Christian recommends creating a rule that will modify our behavior and make it less likely that we're goig to overspend. To pre commit means to decide what you 're going to do before you're in that situation. Those who pre committed to saving their tax refund actually doubled their savings rate as compared to those who didn'tPre committing avoids this temptation altogether, he says.
#337: Meet Kristen Berman, a top researcher in the field of behavioral economics. She’s the co-founder of Irrational Labs, which designs products that are evidence-based in the behavioral sciences.
Her co-founder, Dan Ariely, is the James B. Duke Professor of psychology and behavioral economics at Duke University, and one of the most famous behavioral economists in the world.
Here are some of the (counterintuitive!) ideas that Kristen shares:
- Habits are overrated. Automate instead
- Budgeting doesn’t change your spending behavior
- Commit in advance
- Forget about the outcome
- Focus on the process
- You need accountability
- Think about the Three B’s: behavior, barriers and benefits
Tune into this episode to hear Kristen elaborate on these research-backed, evidence-based ideas about how to improve our spending, saving and investing habits.
For more information, visit the show notes at https://affordanything.com/episode337
*Note: This interview originally aired in October 2019.
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