WEBVTT - Making Money Changes That Stick with Katy Milkman #613 0:00:00.040 --> 0:00:02.840 Welcome to How the Money. I'm Joel and I am Matt, 0:00:02.880 --> 0:00:06.320 and today we're talking making money changes that stick with 0:00:06.519 --> 0:00:28.880 Katie Milkman. That's right, man, We are going to talk 0:00:28.920 --> 0:00:33.160 about how we can make positive money changes in three 0:00:33.440 --> 0:00:36.599 and who better to have this conversation with than Katie Milkman, 0:00:37.040 --> 0:00:40.080 who is the author of How to Change the Science 0:00:40.200 --> 0:00:42.400 of Getting from where You Are to where You Want 0:00:42.479 --> 0:00:45.600 to be. Katie is a professor at the Wharton School 0:00:45.840 --> 0:00:49.319 of the University of Pennsylvania, where she explores ways that 0:00:49.560 --> 0:00:52.800 insights from economics and psychology how they can be harnessed 0:00:52.840 --> 0:00:58.480 to change consequential behaviors for good like exercise and vaccinations, 0:00:58.800 --> 0:01:02.360 but also behaviors saving more money, which is what we 0:01:02.400 --> 0:01:05.319 are we are all about here on the show. She's 0:01:05.360 --> 0:01:08.360 advised organizations ranging from the White House to twenty four 0:01:08.400 --> 0:01:11.520 Hour Fitness. She writes everywhere as well. Her op eds 0:01:11.520 --> 0:01:14.680 appear in The Times, uh and The Economist, and we're 0:01:14.680 --> 0:01:16.440 just lucky to have her here with us today to 0:01:16.480 --> 0:01:18.720 talk about how you can make some of these money 0:01:18.760 --> 0:01:21.199 changes that stick. Katie, thank you so much for joining 0:01:21.240 --> 0:01:23.360 us today. Joel and Matt, thank you so much for 0:01:23.400 --> 0:01:26.600 having me. We are pumped to talk to you today, Katie. 0:01:26.640 --> 0:01:29.000 So much to discuss, specially since the dawn of a 0:01:29.040 --> 0:01:31.600 new year. There's a lot of changes that we want 0:01:31.600 --> 0:01:33.280 to make, and our listeners of course are tuning in 0:01:33.280 --> 0:01:35.880 because they want to make money changes. But and we're 0:01:35.920 --> 0:01:37.640 here kind of with the money advice, but you're here 0:01:37.640 --> 0:01:39.880 with hopefully the here's how you can continue to do 0:01:39.920 --> 0:01:42.320 it over a longer period of time advice. But um, 0:01:42.520 --> 0:01:44.800 the first question we ask anybody who comes on the 0:01:44.880 --> 0:01:47.319 show is what they like to sport John and give 0:01:47.360 --> 0:01:50.240 us a little window into their world. And Matt and 0:01:50.240 --> 0:01:52.600 I we sported on craft beer while we're saving and 0:01:52.600 --> 0:01:54.920 investing for the future. But what's that for you? What 0:01:54.960 --> 0:01:57.000 do you like to spot? John? And some people might 0:01:57.040 --> 0:01:58.960 think here a little crazy for spending a lot of 0:01:58.960 --> 0:02:00.960 money in that one area. I don't know if anyone 0:02:00.960 --> 0:02:04.000 will think I'm crazy, But I like to splurge on vacations, 0:02:04.160 --> 0:02:07.120 for sure. That's my that's my big one. That's not 0:02:07.160 --> 0:02:10.760 crazy at all. But I like the I like it though. Yeah, 0:02:10.880 --> 0:02:13.480 there's actually a lot of research showing that when we 0:02:13.520 --> 0:02:18.480 spend on experiences rather than just buying stuff, we get 0:02:18.480 --> 0:02:20.720 more out of it. So I try to follow the data, 0:02:21.040 --> 0:02:24.960 and I take really nice vacations, very nice. So are 0:02:25.000 --> 0:02:27.880 you like a are you a quantity of vacations type 0:02:27.919 --> 0:02:29.560 of girl or like a quality? So do you go 0:02:29.600 --> 0:02:32.640 on like one really okay? So so you go on 0:02:32.680 --> 0:02:35.919 fewer really nice vacations as opposed to more of them 0:02:35.960 --> 0:02:38.800 throughout the year. Yeah, I will. I would say I 0:02:38.880 --> 0:02:41.360 try to have a healthy number. But I think the 0:02:41.440 --> 0:02:46.480 splurge part is the quality. Our best vacation you've had recently? Well, 0:02:46.520 --> 0:02:48.600 I have a six and a half year old, so 0:02:48.880 --> 0:02:51.360 that limits the exotic travel I do these days. I 0:02:51.440 --> 0:02:53.320 used to go all over the world, but we had 0:02:53.360 --> 0:02:57.640 a really wonderful vacation to Hawaii, um this summer that 0:02:57.720 --> 0:03:01.560 was truly spectacular. Looking forward to maybe finally making that 0:03:01.560 --> 0:03:04.120 trip happen maybe this year. We've got young kids too, 0:03:04.120 --> 0:03:05.840 so it's limited up and we're like where our kids 0:03:05.880 --> 0:03:07.240 are getting a little bit older, it feels like we 0:03:07.240 --> 0:03:09.760 can finally expand some of our destinations and to requate 0:03:09.760 --> 0:03:14.359 myself with the world. Yeah. Right, So before we talk 0:03:14.400 --> 0:03:16.680 about how to go about making change, like, can we 0:03:16.720 --> 0:03:21.080 just talk about how sometimes folks feel unable to change? Um, Like, 0:03:21.120 --> 0:03:23.200 what is it that's that's holding most folks back from 0:03:23.440 --> 0:03:26.320 believing that they just have the ability to to make 0:03:26.480 --> 0:03:29.280 progress in their lives at all. Yeah, that's a great question. Well, 0:03:29.440 --> 0:03:31.000 first of all, I should say there are lots of 0:03:31.680 --> 0:03:35.360 very real external barriers to change. Right. You might feel 0:03:35.400 --> 0:03:38.360 like your budget is just too tight to make the 0:03:38.440 --> 0:03:41.560 changes you want, or you don't have a family support 0:03:41.680 --> 0:03:45.200 that you need to make the changes, or um job stability. 0:03:45.280 --> 0:03:48.800 So there are very real external barriers that can block people. 0:03:49.120 --> 0:03:52.400 I don't study those. I actually study the internal barriers 0:03:52.440 --> 0:03:56.160 to change, and I think they're particularly fascinating because even 0:03:56.240 --> 0:03:59.400 when everything is lined up, which it rarely is, but 0:03:59.480 --> 0:04:03.280 even whenever reathings lined up in your favor outside, sometimes 0:04:03.280 --> 0:04:07.160 we're our own worst enemies. And the fascinating thing about 0:04:07.160 --> 0:04:10.440 the internal barriers to change is there's no one barrier. 0:04:10.640 --> 0:04:13.400 There's there's a laundry list, and some of us have 0:04:13.560 --> 0:04:15.800 multiple things we're fighting against. Some of us are just 0:04:15.800 --> 0:04:20.080 struggling with one. Diagnosing is really important to using the 0:04:20.160 --> 0:04:26.440 right solution. So barriers that are common include procrastination, lack 0:04:26.480 --> 0:04:30.200 of confidence forgetting, which I think we overlook often. But 0:04:30.240 --> 0:04:32.400 if it doesn't get to the top of your priority list, 0:04:32.400 --> 0:04:34.839 if it's not top of mind. We often don't take 0:04:34.880 --> 0:04:38.000 the actions that are important. Habits can get in the way. 0:04:38.120 --> 0:04:40.640 We tend to be creatures of habit. We tend to 0:04:40.680 --> 0:04:43.920 take the path of least resistance, um, which is, you know, 0:04:43.960 --> 0:04:46.640 following those those habits, and that can be a real 0:04:46.680 --> 0:04:51.359 barrier to change. So there are many many challenges, uh, 0:04:51.400 --> 0:04:55.680 And depending on which one a given person is facing 0:04:55.680 --> 0:04:59.000 when they're trying to make a change, the solution that 0:04:59.080 --> 0:05:04.400 will be most well suited to help them it is different. Yeah, 0:05:04.520 --> 0:05:07.320 what I will say forgetting used to be like at 0:05:07.320 --> 0:05:09.120 the top of the list for reasons I didn't get 0:05:09.160 --> 0:05:12.440 things done. And I swear Google Calendar has been a 0:05:12.440 --> 0:05:13.960 game changer for me in that regard, Like I get 0:05:13.960 --> 0:05:15.760 a lot more stuff done just because I'm better at 0:05:15.800 --> 0:05:18.400 putting stuff on the calendar to get it done. But man, 0:05:18.839 --> 0:05:21.000 nothing worked for me before that, and so I was 0:05:21.080 --> 0:05:24.159 just like a forgetful mess and the compus nearly as 0:05:24.240 --> 0:05:26.159 much as I wanted to. So that it's definitely one 0:05:26.200 --> 0:05:28.280 thing You're right that we don't put a give enough 0:05:28.279 --> 0:05:30.559 credit just so we're forgetting things because we're not putting 0:05:30.560 --> 0:05:34.039 them in front of ourselves. But one of the difference differences, Katie, 0:05:34.040 --> 0:05:37.120 between resolutions that we make and then the potential for 0:05:37.240 --> 0:05:39.560 lasting change, because I don't know, something like this is 0:05:39.560 --> 0:05:41.279 the staff that gets quoted all the time, but there's 0:05:41.320 --> 0:05:44.040 something like eight percent of people who don't actually follow 0:05:44.120 --> 0:05:46.520 through on the resolutions they make after a month or two. 0:05:46.800 --> 0:05:49.039 So we're in this period right now, with this fresh 0:05:49.040 --> 0:05:51.039 start period that you talk about, where a lot of 0:05:51.040 --> 0:05:54.520 people are ready willing and they're trying to move in 0:05:54.520 --> 0:05:57.440 the right direction when it comes to making change. But yeah, 0:05:57.560 --> 0:05:59.800 how do we make sure that it sticks around and 0:06:00.040 --> 0:06:03.200 isn't just a failed attempt a few weeks from now. Yeah, 0:06:03.240 --> 0:06:05.320 it's a great question. And as you know, this is 0:06:05.360 --> 0:06:08.559 sort of a magic moment. I've done research on what's 0:06:08.600 --> 0:06:12.039 called the fresh start effect phenomenon, where at the start 0:06:12.040 --> 0:06:14.960 of um new chapters in our lives, moments that feel 0:06:15.000 --> 0:06:17.000 like new beginnings, So the start of a new year 0:06:17.040 --> 0:06:19.520 being the best known, but there are many others actually 0:06:19.520 --> 0:06:24.720 as well. We pursue goals with extra vigor. But the 0:06:24.720 --> 0:06:28.040 funny thing about fresh starts is they're short lived, right, 0:06:28.040 --> 0:06:30.440 So they give you that little boost of motivation to 0:06:30.520 --> 0:06:34.040 begin something new, but a couple of weeks pass and 0:06:34.440 --> 0:06:37.000 that's gone, and now you need something to carry you forward. 0:06:37.000 --> 0:06:40.280 And that's where a lot of folks fall flat. And 0:06:40.320 --> 0:06:43.440 I actually think one of the biggest issues is that 0:06:43.520 --> 0:06:47.080 people aren't strategic about how am I going to achieve 0:06:47.080 --> 0:06:48.400 this school. They just say, oh, you know, I'm going 0:06:48.440 --> 0:06:50.520 to go to the gym this year, and I'll go 0:06:50.600 --> 0:06:53.080 now because I feel motivated, And then three weeks later 0:06:53.200 --> 0:06:56.000 they don't feel motivated anymore and everything falls apart. But 0:06:56.080 --> 0:06:59.320 an alternative way you could pursue a goal, and what 0:06:59.400 --> 0:07:02.880 research is better is actually by um following a bunch 0:07:02.920 --> 0:07:06.600 of best practices. So ideally, when you want to pursue 0:07:06.600 --> 0:07:10.480 a goal, first of all, you define a plan. And 0:07:10.480 --> 0:07:11.880 the plan isn't just I'm going to go to the 0:07:11.880 --> 0:07:14.840 gym once, right. The plan is I'd like to do 0:07:14.880 --> 0:07:19.760 this regularly for some hopefully very long term period of time. 0:07:19.880 --> 0:07:22.200 If it's about getting in shape, if it's about um 0:07:22.200 --> 0:07:25.720 cutting back you're spending, whatever that is. Maybe you want 0:07:25.760 --> 0:07:28.720 to learn a new language this year. UM, you don't 0:07:28.720 --> 0:07:31.200 want to just say I'm gonna learn Spanish. You actually 0:07:31.200 --> 0:07:32.760 want to sit down and say, okay, how am I 0:07:32.760 --> 0:07:36.440 going to do it? Well, maybe those details look like 0:07:36.520 --> 0:07:38.400 saying it's going to be four hours a week that 0:07:38.480 --> 0:07:42.200 I spend on dual Lingo, and it's going to be Tuesday, Wednesday, Thursday, 0:07:42.200 --> 0:07:44.560 Friday at five pm right after work when I spend 0:07:44.600 --> 0:07:47.560 an hour on the app practicing uh, and I'm going 0:07:47.600 --> 0:07:51.440 to do that every week consistently. Now you're actually starting 0:07:51.480 --> 0:07:55.480 to um see the groundwork for the kind of plan 0:07:55.560 --> 0:07:57.800 that might carry for it. Now that might sound boring, 0:07:57.840 --> 0:08:01.880 but actually breaking down a big vague into bite sized pieces, 0:08:02.080 --> 0:08:06.360 whether it has to do with savings, volunteering exercise is 0:08:06.400 --> 0:08:09.160 one of the most important things you can do. And 0:08:09.200 --> 0:08:11.640 then figuring out when will I do it, where will 0:08:11.640 --> 0:08:13.440 I do it, how will I get it done? There's 0:08:13.480 --> 0:08:15.800 more to the magic as well. You have to make 0:08:15.800 --> 0:08:17.920 sure you won't forget so you can put it on 0:08:17.960 --> 0:08:22.040 your Google calendar. Um. Ideally you're thinking about accountability, So 0:08:22.440 --> 0:08:24.960 can you create consequences so that if you fail to 0:08:25.000 --> 0:08:28.080 follow through, it isn't just a shoulder shrug, but you're 0:08:28.120 --> 0:08:32.520 really gonna feel crummy about that. Um. The more the consequence, 0:08:32.559 --> 0:08:35.640 the more likely it is that you won't procrastinate or 0:08:35.720 --> 0:08:38.720 give up on yourself, so you can actually put money 0:08:38.720 --> 0:08:41.160 on the line for instance, that you agree will forfeit 0:08:41.320 --> 0:08:45.480 if you don't achieve a given goal. You can choose 0:08:45.480 --> 0:08:48.280 referees or some websites like stick dot com and be 0:08:48.400 --> 0:08:50.640 minder dot com which I am i should say, unaffiliated 0:08:50.679 --> 0:08:53.360 with just an admire of their product, that allow you 0:08:53.440 --> 0:08:56.080 to do things like that. And research shows that when 0:08:56.120 --> 0:09:00.200 you use these so called commitment devices basically penalize seeing 0:09:00.240 --> 0:09:02.600 yourself for future failures to fall throw on your goals, 0:09:02.640 --> 0:09:07.199 you dramatically increase the likelihood of success. Because nobody's nobody 0:09:07.440 --> 0:09:10.240 likes a fine. So those are a bunch of strategies 0:09:10.240 --> 0:09:11.920 you can take, and there's more we could get into, 0:09:11.960 --> 0:09:15.920 depending on what other obstacles you foresee, like making sure 0:09:15.960 --> 0:09:17.920 you enjoy the way you're pursuing the goal and so on. 0:09:18.000 --> 0:09:21.880 But that's a pretty good groundwork. Yeah, absolutely, like you 0:09:21.960 --> 0:09:23.600 kind of just you give it's just like a little 0:09:23.600 --> 0:09:27.079 sampler platter of a lot of different strategies that you 0:09:27.160 --> 0:09:29.920 talk about your book. Um. But essentially, I mean, all 0:09:29.920 --> 0:09:33.880 of these things can lead an individual to create processes 0:09:33.920 --> 0:09:36.000 that work for them and which makes me think of 0:09:36.040 --> 0:09:38.840 like my favorite new quote, which is process saves us 0:09:38.880 --> 0:09:42.199 from the poverty of our intentions, which I heard recently. 0:09:42.280 --> 0:09:44.000 I was just like, man, that is so stink and good. 0:09:44.280 --> 0:09:46.200 But that's what all of this does. It's about creating 0:09:46.200 --> 0:09:49.280 this plan because we've all got these idealized intentions at 0:09:49.280 --> 0:09:51.000 this point in the year where it's like, of course 0:09:51.040 --> 0:09:53.120 I'm gonna do this, like everyone has goals. I just 0:09:53.160 --> 0:09:54.640 turned over a new leaf. But if you don't have 0:09:54.679 --> 0:09:57.480 the processes to back that up, then inevitably it's gonna 0:09:57.480 --> 0:10:01.160 fall flat for most folks, right, That's exactly right, And unfortunately, 0:10:01.920 --> 0:10:04.800 too often we aren't focused on those processes. We're just 0:10:04.880 --> 0:10:08.400 focused on that short burst of motivation and we imagine 0:10:08.440 --> 0:10:10.520 it will carry us for it and we'll have no problems. 0:10:10.559 --> 0:10:13.360 But once you start recognizing no, there are barriers to 0:10:13.400 --> 0:10:16.520 success and to maintenance um and starting to set yourself 0:10:16.600 --> 0:10:19.200 up so that you can overcome them, you start seeing 0:10:19.240 --> 0:10:22.800 better results. And of course everyone resolutions get made at 0:10:22.800 --> 0:10:24.800 the beginning of the year, and so I feel like 0:10:24.840 --> 0:10:26.960 that's one that's a little more natural for for a 0:10:26.960 --> 0:10:28.760 lot of folks. But in your book you also talk 0:10:28.840 --> 0:10:32.200 about how there are different life events that can occur 0:10:32.760 --> 0:10:36.640 that folks can maybe take advantage of. Can you talk 0:10:36.679 --> 0:10:40.120 through maybe some different examples of maybe even disruptive life 0:10:40.160 --> 0:10:41.960 events that that folks are able to use to their 0:10:42.000 --> 0:10:45.720 advantage to basically put them on this path towards a 0:10:45.720 --> 0:10:48.200 new fresh start for them. Yeah. Absolutely, Well. One of 0:10:48.240 --> 0:10:50.840 the really interesting things about the way we think about 0:10:51.000 --> 0:10:53.040 time and the way we think about our lives is 0:10:53.080 --> 0:10:57.280 that we don't perceive it linearly. We actually think about 0:10:57.280 --> 0:11:00.600 ourselves like we're characters in a book. And um, our 0:11:00.640 --> 0:11:04.400 life is divided into chapters, and there are big chapters, 0:11:04.480 --> 0:11:08.600 and there are short chapters. There's even you know, subsections 0:11:08.640 --> 0:11:12.720 of chapters. Every time, um, something happens that feels like 0:11:12.760 --> 0:11:16.440 a book ends a chapter or a section of our life, UM, 0:11:16.520 --> 0:11:19.320 we feel this sense of discontinuity. So think about, you know, 0:11:19.400 --> 0:11:22.640 moving to a new city, and you could think about, 0:11:22.679 --> 0:11:24.880 you know, the years you maybe were in college or 0:11:24.880 --> 0:11:27.520 working at a certain employer. Those are sort of chapters 0:11:27.520 --> 0:11:30.199 in your life. Or a year is also a major 0:11:30.320 --> 0:11:33.120 chapter marker for many people in their lives, which is 0:11:33.160 --> 0:11:35.200 part of why New Year's feels like a fresh start. 0:11:35.200 --> 0:11:37.640 And whenever we cross one of those boundaries, close one 0:11:37.720 --> 0:11:40.240 chapter and open another, we have a sense that we 0:11:40.320 --> 0:11:43.840 are um further apart from our past. Self. Whatever you know, 0:11:44.120 --> 0:11:45.960 I didn't get done last year or last year I 0:11:46.000 --> 0:11:50.360 meant to get in shape, or I meant to get 0:11:50.400 --> 0:11:56.080 my portfolio under control and diversify better. Whatever it was, Uh, 0:11:56.280 --> 0:11:58.360 I didn't do it yet. But that was the old me, 0:11:58.559 --> 0:11:59.960 and this is the new me, and the new me's 0:12:00.000 --> 0:12:02.160 going to be different. So that discontinuity can be really 0:12:02.200 --> 0:12:05.280 productive for anything where you you haven't already achieved the 0:12:05.320 --> 0:12:08.960 goal and maybe you were feeling a little sad about it, 0:12:09.000 --> 0:12:11.400 and now you can say, well, you know that was 0:12:11.440 --> 0:12:13.600 the past and and this is going to be different. 0:12:14.320 --> 0:12:16.000 It also tends to lead us a step back and 0:12:16.040 --> 0:12:19.280 think big picture about our lives. So we have shown 0:12:19.360 --> 0:12:23.720 that this happens um not just with things that you 0:12:23.800 --> 0:12:27.560 might expect to be momentous like a real physical change. 0:12:27.559 --> 0:12:30.000 You have a new job or a new house, or 0:12:30.320 --> 0:12:34.439 um a new community or a new role of some kind. Right, 0:12:34.480 --> 0:12:37.679 there's actually really wonderful past research by Wendy Wood at 0:12:37.679 --> 0:12:40.560 the University of Southern California looking at these life disruptions 0:12:40.559 --> 0:12:42.680 and how they can break up our habits. But we've 0:12:42.679 --> 0:12:45.200 shown that even um trivial events on the calendar that 0:12:45.280 --> 0:12:49.200 truly do not matter and they they create the same 0:12:49.600 --> 0:12:55.120 psychological and choice effects where we pursue goals with greater vigor. 0:12:55.200 --> 0:12:57.800 So the start of a new week is a minor 0:12:57.840 --> 0:13:00.280 fresh start. We already talked about New Years, that's the 0:13:00.320 --> 0:13:01.920 big one we're all familiar with. At the start of 0:13:01.920 --> 0:13:04.840 a new month. Sometimes the celebration of spring, especially its 0:13:04.920 --> 0:13:06.880 drawn to your attention. The start of spring feels like 0:13:06.920 --> 0:13:09.320 a new beginning, the celebration of a birthday, and there 0:13:09.360 --> 0:13:13.040 are many minor holidays that feel like fresh starts to people, 0:13:13.080 --> 0:13:15.839 So think more Labor Day and less Valentine's Day. And 0:13:15.920 --> 0:13:19.000 different religions have different holidays that signal a fresh start 0:13:19.240 --> 0:13:22.079 for people who practice in that religion. So all these 0:13:22.160 --> 0:13:25.120 fresh start dates um when we sort of look at data, 0:13:25.440 --> 0:13:30.079 have this incredible ability to increase, just naturally how much 0:13:30.160 --> 0:13:33.400 people are doing things like searching for the term diet 0:13:33.520 --> 0:13:36.640 on Google, or visiting the gym, or setting goals on 0:13:36.760 --> 0:13:39.319 popular goal setting websites about everything from their health to 0:13:39.400 --> 0:13:43.280 their finances to their education. Uh. And we have also 0:13:43.360 --> 0:13:48.000 done experiments where we show that by highlighting fresh start 0:13:48.120 --> 0:13:51.520 dates that people might not otherwise be attending to, we 0:13:51.679 --> 0:13:54.360 can get people to pursue their goals more aggressively. So 0:13:54.480 --> 0:13:57.559 my favorite experiment involved trying to get more people to 0:13:57.600 --> 0:14:01.400 sign up for a retirement saving account with their employer. 0:14:01.600 --> 0:14:03.679 UM That was you know, text beneficial. It was a 0:14:03.760 --> 0:14:05.199 four or three ban out of four oh one k, 0:14:05.320 --> 0:14:07.600 which is probably the most familiar. But this was when 0:14:10.360 --> 0:14:12.319 I do so I thought I could throw out some 0:14:12.440 --> 0:14:15.760 of that that fun stuff. Um So, so we UM 0:14:16.240 --> 0:14:19.400 partnered with four universities that had four or three B 0:14:19.560 --> 0:14:22.720 plans and we sent out mailings to employees who were 0:14:22.760 --> 0:14:26.440 not yet saving at the sort of match thresholds. They 0:14:26.480 --> 0:14:29.200 weren't taking advantage of all of their employeer benefits, or 0:14:29.240 --> 0:14:31.400 weren't saving at all. In fact, most weren't saving at all, 0:14:31.880 --> 0:14:34.200 and we invited them to start saving, either right away 0:14:34.840 --> 0:14:36.640 or in the future, because we know a lot of 0:14:36.680 --> 0:14:39.680 people would want to put off that that decision to 0:14:39.760 --> 0:14:42.880 start saving from past research. And what we varied is 0:14:42.920 --> 0:14:44.680 whether or not the date in the future when we 0:14:44.760 --> 0:14:46.960 invited people to begin saving, we said, we'll take care 0:14:47.000 --> 0:14:49.320 of it, just mail back this postcard. If that date 0:14:49.400 --> 0:14:51.880 in the future aligned with a fresh Start and was 0:14:52.280 --> 0:14:54.640 described in that way, or if it aligned with the 0:14:54.680 --> 0:14:57.000 Fresh Start but wasn't described So to be really specific, 0:14:57.040 --> 0:14:59.520 imagine your birthdays coming up in two months and you're 0:14:59.520 --> 0:15:01.200 in the six arm, and we would flip a coin 0:15:01.320 --> 0:15:03.400 and the coin toss would determine whether you got a 0:15:03.520 --> 0:15:05.640 version of the mailing that invited you to start saving 0:15:05.960 --> 0:15:10.120 after your upcoming birthday or in two months. Now, they're 0:15:10.200 --> 0:15:14.280 literally identical, but in one case we are highlighting an 0:15:14.320 --> 0:15:17.440 upcoming fresh start as the opportunity. So we tried this 0:15:17.520 --> 0:15:19.440 with birthdays, we tried it with a start of spring 0:15:19.960 --> 0:15:21.920 um and what we see is that inviting people to 0:15:21.960 --> 0:15:25.160 begin saving after a fresh start date and like literally 0:15:25.280 --> 0:15:29.680 calling it out as such, leads to more savings in 0:15:29.760 --> 0:15:34.760 the following eight months, uh than a literally identical invitation 0:15:34.880 --> 0:15:40.360 to save that doesn't name the fresh start date. Significant increase. Y. Yeah, 0:15:40.400 --> 0:15:44.040 it's pretty exciting. Humans are odd beings, right that we 0:15:44.400 --> 0:15:46.560 respond differently that, but it's cool to see that that's 0:15:46.560 --> 0:15:49.800 the case, and then you can tailor your marketing accordingly 0:15:49.920 --> 0:15:53.240 to help people make better decisions. And I'm curious to 0:15:53.280 --> 0:15:55.840 you write about Katie. You performed a lot of research 0:15:55.920 --> 0:15:58.920 that shows that we underestimate the discipline needed to make 0:15:59.000 --> 0:16:00.760 change in our lives, but that there are ways that 0:16:00.840 --> 0:16:03.280 we can make it more fun. So, yeah, I can 0:16:03.320 --> 0:16:05.720 talk about that because sometimes there are if we can 0:16:05.760 --> 0:16:08.280 make it more fun, we're more likely to stick to it. Yeah. 0:16:08.400 --> 0:16:11.120 This is a huge insight and and I think the 0:16:11.200 --> 0:16:13.360 best research on this comes from islet fish Buck at 0:16:13.400 --> 0:16:16.080 the University of Chicago and Caitlin Williott Cornell, who showed 0:16:16.480 --> 0:16:18.960 most of us, when we are left to our own devices, 0:16:19.040 --> 0:16:21.120 think the best way to pursue our goals is just 0:16:21.240 --> 0:16:23.760 to look for the most direct path to success and 0:16:23.920 --> 0:16:27.480 follow it. So let's take the example of getting in shape. 0:16:27.840 --> 0:16:31.000 What's the maximally efficient workout machine that will create the 0:16:31.080 --> 0:16:33.960 most pain and sort of benefits per minute. You're like, 0:16:34.080 --> 0:16:35.440 I'm going to get on that if I want to 0:16:35.440 --> 0:16:37.640 get in shape. Yeah, it means I'm gonna start running 0:16:38.200 --> 0:16:42.680 right this minute. Yeah, exactly, flailing your arms, carrying weights 0:16:43.040 --> 0:16:46.720 to all the things that are hard. A small minority 0:16:46.760 --> 0:16:48.800 of people, though, pursue their goals a different way, which 0:16:48.840 --> 0:16:50.840 is that they actually look for a fun way to 0:16:50.960 --> 0:16:53.600 achieve that goal of say getting in shape, so that 0:16:53.720 --> 0:16:56.440 that person might go to zoomba classes with a friend 0:16:56.520 --> 0:17:01.160 instead of getting on the punishing StairMaster. And what's really 0:17:01.240 --> 0:17:06.280 interesting is that the folks who into it they should 0:17:06.320 --> 0:17:08.399 find a fun way to pursue their goals. They're actually 0:17:08.400 --> 0:17:11.080 the ones that have it right. In randomize control trials 0:17:11.119 --> 0:17:13.320 where people are either encouraged to pursue their goals in 0:17:13.359 --> 0:17:16.120 ways that are fun or in ways that are maximally efficient, 0:17:16.520 --> 0:17:18.800 the people encourage to pursue goals and ways that are 0:17:18.880 --> 0:17:21.480 fun are the ones who actually end up sticking to 0:17:21.640 --> 0:17:25.240 them longer. And in most cases, it's not about how 0:17:25.440 --> 0:17:28.440 much progress you make percession. It's about sticking to it 0:17:28.760 --> 0:17:32.840 that leads to the real success. So that persistence difference 0:17:32.920 --> 0:17:35.800 between pursuing goals in a way that's fun and ways 0:17:36.160 --> 0:17:39.560 that are you know, slightly more efficient, we miss you know, 0:17:39.800 --> 0:17:43.080 we don't appreciate it, and we we make a mistake there. 0:17:43.440 --> 0:17:46.399 So I've done some research on different ways you can 0:17:46.480 --> 0:17:48.600 make it fun to pursue your goals, because there are 0:17:48.720 --> 0:17:53.159 strategies that systematically make it more enjoyable. Um one is 0:17:53.560 --> 0:17:56.240 whenever there's something that would feel like a chore. Otherwise 0:17:56.320 --> 0:17:58.400 you can actually try to link it with a temptation. 0:17:58.480 --> 0:18:01.640 So only let yourself say binge, watch your favorite TV 0:18:01.800 --> 0:18:05.200 show when you are working out at the gym, or 0:18:05.359 --> 0:18:08.280 only let yourself pick up your favorite beverage from a 0:18:09.040 --> 0:18:11.480 coffee shop, um, when you're heading to the library to 0:18:11.560 --> 0:18:13.720 hit the books. If you're a student, I talk to 0:18:13.800 --> 0:18:16.159 my students that weren't about that one a lot. Or 0:18:16.320 --> 0:18:18.520 you know, only let yourself listen your favorite podcast while 0:18:18.560 --> 0:18:22.240 you're doing household chores. And by combining those two things, 0:18:22.320 --> 0:18:25.200 something that's a temptation and source of pleasure with something 0:18:25.240 --> 0:18:27.719 that might otherwise not be super fun, that you might 0:18:27.840 --> 0:18:31.359 put off and dread, you can transform the experience so 0:18:31.440 --> 0:18:34.680 that you'll get your chores done and um, keep at it. 0:18:35.160 --> 0:18:38.480 And and there are other strategies to write. Selecting different 0:18:38.520 --> 0:18:40.520 types of activities as a way to pursue the same 0:18:40.560 --> 0:18:44.280 goal and also making it social can be really effective 0:18:44.280 --> 0:18:47.160 when you pursue goals with someone who you enjoy. That's 0:18:47.200 --> 0:18:50.040 another way to change the experience. But the key insight 0:18:50.240 --> 0:18:52.560 is when you're thinking about a goal, when you're making 0:18:52.600 --> 0:18:54.640 a plan, just something we already talked about a little 0:18:54.640 --> 0:18:58.160 bit earlier, how important it is to be strategic, think 0:18:58.160 --> 0:19:00.920 about pursuing that goal and anning to pursue that goal 0:19:00.960 --> 0:19:04.399 in a way you will enjoy, because ultimately that is 0:19:04.440 --> 0:19:08.200 a huge predictor of success. You've got to stick to it. 0:19:08.320 --> 0:19:10.080 And if you don't enjoy it, if it's no fun 0:19:10.160 --> 0:19:13.320 while you're pursuing the goal, you're going to quit. That's right. Yeah, 0:19:13.320 --> 0:19:17.760 that's where you can use that instant gratification which normally 0:19:17.800 --> 0:19:20.840 works against us. But then you're harnessing it. You're using 0:19:21.040 --> 0:19:23.640 that as like wind at your back. But so you're 0:19:23.640 --> 0:19:27.760 talking about temptation bundling, yes, yeah, yeah, I would love 0:19:27.800 --> 0:19:31.440 to hear, how like, how are maybe some specific ways 0:19:31.520 --> 0:19:35.720 that folks can apply temptation bundling to their financial habits 0:19:35.800 --> 0:19:37.920 to you know, whether it is for them to save more, 0:19:38.720 --> 0:19:40.960 whether it's them spending less at the grocery store. I'd 0:19:40.960 --> 0:19:42.920 be curious to hear if you have any suggestions for 0:19:42.960 --> 0:19:45.680 ways that folks can temptation bundle to get ahead with 0:19:45.720 --> 0:19:48.119 their money. Yeah. I think that's a great question. Um, 0:19:48.200 --> 0:19:49.800 And I do think there are ways that you can 0:19:49.920 --> 0:19:53.159 use temptation bundling when it comes to financial habits. Um. 0:19:53.240 --> 0:19:56.240 You know, one is just thinking about budgeting, which is 0:19:56.359 --> 0:20:01.040 not a task that everybody relishes and looks for too, um, 0:20:01.280 --> 0:20:03.760 and thinking about are there are there things you can 0:20:03.920 --> 0:20:06.840 bundle with budgeting that make it more pleasant, like maybe 0:20:06.880 --> 0:20:08.960 a favorite bottle of wine you only open once a 0:20:09.040 --> 0:20:11.600 month when you go through your budget, or a person 0:20:11.680 --> 0:20:14.159 you really enjoy spending time with and you both um 0:20:14.280 --> 0:20:16.520 get together when it's sort of time to make budgets 0:20:16.560 --> 0:20:18.600 and you get to chit chat and laugh a little 0:20:18.640 --> 0:20:20.520 bit while you're going through it. I will admit that UM. 0:20:21.200 --> 0:20:22.879 I was influenced very much on that one by my 0:20:23.119 --> 0:20:27.000