The Conversations We're Not Having: Wendy De La Rosa

The Shortcomings of Financial Education

The equation is pretty simple. Earn more, save more, spend less. People fundamentally understand that. What’s really hard is actually to put that into practice. So this is not an educational pursuit, it’s a behavioral one.

Setting Your Environment Up to Succeed

The biggest thing is just recognizing you cannot spend on what you can’t see.

Getting What’s Yours

But I think women, and especially members of racial minorities, need to feel entitled. Need to feel more entitled to say, “I am an active member of this team and I am entitled to view this exchange fairly. I’m entitled to a fair exchange of goods and services.”

Starting the Conversation

It’s sort of this taboo subject. If I don’t know that you’re earning more money than me, then I can’t advocate for myself because I don’t actually know what I’m worth. So I tell people on the earnings side, you have to break this taboo. Just ask. “Hey, what are you earning, what are you earning, what are you earning?” Have your girlfriends, or your guy friends, over for dinner and just break that ceiling, because that’s the type of information that you need, so you can then ask and get what you deserve.

How Companies and Institutions Can Support Financial Well-being

“If you’re one of those institutions that’s sort of different, and you’re doing everything you can, I think one of the things that you can do is install a financial health day. The goal of that day is to make sure that you can set your house in order, that you’re setting up your environment to help you succeed. Then you can report that back out.”

Getting On The Same Page As Your Partner

“When you recognize that financial decisions or how people tackle financial decisions is one of the most cited reasons for divorce, now all of the sudden again we wanted to change that conversation. It goes back to what we were talking about; this level of shame. People don’t want to talk about it because they feel like it’s going to be an uncomfortable situation, but I don’t know how we can build a life together, how we can think about our future together, if I don’t know what mountains we’re climbing together.”

Brooke: Hello everyone, and welcome to the podcast of the Decision Lab, a socially conscious applied research firm that uses behavioral science to improve outcomes for all of society. My name is Brooke Struck, research director at TDL, and I’ll be your host for the discussion. My guest today is Wendy De La Rosa, incoming professor at Wharton, co-founder at Common Cents Lab and host and co-creator of the new TED series; Your Money and Your Mind.

In today’s episode, we’ll be talking about financial education, what actually changes financial behavior and the conversations that we’re not having. Wendy, thanks for joining us.

Wendy: Thank you for having me, Brooke. I’m excited to be here.

Brooke: Tell us a little bit about what you’re up to these days.

Wendy: I am up to the same things I think I’ve been up to for the past seven years. I am trying to understand how and why we make financial decisions and how we can use that to improve our financial wellbeing. But given the recent economic downturn as a result of the global pandemic, I think more and more people are focused on those types of questions.

Brooke: Yeah, absolutely. A lot of the patterns that we’ve seen, a lot of the changes that we have been seeing in the economy, were really super charged and accelerated by the pandemic.  So the massive shift to work from home, the gig economy really exploding… those have had really important consequences on people’s employment and on earnings. So of course financial decision making takes a huge hit.

Financial education is supposed to be something that helps us to make better choices in those kinds of circumstances. What are some of the shortcomings that you’re seeing with financial education?

Education versus Intervention

Wendy: I like to take a step back. I think a lot of times, when we face these problems that deal with the individual, our instinct is to sort of teach it away. If we can just educate people and teach them how to budget, how to save, then they’ll be able to budget and save accordingly. I think the sad part is that here is an example where intuition is not always correct. There’s this amazing meta-analysis done by John Lynch, Daniel Fernandes and Richard Netemeyer. They looked at close to 200 studies trying to understand what’s the impact of financial education programs on financial behavior. So if I get you in a room and teach you how to save, ultimately what happens to your savings behavior, what happens to your budgeting behavior? And what they found was that financial education programs accounted for 0.1% of the variance in your financial behaviors. So not zero, but very close to it, and more depressingly, if I haven’t depressed you enough, it’s lower for lower-income populations. The effect wears off over time. It’s something that I’ve found over in my research. So when we were thinking about starting Common Cents, we ran this very large survey where we asked people to list three or more actions that they can take in the next month to improve their financial behavior. Then we combed through all of their responses to see which were actually good behaviors that people listed and which were just nonsense behaviors. It turns out that 92% of the respondents could list three or more actions. Things like finally open up a savings account, asking for a raise, working more hours, setting up an automatic 401K plan.

So we have to recognize that financial behaviors, it’s not this sort of black box in people’s minds. The equation is pretty simple. Earn more, save more, spend less. People fundamentally understand that. What’s really hard is actually to put that into practice. So this is not an educational pursuit, it’s a behavioral one. Once we start to understand that, then I think that’s where the beauty begins.

Brooke: So all of this time, money, effort that we pour into financial education, are you saying that that is kind of effort not well spent? What role does education still play? My suspicion here is that there are certain kinds of behaviors that you need a certain amount of education to get the right behaviors off the ground. Education on its own is not enough, but that doesn’t make it kind of unnecessary, that there’s no value to that education. What are your thoughts on that?

Wendy: It’s a complicated answer because here’s what we do know predicts financial behavior. Your ability to do math, numeracy. So if you’re asking me as a potential parent, “Where do I want my kid to spend most of their time?”; learning how to get comfortable with math, not fearing adding, subtracting, multiplying, dividing, versus going through a financial education class, I would choose math 10 times over, because that is just a bigger predictor of someone’s financial behavior down the line.

But I don’t want to make the case that all education is terrible. I want to make the case that we can’t expect the superhuman out of the human. We can’t expect someone to sit in a classroom, learn how to budget, learn how to save, listen to this wonderful presentation and then go back out into the world where every single organization is getting smarter, faster, better at helping you part with your money, where your attention is split across your husband, your kids, your life, your friends, etc, and then expect people to remember that one hour class in perpetuity.

What we need is essentially interventions. A lot of these things, like do we need people to know how to save? Well, maybe, but a better way is just to create an environment where automatically X percentage of your paycheck comes out into a savings account. Guess what? We can do that. We have the tools to do that already and individuals can do that. Do we need people to fundamentally understand compound interest? I would argue no, because even educated people can’t really understand the power of compound interest. We vastly underestimate how much money we’ll have 10 years down the line if we invest it in the stock market compounding at a rate of 10%.

Even highly educated people often underestimate that because it’s a complex thing. Our minds are just not set up to make those calculations in our brain. But what we can understand, very simply, is that if I start saving now, that’s a lot better than saving tomorrow because of compound interest. That, people understand. That’s not a complicated reason. I do not think we need to understand a mathematical equation, because is understanding the mathematical equation going to drive you to click save or click invest? No. What’s going to drive you to do that is setting up an account that’s really easy so that you don’t have to click through 10 different streams. So then maybe you don’t have to click a button at all.

Brooke: Yeah. So this really is the behavioral approach to finance of course. I’m kind of baiting you, pushing you on education here because I want to push you into these corners where we’re going to have these conversations about education and kind of the behavioral approach to education as well. This idea that education is kind of all about pouring concepts into your brain. Then you’re going to go out in the world and live this embodied existence where those concepts have traction in your daily behavior.

Maybe we should be thinking that that’s just not a good model for financial education. That’s just not a good model for education, period. Education is about what we do with things. It’s about applied learning and how concepts feel in their practice and in their execution.

Making it Easier to Save and Harder to Spend

Wendy: Well there’s been this whole movement towards experiential learning. At Wharton specifically, where I went to undergrad, that was the whole ethos of the institution. It’s really this belief that the best way to learn something is by getting your hands dirty and doing it. But I think in the realm of financial education, again, it’s this concept that we have to realize that we’re human, and we’re imperfect humans. That’s what makes us beautiful.

If we expect someone who lives in New York City, and on their daily commute they are faced with 3000 ads on average, every day, we have to recognize that at some point that person is going to make an unwanted purchase. It’s not because they have a fundamental failure. It’s not because there’s something wrong with them. It’s because there is this environment that’s being set up where we’re creating David and Goliath stories all over. Maybe one time David comes out on top. We know that. But most of the time David doesn’t. And we create this shame. People are so afraid to talk about their financial situation because we’ve created this conversation saying; “There’s something wrong with you”. You didn’t have enough self control. You didn’t have enough willpower. You have messed up your financial situation. We haven’t really reframed the conversation to say, look, literally every company in the world is hiring experts to figure out how to get you to spend faster. You are going up against, not just one company, two companies, but millions of companies who are trying to optimize every single part of their marketing, every single part of their user experience, their sign up flows, their purchase flows to get you to spend your money faster.

Once we recognize that, we can start to set up guardrails to protect us against that. But it’s not a personal failure, and I think that’s why I want to reframe the conversation, because we just don’t even talk about financial behaviors. We don’t talk about our financial situation. I personally am much more likely to know the juicy details of my friends’ sex lives and marriages than I am about their financial situation.

We talk about politics and death and sex way more than we talk about our financial situation. That needs to change because I think what’s rooted in that is the shame that I have messed up. I don’t want to get too political here but, in the US, you just have all these, not just companies, but market forces where people on average are making less than what they did 20 years ago when all of their costs are rising. Everything is set up against them. Why are we still expecting the human to be a superhuman? We have to reframe that conversation, and the way that we do that is to focus on the financial behaviors and the environment. So how can I take this environment that’s set up for you to fail and set it up for you to succeed?

Brooke: So I really like that line of discussion. I think that it tees us up to ask this kind of question. When trying to adjust financial behaviors and taking account of the fact that we aren’t these perfectly rational agents who have unlimited self control and we’re extremely self aware about which influences are coming and nudging our behavior in which directions. If we put that model aside, then we ask; “Okay well which kind of ecosystem features need to change. Of those ecosystem features, which are the ones that I individually have the power to change, and which are the ones that are actually outside of my control and therefore I need to take some kind of or participate in some kind of collective action to make change.”

Wendy: So there’s two big things. The first one is your attention. We can control our attention in a way that helps us. So for example, we can talk about the simple equation: We need to earn more money, we need to save more and we need to spend less. So working our way backwards, how do we spend less? I always advise everybody to install a pop up blocker. You cannot spend on what you can’t see. If you think about our lives online, let’s say you’re thinking about getting a new pair of shoes but you’re still undecided. Those pairs of shoes, if you don’t have a pop up blocker, are going to follow you across the next 100 websites. So you’re going to see that ad forever. Of course, the first time you see it, you’re just thinking about it. The second time, you start to elaborate on it. The hundredth time, you start to ruminate that. That’s not a personal fault of yours. It’s just how our brains work.

So I would say; number one, install a pop up blocker. Number two, unenroll from all the shopping emails. There are companies like Unroll.Me that can help you do that automatically. The biggest thing is just recognizing you cannot spend on what you can’t see. The second thing on the spending side is that we realize that there are certain types of purchases that people really regret or they’re desperately trying to get a hold of. One of those is these small frequent purchases that we often make, which is eating out.

It’s one of these purchases that people often regret and it’s sort of death by 1000 cuts. If I were to ask you, Brooke, how much have you spent on eating out or delivery apps in the last week, could you give me a number?

Brooke: I can. It’s zero.

Wendy: Oh, good for you. Okay. Everybody needs to be like Brooke. (laughter) What we can do is, we do remember how many times we actually ordered out or eaten out, or gone out to a restaurant hopefully wearing a mask. So in those situations, I tell people let’s change your budgeting environment and let’s focus on a frequency budget where, instead of trying to calculate how much you’ve eaten out and say I can only spend $200 a month on eating out, that’s just impossible for you to track. Just say, I can only eat out once a week and I have a maximum of $50. Now, all of the sudden, it’s just easier for people to track to remember, to stick to that budget. Going back to that equation of earning more, saving more, spending less, we think about the savings model and we keep this focus on our attention. So we talked about taking out our attention away from things we don’t want to spend on and taking our attention away from a dollar amount to a frequency amount.

Now let’s focus on not putting our attention on savings; decreasing our attention on savings. What I mean by that is; what we’re finding is that the more that we remind people of their current savings balances, the more likely they are to withdraw, because we live in a world where we always need money. So if I constantly tell you, “Hey you have $100, you have $200 in savings, you have $300 in savings”, it’s just a constant reminder for you to withdraw. You’re like, “Oh crap, I didn’t realize I had $300”.

This is sort of the ‘save and forget’ strategy. Separate your checking account from your savings account. Put it in another bank and try to never think about it again. The best way to do that is to set up an automatic savings account.

Brooke: Yeah. So increase the friction as much as you can on your spending habits and decrease the friction and decrease the salience on your savings.

Interlude

Hi, and welcome back to the Decision Corner. Today I’m speaking with Wendy De La Rosa, co-founder of the Common Cents Lab and creator of the new TED series; Your Money and Your Mind. We’ve talked about the shortcomings of financial education, as well methods and strategies to help set you and your environment up for financial success. Now we’ll talk about increasing your earning potential, necessary financial conversations, and managing employer-employee relationships. We’ll also talk about the institutional changes that could really make a difference in this space, as well as tips on how to get on the same financial page as your partner or family. Stay with us!

Increasing Earnings By Knowing Your Value

Wendy: Right. This is all our attention. What are you paying attention to, and what are you paying more attention to and less attention to? Then, on increasing your earnings, this is where everybody needs to increase their attention, especially women. A part of the reason why we’re seeing, outside of just outright sexism and racism, this gender gap and racial earnings gap, is because we don’t really talk about how much money we earn. It’s sort of this taboo subject. If I don’t know that, Brooke, you’re earning more money than me, then I can’t advocate for myself because I don’t actually know what I’m worth. So I tell people on the earnings side, you have to break this taboo. Just ask. “Hey, what are you earning, what are you earning, what are you earning?” Have your girlfriends over, your guy friends over for dinner and just break that ceiling, because that’s the type of information that you need, so you can then ask and get what you deserve.

Everybody needs to constantly increase their focus on “How can I increase my earning potential?”

Brooke: Yeah. Those conversations are hard to have if it feels like the request is just kind of a desire for more, as opposed to a justified request to be paid fair value for the value that you deliver. I think that a lot of the conversations that I’ve participated in around that, mostly on the asking side I’d say, it feels like the focus is around just the money aspect of it, as opposed to this exchange of value. That’s an approach that I’ve found really helps me to be more comfortable having those conversations.

I’m a member of the team. I want to be contributing value and I want to feel that there’s a fair exchange of value going on. I think that I’m delivering good value. I want to make sure that the exchange continues to be fair. As I lean into delivering more value, I expect more value to be delivered to me. That’s how fairness gets preserved. Having that conversation focus not just around “I know what other people are making and you are being unfair to me”, but saying “I want to be an increasingly contributing member of this team and part of my ability to do that rests on making sure that I know that I’m being paid fairly for the value that I’m contributing.”

Wendy: I love that Brooke, because I think what’s underpinning that is the sense of entitlement. I feel like the word entitlement has been kind of used to mean always negative things. But I think women, and especially members of racial minorities, need to feel entitled. Need to feel more entitled, to say, “I am an active member of this team and I am entitled to view this exchange fairly. I’m entitled to a fair exchange of goods and services.”

You can easily have that conversation by saying, based on my experience, based on what I’m bringing to the table, my fair market value is X. That’s not you being greedy or asking for more. It’s just saying this is what my fair market value is. You know that because you’ve had those conversations, because you’ve increased your attention to that.

Brooke: Yeah. Now just to kind of put a bit of a damper on that, there are still obviously difficult challenges with those conversations. One, you mentioned women and racialized communities, and people who traditionally don’t get a very fair shake in the job market. One of those challenges is to say; “Okay, well even if everyone is entitled to be treated fairly, some people will struggle more than others to get their contributions recognized for the value that they deliver.” That’s something that I think the pandemic has really shown a light on is that there are people whose contributions we have dramatically undervalued for a really long time. It took this kind of massive breakdown of lots of societal structures to make us realize who is actually essential. Actually, the world kept ticking pretty well when a bunch of white collar people didn’t go to their office buildings every single day, but wow did things start to crumble in a hurry when you don’t have people working at the grocery store restocking a shelf. They’re the most invisible forms of labor in many of these instances, but they are so critical to society continuing on.

So that’s one, the challenge in getting the value of your contribution recognized and acknowledging that certain people will struggle more than others in virtue of their history, in virtue of the type of work that they’re doing, in virtue of all of this package of things to get their case heard, and heard fairly. The other is around the kind of replacement value of labor, and the difficulty of changing jobs. Sadly, we’re in a situation where it’s easy to get 300 applicants coming in for a job opening. It’s harder as an applicant to have 300 offers for your labor. So we end up in this situation where, even if your contribution is recognized, there can be this kind of brinksmanship where someone can say, “Well if you think that someone will offer you more money for the value that you deliver, I invite you to go out there and just find that other job”, knowing full well that it’s really hard to find other jobs and there’s a power imbalance there where you only have one job or probably only a small number of jobs, even if you’re doing some kind of gig work, to piece together your financial picture. You don’t have the opportunity to diversify your portfolio as a laborer in the same way that an employer has the possibility to diversify their portfolio with employees.

Wendy: I think you raise a good point. There are just sadly existing limitations to the consumer. There is this power imbalance. Before the pandemic, I will say that one of the things from a US context is it was actually really hard to find labor. Before the pandemic, there was this incredible amount of job growth. Wage growth wasn’t there, but job growth was there. I think there, people could more easily search for jobs. We’ll get back to that. We’re not going to be in this state for a long time, at least in the US. Things are recovering. But I also think that the feeling of entitlement can empower individuals to recognize that, if this is a work environment that doesn’t fundamentally value you in the way that you should be valued, and they have explicitly told you that, then it’s your decision to say, well am I going to accept this value or am I going to do everything that I can after work to try to get out of here. I almost view that as an abusive relationship. We wouldn’t encourage our friends to stay in a relationship where they’re not getting what they deserve or they’re not being treated how they should be. We should expect the same of our employers. This is just a different type of abuse and it’s labor abuse if you’re constantly being underpaid. So that I think is just a signal for each and every individual to say, “I really need to pound the pavement and try to find something else”, or that increases the urgency of becoming a job seeker.

The constraints that you’re highlighting are real. You can’t jump ship until you have another ship to jump to. But hopefully that will highlight to you the urgency of trying to find another ship.

The Job Market and The Role of Institutions

Brooke: So coming back then to this distinction between the kinds of changes to the ecosystem that you can bring about individually versus those kinds of changes that require more collective action. In terms of trying to improve your earnings and to make sure that you’re getting fair value, some of the ideas that you put out there were, first of all, just talking to people around you to understand what it is that they’re earning. Along with that, maybe having some conversations with them as well about why they earn what they earn, and what value they bring in their employment so that you kind of arrive on the scene not only with an idea of what other people are earning, but also tooled up with this ability to carry on a conversation about how certain value warrants certain remuneration. So, that’s something on the kind of personal side.

What about on the institutional side? If it were up to me, I would say we should have really strong job growth out there so that all of us have more of these opportunities to have fair conversations. Sadly, job growth is not one of those things that I can pull a lever on all that strongly by myself, so what can we do collectively to move in healthier directions?

Wendy: Yeah. I don’t know if that conversation is all that true. I’m just thinking about it in the US context. I think businesses were really lucky to benefit from these major tax cuts that were made under the Trump administration. The thesis of those tax cuts were, well now businesses will have money to invest back into their companies, to make capital investments, to hire more people, to increase wages.

Ultimately what we saw was a huge increase in stock buybacks. I do think it’s a decision at the business level. As a business owner at the institutional level, what are you going to do with your extra resources, with your extra cash flow? We have still huge cash balances on American balance sheets. They’re just sort of sitting there and not being dispersed to the American workforce. I think those are institutional decisions. Obviously, now we’re getting into macroeconomics rather than consumer behavior, but I do think at some level lots of institutions are in the position to make that decision. Now, going back to attention, one of the things that I often say is that all of these tips that we’re giving people: ‘set up your environment so that you can succeed’. They take time and they take attention. As we think about the decisions that people make the first day on the job when they’re just trying to log onto their computer and remember people’s names and faces, during all that they also have to make their retirement allocation decisions.

Okay, they probably made one, but it’s probably not the best one. When they go home, we have full lives. So I always encourage institutions to say, you give your employees sick days, mental health days; give them a financial health day. I’m giving you a day so that you can finally get health insurance set up in the right way, so you can finally get your life insurance set up in the right way, because that takes time. Choosing life insurance, that takes time.

I am giving you a day so that you can set up your banking system in the way that you need to get it set up. Setting up an automatic deposit on the 25th of every month doesn’t work for everybody because most people aren’t paid monthly. You need to go and take the time to find a bank and institution that works for you so that you can set up an automatic deposit anytime you get paid. All of that takes time which we don’t have as it’s our most limited resource.

So, if you’re one of those institutions that’s sort of different, and you’re doing everything you can, I think one of the things that you can do is install a financial health day. The goal of that day is to make sure that you can set your house in order, that you’re setting up your environment to help you succeed. Then you can report that back out.

Financial Health Days

Brooke: I really like that. That’s a very innovative idea, one that I haven’t come across before. It’s interesting. We don’t seem to find it so outlandish that employees would sit through a couple of hours of presentation about a 401K plan and all these different kind of elements of benefits packages and these kinds of things. We don’t think it strange to allocate their time to learn about it, but the idea that we would allocate time for them to digest what they’ve learned and actually implement some of those decisions seems to come so far out of the blue.

Wendy: Right, because again, the goal is not just for people to learn. The ultimate goal is for people to have financial security. In order to get financial security, you have to implement these things. You have to put them into action and that takes time. That takes time. Allowing people to have that time to do that is important.

For businesses, people who are stressed about their financial situation, research has shown that they’re less productive at work. You can’t be productive at work when you’re trying to figure out in your mind, “Did I pay that bill?”, “How am I going to pay that bill?”, or “Cra, I have so much to do?”. People are just not their best selves at work. So if you want productive employees, you also have to recognize that they need the time to set their financial house in order.

One day a year isn’t going to break the bank.

Brooke: Yeah. In terms of the productivity increments that you can unlock with that, it’s a very good investment.

Wendy: Right, because again, time is this unique resource that we’re all just dying to get more of. I think the best way to try to implement this is, yes; give people a financial health day. It’s concentrated, everybody knows what they’re supposed to do on that day. But then let them know; report out what you’ve done. It doesn’t have to be a detailed description of your financial lives. People are hesitant about it, but the reason why I think that’s such an important add, is because we know that we are more compelled to act when we know we’re going to be held accountable, when we have to share out. So I think that would just be such a beautiful thing if you have your employees say, I was finally able to set up my 401K. I was finally able to open up that savings account. Or even for older employees, I was finally able to set up a will. We haven’t even talked about that. Or for recent divorce families, I was finally able to finalize my divorce. All of these things take time, which take away from our productivity, which take away from our mental health. If you have to report things out or at least say, yes it was a productive day because this is what I’ve done, and people know that they have to report out so they know they have to at least focus part of that day to financial decision making, I think it would be a beautiful thing.

Brooke: Doing something with what’s reported out could be really powerful as well. As you talked about that, I thought wow, wouldn’t it be interesting to kind of aggregate that information and for this to be something like kind of a grassroots development of material that ultimately would be owned by HR. So you’ve got your first year employee and they’re coming up on their first financial health day. They might have some priorities that they know they want to get knocked off the list on that day, but they also might be saying, well what is actually the best use of my time in this instance.

Which of the financial priorities that have the best ROI. For HR to be able to say, typically first year employees do mostly this. This chunk of stuff is stuff that they down the line find really rewarding. Most of them looking back say they spent a bunch of time on this and they could have waited a few more years or potentially done it never, and it wouldn’t have changed much.

Financial Priorities in Different Stages of Life

Wendy: Right. Maybe it’s something that changes by tenure of employee. I would argue maybe it’s something that changes by your life state. Whether or not I’m a new employee, maybe I’m a new mom. There are things as a new mom that you have to set up for financially. In a US context, we encourage families to open up a 529 savings account in order for you to reap the tax benefits of saving for your children’s college or educational pursuits in the future.

It takes time to open up and close accounts. If you have multiple children, it takes even more time because you have to remember all of their social security numbers and you have to input it six or seven times. These are just annoying tasks. For a new mother, for a new parent, that just may be the thing that is most important to them regardless of whether or not they’re a new employee or an older employee. But I think it’s a beautiful idea of thinking about or at least helping people figure out what are some of the things you should do on that date given your life stage. I’ve been on this kick for a long time. I think, if you’ve heard any of my talks, anytime I talk to employers I say “You have to give your employees a financial health day.” We’re asking the superhuman of the human and it’s too much.

Brooke: That reminds me of when my wife and I had our daughter. There were a few other people at my workplace who were also having kids around the same time. At one point around the lunch table, back in the days when lunch tables were a thing (laughter), we had this conversation about how many people had set up a will and gotten life insurance around the time their kid was born. All of the new parents kind of put their hands up about thinking that those things were really important. But the number of people who actually managed to follow through on it and get it done was really small. For new parents, those are really, really important safeguards. If things really go badly, that time that you spent setting those things up and the money that you invest in making sure that they’re there, those investments are really critical if you run into some bad situations in your life.

Wendy: Yeah. Life insurance I think is one of those things that’s the most selfless act you can do. You will never reap the benefits of life insurance, but you know that your future generations will, your spouse or your children. But again, it’s one of these things that just takes time because very rarely can someone just sign up for life insurance. When you get life insurance, you have to oftentimes get a test; get a health test. Someone has to come out to your house, take your blood pressure, weigh you. That takes time.

Going back to this idea that; we all live full lives. It’s not like people are saying I don’t know what to do with my time. In fact, the American workforce is one of the most overworked workforces in the world, not including Japan and a couple other countries. We need to give people back time to be humans.

Brooke: Yeah. Time and attention. You mentioned attention earlier, installing an ad blocker, pop up blocker. I’ve been using one for years. A couple of months ago, just as an experiment, I disabled it to go and look at what the Internet’s started to look like now that several years have passed. I was so overwhelmed. Attention is such a precious resource that, when you have time, you can be present to do the things that you need to do.

So I really appreciate the suggestions that you’ve made throughout our conversation about small things that we can do individually to take back our time, take back our attention, to not beat ourselves up about not implementing these things, not being the superhuman as you mentioned. Giving ourselves a pass for just being human and recognizing that there are very real constraints on what it is that we’re going to be able to get around to doing, and hopefully spending a chunk of that time kind of setting up our ecosystem so that we don’t have to paddle upstream quite so hard all the time. So reducing the barriers for saving and trying to make it easier for ourselves to have conversations with our employers about increasing our earnings and making it harder to spend money, making it harder to find the next thing that we just need to buy. You gave an example in a piece that you wrote a little while ago about delinking your credit card from some of your apps to make it harder to spend your money. Those kinds of things, increasing those friction gradients for spending, those are great ideas. Identifying as well these more kind of collective macro features that can really help us out in this way. Finally, I think something that came up that we didn’t talk about that much explicitly was finding allies in this. So finding your friends and your colleagues when you’re talking about how much are people earning and why, and helping have those conversations. But also finding those opportunities for your employer to be an ally. This day is not you just giving me something for free. This day is something that I can put towards something very concrete and very specific that will help me to be a more productive employee.

Talking Finances With Your Partner

Wendy: Right, exactly. We’ve talked about the ally of your employer, the ally of your friends. I think also the ally of your partner as well is an important one. We can end on this, but a couple of years ago me and a colleague created this list of 10 conversation questions to have with your partner. In my research, I realized that very few couples actually had an idea of their partner’s financial situation before getting engaged.

When you recognize that financial decisions or how people tackle financial decisions is one of the most cited reasons for divorce, now all of the sudden again we wanted to change that conversation. It goes back to what we were talking about; this level of shame. People don’t want to talk about it because they feel like it’s going to be an uncomfortable situation, but I don’t know how we can build a life together, how we can think about our future together, if I don’t know what mountains we’re’re climbing together. How can I help you climb that mountain if I don’t know how much student loans you have or what your credit score is? I think so many people are jumping the broom and getting into relationships and marriages without having a full picture of what the financial situation looks like. I actually think that that’s so troublesome. It’s so troublesome because you then are just wandering into the darkness. You just don’t know. You won’t even know how you should set up your environment to help you succeed because you don’t even know what problems you’re trying to tackle.

So the biggest ally you can have in all of this is your partner, and getting on the same page with your partner early is so important. We actually have a list, if you go to our TED series; ‘Your Money and Your Mind, we actually have a list of 10 conversation starters that you can crack open a bottle of wine and just chat. Just; ”Here I am, warts and all. Here you are, warts and all. Let’s work together.”

Brooke: That’s great, and I think that that’s a very nice place to leave our listeners off. We’ll make sure to include the link in the transcripts so you can go and find that on the website. On that note, Wendy, thank you very, very much for your time and your insights today. We look forward to talking to you again soon.

Wendy: Great. Thanks, Brooke. It was a pleasure.

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