Afford Anything The Gap Between Knowing and Doing - with Dr. Stephen Wendel from Morningstar
Jul 23, 2018
Dr. Stephen Wendel, a behavioral economist and head of behavioral science at Morningstar, dives into why we often delay financial actions despite knowing better. He discusses the psychological barriers to decision-making and shares transformative strategies to bridge the gap between intention and action. Wendel emphasizes the power of automating tasks, creating mental accounts, and visualizing vivid scenarios to enhance financial behaviors. His insights aim to empower listeners to overcome procrastination and align their actions with their financial goals.
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Freezing Credit Cards to Curb Spending
- Stephen Wendel shared how he literally froze his credit cards in ice to prevent impulsive spending.
- This physical barrier helped curb temptation by making it inconvenient to use credit cards impulsively.
CREATE Framework for Action Gaps
- Overcome gaps in action by addressing each stage: cue, reaction, evaluation, ability, timing, experience.
- Tailor solutions like changing environment, setting reminders, and adjusting emotional reactions.
Set Specific Cues and Implementation Intentions
- Use appropriate cues: big alarms for one-offs, stable environment cues for habits.
- Apply implementation intentions by scripting when, where, how you'll act including backup plans.
