideally, 0:10:17.920 --> 0:10:21.840 you're thinking about accountability, so can you create consequences so 0:10:21.880 --> 0:10:23.960 that if you fail to follow through, it isn't just 0:10:24.000 --> 0:10:27.640 a shoulder shrug. But you're really gonna feel crummy about that. 0:10:28.240 --> 0:10:31.560 The more the consequence, the more likely it is that 0:10:31.880 --> 0:10:35.040 you won't procrastinate or give up on yourself. So you 0:10:35.080 --> 0:10:37.640 can actually put money on the line, for instance, that 0:10:37.720 --> 0:10:42.520 you agree you'll forfeit if you don't achieve a given goal. 0:10:42.600 --> 0:10:45.000 You can choose referees. There are some websites like stick 0:10:45.040 --> 0:10:47.199 dot com and bminder dot com which I am, i 0:10:47.200 --> 0:10:50.040 should say, unaffiliated with, just an admirer of their product, 0:10:50.400 --> 0:10:52.760 that allow you to do things like that. And research 0:10:52.760 --> 0:10:56.200 shows that when you use these so called commitment devices, 0:10:56.280 --> 0:10:59.760 basically penalizing yourself for future failures to fall through on 0:10:59.760 --> 0:11:03.760 your you dramatically increase the likelihood of success. Because nobody's 0:11:04.440 --> 0:11:07.200 nobody likes a fine. So those are a bunch of 0:11:07.240 --> 0:11:09.560 strategies you can take, and there's more we could get into, 0:11:09.640 --> 0:11:13.560 depending on what other obstacles you foresee, like making sure 0:11:13.600 --> 0:11:15.600 you enjoy the way you're pursuing the goal and so on. 0:11:15.679 --> 0:11:17.920 But that's a pretty good groundwork. 0:11:18.520 --> 0:11:20.920 Yeah, absolutely, Like you kind of just you give just 0:11:20.920 --> 0:11:23.880 like a little sampler platter of a lot of different 0:11:23.960 --> 0:11:27.000 strategies that you talk about in your book. But essentially, 0:11:27.000 --> 0:11:29.559 I mean, all of these things can lead an individual 0:11:29.640 --> 0:11:33.240 to create processes that work for them, and which makes 0:11:33.280 --> 0:11:35.000 me think of like my favorite new quote, which is 0:11:35.520 --> 0:11:39.240 process saves us from the poverty of our intentions, which 0:11:39.240 --> 0:11:40.560 I heard recently, and I was just like, man, that 0:11:40.640 --> 0:11:42.920 is so stinking good. But that's what all of this does. 0:11:42.960 --> 0:11:44.480 It's about creating this plan. 0:11:44.320 --> 0:11:47.360 Because we've all got these idealized intentions at this point 0:11:47.400 --> 0:11:48.960 in the year where it's like, of course I'm going 0:11:49.000 --> 0:11:51.040 to do this, like everyone has goals. I just turned 0:11:51.080 --> 0:11:52.400 over a new leaf. But if you don't have the 0:11:52.400 --> 0:11:55.120 processes to back that up, then inevitably it's going to 0:11:55.160 --> 0:11:56.520 fall flat for most folks, right. 0:11:56.679 --> 0:12:01.040 That's exactly right, And unfortunately, too often we aren't focused 0:12:01.040 --> 0:12:04.360 on those processes. We're just focused on that short burst 0:12:04.360 --> 0:12:06.880 of motivation and we imagine and it will carry us 0:12:06.880 --> 0:12:08.960 forward and we'll have no problems. But once you start 0:12:09.000 --> 0:12:12.520 recognizing no, there are barriers to success and to maintenance, 0:12:13.080 --> 0:12:15.319 and starting to set yourself up so that you can 0:12:15.360 --> 0:12:17.520 overcome them, you start seeing better results. 0:12:18.040 --> 0:12:20.840 And of course everyone resolutions get made at the beginning 0:12:20.880 --> 0:12:22.760 of the year, and so I feel like that's when 0:12:22.760 --> 0:12:25.080 that's a little more natural for a lot of folks. 0:12:25.120 --> 0:12:27.719 But in your book you also talk about how there 0:12:27.760 --> 0:12:32.000 are different life events that can occur that folks can 0:12:32.080 --> 0:12:34.880 maybe take advantage of. Can you talk through maybe some 0:12:34.920 --> 0:12:38.600 different examples of maybe even disruptive life events that folks 0:12:38.600 --> 0:12:42.160 are able to use to their advantage to basically put 0:12:42.200 --> 0:12:44.880 them on this path towards a new fresh start for them. Yeah. 0:12:44.960 --> 0:12:47.559 Absolutely, Well. One of the really interesting things about the 0:12:47.600 --> 0:12:49.640 way we think about time and the way we think 0:12:49.679 --> 0:12:53.119 about our lives is that we don't perceive it linearly. 0:12:53.559 --> 0:12:56.840 We actually think about ourselves like we're characters in a book, 0:12:57.280 --> 0:13:00.640 and our life is divided into chapters, and there are 0:13:00.960 --> 0:13:04.800 big chapters, and there are short chapters. There's even you know, 0:13:05.600 --> 0:13:10.400 subsections of chapters. Every time something happens that feels like 0:13:10.440 --> 0:13:13.640 a book ends a chapter or a section of our life, 0:13:14.200 --> 0:13:17.000 we feel this sense of discontinuity. So think about, you know, 0:13:17.080 --> 0:13:20.320 moving to a new city, and you could think about, 0:13:20.320 --> 0:13:22.520 you know, the years you maybe were in college or 0:13:22.559 --> 0:13:25.120 working at a certain employer. Those are sort of chapters 0:13:25.160 --> 0:13:27.880 in your life. Or a year is also a major 0:13:27.960 --> 0:13:30.800 chapter marker for many people in their lives, which is 0:13:30.840 --> 0:13:32.840 part of why new year's feels like a fresh start. 0:13:32.880 --> 0:13:35.120 And whenever we cross one of those boundaries to close 0:13:35.200 --> 0:13:37.679 one chapter and open another, we have a sense that 0:13:37.760 --> 0:13:41.480 we are further apart from our past self. Whatever you know, 0:13:41.760 --> 0:13:43.880 I didn't get done last year. Last year, I meant 0:13:43.880 --> 0:13:48.120 to get in shape, or I meant to get my 0:13:48.200 --> 0:13:54.000 portfolio under control and diversify better. Whatever it was, I 0:13:54.040 --> 0:13:56.000 didn't do it yet. But that was the old me, 0:13:56.240 --> 0:13:57.640 and this is the new me, and the new me's 0:13:57.640 --> 0:13:59.719 going to be different. So that discontinuity can be really 0:13:59.720 --> 0:14:03.240 predictive for anything where you haven't already achieved the goal 0:14:03.480 --> 0:14:06.600 and maybe you were feeling a little sad about it, 0:14:06.640 --> 0:14:09.080 and now you can say, well, you know, that was 0:14:09.080 --> 0:14:12.040 the past and this is going to be different. It 0:14:12.080 --> 0:14:13.839 also tends to lead us a step back and think 0:14:13.880 --> 0:14:17.160 big picture about our lives. So we have shown that 0:14:17.240 --> 0:14:22.760 this happens not just with things that you might expect 0:14:22.760 --> 0:14:25.400 to be momentous, like a real physical change. You have 0:14:25.440 --> 0:14:28.720 a new job or a new house, or a new 0:14:28.720 --> 0:14:32.560 community or a new role of some kind. Right, there's 0:14:32.600 --> 0:14:35.360 actually really wonderful past research by Wendy Wood at the 0:14:35.440 --> 0:14:38.280 University of Southern California looking at these life disruptions and 0:14:38.320 --> 0:14:40.600 how they can break up our habits. But we've shown 0:14:40.640 --> 0:14:43.440 that even trivial events on the calendar that truly do 0:14:43.560 --> 0:14:49.720 not matter, and they create the same psychological and choice 0:14:49.720 --> 0:14:53.120 effects where we pursue goals with greater vigor. So the 0:14:53.160 --> 0:14:56.160 start of a new week is a minor fresh start. 0:14:56.440 --> 0:14:58.240 We already talked about New Year's that's the big one 0:14:58.240 --> 0:14:59.920 we're all familiar with, but the start of a new month, 0:15:00.480 --> 0:15:03.360 sometimes the celebration of spring, especially with drawn to your attention, 0:15:03.480 --> 0:15:05.440 the start of spring feels like a new beginning, the 0:15:05.480 --> 0:15:08.560 celebration of a birthday, and there are many minor holidays 0:15:09.120 --> 0:15:11.240 that feel like fresh starts to people, so think more 0:15:11.280 --> 0:15:14.520 Labor Day and less Valentine's Day. And different religions have 0:15:14.560 --> 0:15:17.720 different holidays that signal a fresh start for people who 0:15:17.760 --> 0:15:20.760 practice in that religion. So all these fresh start dates, 0:15:21.120 --> 0:15:24.480 when we sort of look at data, have this incredible 0:15:24.600 --> 0:15:29.480 ability to increase just naturally how much people are doing 0:15:29.480 --> 0:15:32.000 things like searching for the term diet on Google, or 0:15:32.080 --> 0:15:35.360 visiting the gym, or setting goals on popular goal setting 0:15:35.400 --> 0:15:38.200 websites about everything from their health to their finances to 0:15:38.240 --> 0:15:43.000 their education. And we have also done experiments where we 0:15:43.080 --> 0:15:46.720 show that by highlighting fresh start dates that people might 0:15:46.760 --> 0:15:50.240 not otherwise be attending to, we can get people to 0:15:50.280 --> 0:15:54.000 pursue their goals more aggressively. So my favorite experiment involved 0:15:54.320 --> 0:15:56.720 trying to get more people to sign up for a 0:15:56.800 --> 0:16:01.080 retirement savings account with their employer that was text beneficial. 0:16:01.120 --> 0:16:02.520 It was a four oh three B at a four 0:16:02.520 --> 0:16:04.560 oh one K, which is probably the most familiar, but 0:16:04.760 --> 0:16:08.840 this was with universe at that I do, so I 0:16:08.840 --> 0:16:11.560 thought I could throw out some of that that fun stuff. 0:16:12.080 --> 0:16:16.720 So we partnered with four universities that had four or 0:16:16.760 --> 0:16:20.040 three B plans and we sent out mailings to employees 0:16:20.080 --> 0:16:23.880 who were not yet saving at the sort of match threshold, 0:16:23.920 --> 0:16:26.200 so they weren't taking advantage of all of their employeer 0:16:26.320 --> 0:16:28.480 benefits or weren't saving at all. In fact, most weren't 0:16:28.520 --> 0:16:31.080 saving at all, and we invited them to start saving, 0:16:31.080 --> 0:16:34.000 either right away or in the future, because we know 0:16:34.080 --> 0:16:36.680 a lot of people would want to put off that 0:16:36.880 --> 0:16:40.000 decision to start saving from past research. And what we 0:16:40.120 --> 0:16:42.080 varied is whether or not the date in the future 0:16:42.120 --> 0:16:44.320 when we invited people to begin saving, we said, we'll 0:16:44.360 --> 0:16:46.600 take care of it. Just mail back this postcard if 0:16:46.640 --> 0:16:49.080 that date in the future aligned with a fresh start 0:16:49.160 --> 0:16:52.200 and was described in that way, or if it aligned 0:16:52.200 --> 0:16:53.960 with a fresh start but wasn't described so to be 0:16:54.000 --> 0:16:56.640 really specific, imagine your birthday's coming up in two months 0:16:56.920 --> 0:16:58.880 and you're in this experiment. We would flip a coin 0:16:58.960 --> 0:17:01.080 and the coin toss would determine whether you got a 0:17:01.160 --> 0:17:03.360 version of the mailing that invited you to start saving 0:17:03.640 --> 0:17:07.800 after your upcoming birthday or in two months. Now, they're 0:17:07.840 --> 0:17:11.919 literally identical, but in one case we are highlighting an 0:17:12.000 --> 0:17:15.119 upcoming fresh start as the opportunity. So we tried this 0:17:15.200 --> 0:17:17.159 with birthdays, we tried it with a start of spring, 0:17:17.880 --> 0:17:19.880 and what we see is that inviting people to begin 0:17:19.960 --> 0:17:23.320 saving after a fresh start date and like literally calling 0:17:23.359 --> 0:17:26.600 it out as such leads to twenty to thirty percent 0:17:26.640 --> 0:17:31.000 more savings and the following eight months than a literally 0:17:31.040 --> 0:17:35.480 identical invitation to save that doesn't name the fresh start date. 0:17:35.640 --> 0:17:37.360 That's a significant increase. 0:17:37.880 --> 0:17:39.119 Yeah, it's pretty exciting. 0:17:39.680 --> 0:17:42.879 Humans are odd beings, right that we respond differently that, 0:17:42.920 --> 0:17:44.919 But it's cool to see that that's the case, and 0:17:44.960 --> 0:17:48.240 then you can tailor your marketing accordingly to help people 0:17:48.320 --> 0:17:52.240 make better decisions. And I'm curious to you write about Katie, 0:17:52.320 --> 0:17:54.840 you performed a lot of research that shows that we 0:17:54.920 --> 0:17:57.439 underestimate the discipline needed to make change in our lives, 0:17:57.600 --> 0:17:59.119 but that there are ways that we can make it 0:17:59.320 --> 0:18:01.359 more fun. And so, yeah, can you talk about that, 0:18:01.400 --> 0:18:04.000 because sometimes there are If we can make it more fun, 0:18:04.000 --> 0:18:05.159 we're more likely to stick to it. 0:18:05.720 --> 0:18:08.680 Yeah, this is a huge insight and in I think 0:18:08.720 --> 0:18:11.080 the best research on this comes from islet Fishbucket the 0:18:11.160 --> 0:18:13.760 University of Chicago and Caitlin Woollie at Cornell, who showed 0:18:14.119 --> 0:18:16.600 most of us, when we're left to our own devices, 0:18:16.680 --> 0:18:18.840 think the best way to pursue our goals is just 0:18:18.880 --> 0:18:21.479 to look for the most direct path to success and 0:18:21.560 --> 0:18:25.240 follow it. So let's take the example of getting in shape. 0:18:25.480 --> 0:18:28.679 What's the maximumly efficient workout machine that will create the 0:18:28.720 --> 0:18:31.679 most pain and sort of benefits per minute. You're like, 0:18:31.760 --> 0:18:33.119 I'm going to get on that if I want to 0:18:33.119 --> 0:18:33.720 get in shape. 0:18:33.800 --> 0:18:37.320 Yeah, it means I'm going to start running right this minute. Yeah, exactly, Yes, 0:18:37.560 --> 0:18:38.240 regardless of the. 0:18:38.240 --> 0:18:41.080 Weather, failing your arms, carrying weights, you know, to all 0:18:41.080 --> 0:18:45.040 the things that are hard. A small minority of people, though, 0:18:45.080 --> 0:18:46.760 pursue their goals a different way, which is that they 0:18:46.800 --> 0:18:50.000 actually look for a fun way to achieve that goal 0:18:50.040 --> 0:18:52.160 of say, getting in shape, so that that person might 0:18:52.359 --> 0:18:55.439 go to zoomba classes with a friend instead of getting 0:18:55.480 --> 0:18:59.879 on the punishing staremaster. And what's really interesting is that 0:19:01.200 --> 0:19:04.560 the folks who into it they should find a fun 0:19:04.560 --> 0:19:06.520 way to pursue their goals, they're actually the ones that 0:19:06.560 --> 0:19:09.320 have it right. And randomize control trials where people are 0:19:09.359 --> 0:19:11.479 either encouraged to pursue their goals in ways that are 0:19:11.520 --> 0:19:14.679 fun or in ways that are maximumly efficient. The people 0:19:14.800 --> 0:19:17.119 encouraged to pursue goals in ways that are fun are 0:19:17.160 --> 0:19:19.879