Tag Archives: money

Frey Freyday – Money

(Frey Freyday is simply a bunch of inspirational, motivational and other quotes meant to make you think, reflect, smile, even laugh a bit. Hopefully helpful, useful stuff..)

Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.- Ayn Rand

Wealth is the ability to fully experience life. –Henry David Thoreau

WORD TO LIVE BY:

 mon·ey – [ˈmənē] – a medium that can be exchanged for goods and services and is used as a measure of their values on the market,including among its forms a commodity such as gold, an officially issued coin or note, or a deposit in a checkingaccount or other readily liquefiable account.

No matter what our career or place in life is, no matter what our life’s mission or purpose is, we need to master money at least on some level. Put simply, we must spend less than we earn, save at least a little for the future and plan for the future. We all know this, right?

Money can do great things in communities, charities, and in lives. It can also be the number one reason why marriages break up. I believe it is simply how we think about and talk about money – and yes, it needs to be discussed more often.

Before anyone does a financial plan, a budget, or whatever, I suggest that it may help to first understand some things and ask some questions….Why is it hard for many of us to save for the future (or invest)? Why does money make us behave in all sorts of weird ways?

From a Ted Talk by LAURIE SANTOS  “…..we’re the smartest thing out there. Why can’t we figure this out? In some sense, where do our mistakes really come from? And having thought about this a little bit, I have seen a couple different possibilities. One possibility is, in some sense, it’s not really our fault. Because we’re a smart species, we can actually create all kinds of environments that are super, super accommodated, sometimes too complicated for us to even actually understand, even though we’ve actually created them.”

So, Ms. Santos, and other scientists, has performed experiments on people and on monkeys. As we all know, sometimes people make bad, irrational decisions about money. Illogical, fearful, selfish, wasteful, impulsive, among other things. Guess what? Monkeys act in a very similar manner. Scientists gave monkeys coins and had them ‘pay’ for grapes. They gave them different scenarios, and like humans, they behaved irrationally in similar circumstances.

The one thing you can learn from scientists’s work, is that whatever strategies we’re using for money, especially those strategies that we share with monkeys, those kinds of strategies can’t be built in for money per se. They’re not for markets or for credit cards. They’re just strategies that we had sitting around in our primate brain that we’re adapting to money. And that might mean that they lead us astray.

Whether you’re looking at the dessert cart and you’re trying to avoid the temptation, or you see something that you want to buy NOW and you also want to save up for something in the FUTURE, you’re going to probably buy it NOW. If you’re seeing your stocks go down or you see losses on an investment or any financial transaction that generates fear or loss, you’re not going to be able to see that in anything but old evolutionary terms.

So what do we do? How do we overcome? Again, like Ms. Santos, the Ted speaker mentioned, “humans are not only smart, we’re really inspirationally smart to the rest of the animals in the biological kingdom. We’re so good at overcoming our biological limitations.”

In other words, we can’t fly to anywhere – but we invented machines that can fly us. Many of us have poor eyesight, yet we invented glasses, contacts and surgery to change our eyesight so that we can see. We, as a species, have invented technologies, machines and strategies to overcome our biology.

The irony is that it might only be in recognizing our limitations that we can really actually overcome them. The hope is that we all will think about our limitations, not necessarily as un-overcome-able, but to recognize them, accept them, and then use the world of design to actually figure them out.

Likewise, we can do so with money. A simple step is to make it automatic. Set up auto withdrawals so that you really don’t ‘see’ the money, it just automatically goes into savings. We can set up a financial plan with emotions in mind so that we can ‘protect our plan’ better. Use technologies, strategies, and rational methods to help you save, spend, and invest.

A few other quick thoughts:

  1. Languages that don’t have a future tense, such as Chinese, the Scandinavians and the Japanese, strongly correlate with higher savings.- this refers to the future using verb helpers like “will” and “shall,” while others don’t have specific verbs to refer to future actions.
  2. Can money buy happiness? In many ways, yes – money can buy happiness — especially when you don’t spend it on yourself. The key is social spending that benefits not just you, but other people.

We have to make it automatic and take out the impulses and emotions. We have to educate ourselves more, we have to change our vocabulary, perspective and long term thinking if we want to save for the future.

Frey Freyday was actually born out of something I created called “Words To Live By” (WTLB). Going forward, I will now not only share the quotes, as you may be used to receiving, but also a related (WTLB). In 1999, when we had our first daughter, I was contemplating how I would raise my new beautiful child, and I was thinking about how I can best educate her and my other children about values, morals, and other key thoughts about life. School offers education. Religion offers some values and morals. Parents offer most of it, sometimes intentionally, sometimes accidentally.
So I created a (WTLB) book, like a dictionary, which lists things like honesty, love, persistence, etc. with a definition that I created, with my wife’s input. I then turned it into a workbook with one word per page and space below for notes. For years we would discuss with my two daughters and they would draw pictures and make notes in the blank space. I may share some of those images with you. As they got older, they were less inclined to draw and more open to quotes and references from adults, hence where Frey Freyday came from..

 

BONUS

Ted Talk #1- Are We Wired To Be Bad With Money?

http://www.npr.org/2014/04/04/295349615/are-we-wired-to-be-bad-with-money

Ted Talk #2 – Could Your Language Affect Your Ability To Save Money?

http://www.npr.org/2014/04/04/295356139/could-your-language-affect-your-ability-to-save-money

Ted Talk #3 – Can Money Buy You Happiness?

http://www.npr.org/2014/04/04/297888687/can-money-buy-you-happiness

Saving for tomorrow, tomorrow

Saving for tomorrow, tomorrow

Some say this gentleman speaks a little differently. Regardless, overlook that and concentrate on this good, simple message!

It’s easy to imagine saving money next week, but how about right now? Generally, we want to spend it. Economist Shlomo Benartzi says this is one of the biggest obstacles to saving enough for retirement, and asks: How do we turn this behavioral challenge into a behavioral solution?

https://embed-ssl.ted.com/talks/shlomo_benartzi_saving_more_tomorrow.html

If you’ve put off saving, investing or even thinking about it, just take a quick look at this

If you’ve put off saving, investing or even thinking about it, just take a quick look at this

I personally have had ups and downs, and I used to save a lot, used to invest, then when things got tough, I just started putting things off, avoiding it, deferring it, or just plain pretending like I never thought of it, yet it was always in the back of my mind. So many people don’t talk about finances, don’t think about it, and just keep pushing it out until a later date for all sorts of reasons.

Please don’t. Please think about it now…..it is easier than you think. People with less brains and less talent have done it, so you certainly can.

Tony Robbins explains how you can attain financial security more easily than you think.

http://www.inc.com/tony-robbins/wealth-isnt-about-not-working-about-not-needing-to-work.html?cid=sf01002

A video: how to handle money

Another great yet quick video about thinking about, and handling money…..

 

FROM:http://brendonburchard.tumblr.com/post/110086806578/how-to-handle-money

Summary:
If you handle your money in the right way, you can have more, give more, and enjoy your life more.
Here’s what you can do to start taking control of your money now:

1. Revisit your story about money. Where we come from and what we hear about money unconsciously shapes our lives. If you think rich people are negative or that having money is bad, you won’t attain wealth because you don’t want to be negative or bad. If wealth is something that brings you more happiness, joy, and service, you’ll want to make more of it. So, first, redefine what wealth means to YOU!

2. Make sure you automatically invest. When get a check from your employer, have some of the funds automatically go into your savings account or investment account. This way you won’t forget and you won’t spend the money unnecessarily. Automatically investing means your money will be earning money for you and working for you.

3. Ask the question, “How can I add more value in the time in which I serve?” Squeeze in more value. Hustle a little bit more. Serve even more. Adding more value to people in the same amount of time makes you more productive, gets you more recognition, and gives you more opportunities. There’s no traffic beyond the extra mile! Just add a little more than anyone else is doing, and you’ll be in a category of one.

4. Raise your standards for a reward! If you’re a high performer and really adding value but you’re still not being rewarded for your true contribution, raise your minimum of what you will allow in your life. Be bold, push the boundaries, and you will be rewarded.

When you follow these simple steps for handling your money, you will have a positive story about wealth, your money will be earning money for you, you will be adding more value, you will have a higher standard for yourself and you will be experiencing The Charged Life!

Full Transcript:
How to handle money. First, wash your hands. Kidding.…that’s a great question.
How do you handle your money more intelligently so you can have more of it, so you can give more of it, so you can enjoy your life to the next level?
1. Number one, I think you must revisit your orientation to wealth.
If I say to you, ‘rich people,’ what does that bring up for you?
When you think about rich people,what do you think of?
Are they good? Are they bad? Are the rich, 1, 2, 3, 4% of the world good people, bad people?
What are they like?
What are their values like?
Do you want to become one of them?
I don’t know about you, but sometimes you discover that where you live or where you came from or what you heard of about money in your life is absolutely unconsciously driving your life today.
For example, I grew up in a very difficult economic situation. I grew up in a very difficult town and place, an old Irish mining town that had been economically depressed for nearly a century, where people didn’t have a lot, and people really struggled. Very blue collared, tried to get through the day, lots of poverty, lots of people struggling and I can share with you that there was this conversation often, about people on the other side.
There’s people on the other side of the tracks. There’speople on the other side who are wealthier. There was a lot of the culture Igrew up in where, ‘oh, those rich people.’ There was this projection offrustration, restlessness or anger towards ‘rich’ or ‘wealthier’ people, andbecause of that I didn’t ever want to become one of them. So I didn’t, for avery long time.
It’s funny, because one of the basic human drives we have isthe human drive for congruence. We want to be congruent in our thoughts and behaviors.
If we think that a type of person is negative, our body, our mind and our subconscious will do everything it can not to become that. We don’t want to become something that we think is negative.
So if you think wealthy people or rich people are negative, guess what you’re never going to attain? Wealth. And that’s why it’s important to revisit all those old stories and phrases we heard growing up, you know.
‘Money is the root of all evil.’
‘People with money are insensitive.’
‘People with money are selfish.’
If you gain more wealth and success in life you’re just going to be more busy and you’re never going to have time for your family, and you’re going to forget anybody who ever came along with you and ever supported you and all these things. We think this big story about money.
So, what’s your story about money? Is it positive? Is it negative? Is wealth something that will bring you more joy, more happiness, more ability to give and serve and do something with in your life? Or, is it something that terrifies you because you think you won’t be able to handle the obligations that come along with it?
You worry that if you make more money or to make more money you’re going to have to be away from your family more, so you never try.
Most of us have a lot of really bad assumptions about what it would take to succeed, but also what it would take to make more money, and ultimately to keep more money, to sustain more money. Because I bet you also think, ‘oh I heard it’s lonely at the top.’ Well who wants to be lonely? And if rich people are bad, who wants to be a bad person? If rich people are pushing family members away and becoming selfish, who wants to become that?
So you have to redefine what wealth would mean for you specifically, not what the culture told you it could be.
I will share with you that after… I’ve been through the ringer financially in my life. I grew up with nothing and then I started making something in corporate America. I built something of myself. I started working really hard. I got a good job. I started climbing that corporate ladder. I discovered that the corporate world wasn’t for me, and so I left, I quit to start my own dream of doing videos and writing, and doing my seminars and all the things I do now. You know what, I did exactly what people predicted; I promptly went bankrupt. I went broke. I had no idea what I was doing.
It would have been easy at that point, very easy to quit, very easy to say, ‘oh you know what, money’s not for me,’ but I thought I know that sometimes if you don’t have money you can’t sustain the message. If you’re not earning than you can’t keep giving. I thought, ‘I have to change my orientation here. I have to get serious about making money and do it without all the guilt and the nonsense that my culture, the past or the popular media thrusts on people with money.’
Because guess what? There are also philanthropists. There are also people who take money and support their family. They send their kids to college. They get safer cars. They do well in their community. They buy books for kids. They do things that matter with their wealth and matter of fact, that’s most wealthy people.
It’s really hard to believe that if you’re not wealthy yet, but I can share with you, after I had my big breakthrough and I started learning how to build more value in the marketplace, everything shifted for me. For the first time in my life I had money. The funniest thing is, I didn’t even know what to do with it, because I never had it before so it was just there.
Guess what? I started finding things to do with it, no problem, as you will. But those things I found to do with money, they didn’t tear me from my family or make me a bad person. I gave more to charities. I spent more time with my family. I could take them on vacations. We could go to the Caribbean together. I could do things for people I love, little gifts, treats and acknowledgements that made them feel happy.
I found ways to utilize it that made me happy and now I had no negative associations to it anymore. So, all I can encourage you to do if you have any hooks or negativity about rich people, or about wealthy people or about the top 1, 2, 5, 20, 30, 50%. If you have any negative thoughts about people in general, it’s time to clear those up and try to rewrite your own meaning about what it would take and what it would be to have wealth in your life.
2. I think the second thing you already know, I just want to make sure you’re doing that, is that you are automatically investing.
If you’re not already doing that, please do that. It’s so simple. There are so many books on what you need to do. It just basically means, if you are in charge of putting money in your savings or into your investments, you’re in trouble. Because you’re never going to do it. And I’m not saying go hire somebody. It just means, when a check comes to you from your employer, have it automatically divert some funds to a savings account or investments account, so you never even see the money. You don’t have to write the check, you never see it, it’s just gone.
Just take 5 – 20%, whatever you can do, do something. Put it directly into savings or into an investment account. You can ask your banker about it. You can ask anybody about it. You can read tons of books, like The Automatic Millionaire or Money Masters. You can learn how to do this. All it means is you just never see the money, because if you’re in charge you’ll forget or you’ll say, ‘this month i’m not going to do it,’ and then for four months you don’t invest and put your money away.
Warren Buffet was asked, what would he do if his family didn’t have money? What advice would he give them? He said, ‘you know what, to take whatever extra money they do have and put it in an index fund.’ Index funds beat the market over a period of time almost always, not always, but over a period of time they’re one of the safest investments. So put your money there. If you don’t know anything just keep putting money there and over a period of time it seems to do pretty good. It usually seems to work.
You can talk with any investment advisor or your banker to set it up so that your employer’s money comes to you or your business money comes to you, but not into your account. It comes to and through your accounts right into your money market fund, your index fund, and your savings. Just have it happen automatically so you’re never in charge of that money, because if you’re in charge of it you know what you do. You spend it or you lie to yourself and say, ‘one day I’ll put it in there and it’s not earning money for you.’
Once your money is automatically placed in that investment account, that index fund or savings fund, it starts earning money for you and it’s working for you.
Most Americans unfortunately, are going to retire with little to no retirement funds, because they never set it up automatically. Personally, I feel like it should be a political thing that people should have to do it as part of employment. It’s like make sure they’re guaranteeing their future will be okay, but I know that’s very controversial and the reality, now we have such a situation of so many people retiring with no money, not because they’re stupid or bad people, because they didn’t learn to beat human behavior.
Human behavior is to delay. Human behavior is to utilize resources now. So cut yourself out of the equation, and set up the process so that it happens automatically. Money is being diverted into your own account, earning money from you, setting you up. You have to do that.
3. Third, I think it’s important for you to ask, ‘how can I add more value in the time in which I serve?’
Meaning, if your day is eight hours a day for a company, how can you squeeze in more value in that eight hours? I don’t think it’s necessary for you to work 9-10-12-14-15 hours and, I think, for most people that’s a negative thing. It causes too much stress, too much lack of sleep, so their creativity goes down and their productivity goes down. But, if you’re working, within that time you’re working, how can you do a little bit more than the next guy or the next gal? How can you hustle a little bit more? How can you see the connections between what everybody else is doing in the company or what everyone else needs in the company and serve them?
How can you come up with a new idea for your clients, for your customers? It’s about adding more value in the marketplace in the same amount of time that gets you more productive and it gets you to be recognized more for what you’re doing. The janitor, who does more than just sweep the floors, but starts asking intelligent questions around the place in which they work to discover, how can we add more value, starts getting recognized more and soon gets other opportunities.
It’s time to add more value during the same amount of time that you are currently working. Most people are working at a mediocre level, and that’s not to be judgmental, it’s just the reality of the stats, the graphs or efficiency curves. You can tell, most people are just going through the motions in the day. They aren’t adding a tremendous amount of creativity or value they’re just doing what they were told. And so, if you can go beyond that… it’s like that old saying, ‘there’s no traffic beyond the extra mile.’ If you add a little bit more extra than anyone else is doing, you’re flying out there. You’re out there and you’re standing in a world by your own. You’ve gotten to a place where so few people can keep up with you they’re not even around.
People don’t try at work as hard as we think they do. It’s negative to say that, but we can see that from every single productivity study, efficiency studies at workplaces. Most people, because they don’t like their job, they aren’t giving to their job.
But here’s the deal, what if you could teach yourself to like your job by giving more to your job?
What if you could learn to enjoy what you’re doing by thinking of new creative things to add to what you are doing? And by adding new creative things you start to get more results. By getting more results you usually get more recognition and rewards and you start to add value and eventually move on up or get paid more.
Now, in some cases that doesn’t happen, which is why I have this last point.
4. Also, raise your standards for reward.
What do I mean by that? It’s like, if you’re a top contributor, if you’re what we call a high performer… many of you know I teach a program called High Performance Academy, I hope you attend it, it’s one of the best programs in personal and professional development in the US today. I can share with you, what we know at High Performance Academy, if you’re a higher performer, if you are giving and you are not being recognized it’s time to leave or to have a very honest conversation with the people around you and say look, ‘I’m giving a lot. I feel like I’m doing great value of service here and I don’t feel like I’m being compensated enough, so I need to have a forthright conversation of whether or not it’s time for us to revisit my contract or it’s time for me to leave.’
You have to have the boldness in life like that. If you are not being rewarded for your true contribution and you have to question it, because lots of people are entitled and say, ‘I’m contributing so much.’ And you look at it like no, you’re really not, you’re contributing the same as the 15 people around you.
But if you’re really raising the bar on yourself and you’re really hustling and adding value then guess what? You deserve to be compensated. And if you’re not, it’s time to look for new places to go work. It’s time to look for new job opportunities or new employment or entrepreneurial opportunities.
Raise your standards. Raise the expectation. Raise your minimums. Raise your minimums of what you will allow in your life that is not good for you, do something that honors or respects you. Raise your minimums of what you expect out of your bank account. If your only expectation, if every month you’re like, ‘gosh I hope I’m going to have $500 in my bank account this month.’ You’re never going to become wealthy, ever! It’s mean to say that, especially when you’re there and I’ve been there. I’ve been in places where I couldn’t afford a burrito, so believe me I get it sucks when you don’t have money.
But if your only expectation is, ah you know, I hope I have $500 and every month you have $500 and you’re coasting through at $500, you’re never going to become wealthy. Because, at some point, you have to say, ‘what is that number for me that I can aspire to and work myself into?’
A lot of people who discover that six figure job, that $100,000 job, when you interview and ask them, how’d you end up at a six figure job? They all say the same thing. They say, ‘I started looking for a six figure job.’ You’re like ‘whoa!’ Isn’t that amazing?
How’d you end up in a six figure job? They started looking for jobs that were like that and they earned their way into it. They got the experiences or the results that were necessary to earn their way into it or, they just went buck wild crazy and started applying for jobs that were beyond their capabilities and some of them got lucky enough to get hired into them and that’s what happened. Sometimes to get paid at the next level you need to move your city, you need to move to another place, you need to move the employer, you need to quit, and you need to do something new.
But, you shouldn’t be afraid of doing something new that could potentially bring some new value, new lifestyle into your life experience. Sometimes you have to be bold, try new things, push the boundaries, and I think the more you do that with your career, your entrepreneurial opportunities, the way you look at money then you start to experience what we call, The Charged Life.

How Scarcity Trap Affects Our Thinking, Behavior; $, time

How Scarcity Trap Affects Our Thinking, Behavior

A Harvard economist finds there are psychological connections between the bad financial planning of many poor people and the poor time management of busy professionals. In both cases, he finds the experience of scarcity causes biases in the mind that exacerbate problems.

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RENEE MONTAGNE, HOST:

Let’s hear now about a new book that explores a major source of stress. The book is called “Scarcity” and it’s a look at what happens to us when we’re pressured with too little time or too little money. The authors say “Scarcity” actually changes how we think. NPR’s social science correspondent Shankar Vedantam explains.

SHANKAR VEDANTAM, BYLINE: Each September the state of Massachusetts asks one thing from “Scarcity” author and Harvard economist, Sendhil Mullainathan, to renew his car inspection sticker and each year this recipient of the MacArthur Genius Award does the same thing. He’s really busy, so on each day leading up to the expiration of the sticker, he tells himself he’ll attend to it the next day.

SENDHIL MULLAINATHAN: One more day of delay, I mean, what’s the big deal?

VEDANTAM: Pretty soon, Mullainathan finds himself driving around Boston with an expired sticker.

MULLAINATHAN: The sticker is three months expired and now you’re doing all sorts of stuff, like you’re driving down the street, oh, look, there’s a cop. I better make a right turn so he doesn’t see my expired sticker.

VEDANTAM: Turning the wrong way makes Mullainathan late for a meeting or late for class. Now, he has to spend time fixing the mistake, rescheduling meetings with students, playing catch-up. His next day gets even busier. Now, he definitely doesn’t have time to fix that sticker.

MULLAINATHAN: I do this constantly. Right now, I’ve got a meeting to get to. I don’t have the time to replace the sticker. Whereas, the truth is, the enormous amount of distortions I’ve now made for the last three months because of the stupid sticker add up to five times as much time as I would’ve spent just going and having it fixed.

VEDANTAM: Mullainathan recently decided to think about his behavior like a researcher would. Was he just a busy absentminded professor or was there something else going on? He thought about research in his own field. He studies the economics of poverty. Lots of studies show poor people tend to make bad financial decisions, the kind that land them in ever deeper cycles of debt.

Mullainathan realized there was an unexpected connection between his behavior and the behavior of the people he studied.

MULLAINATHAN: Just as the poor mismanage their money, isn’t it astonishing how badly I mismanage my time?

VEDANTAM: Not having enough money and not having enough time, might not seem like similar things, but psychologically, they are similar. You’re running low on something you desperately need, you feel the pinch of scarcity. Mullainathan turned to a colleague of Princeton, the psychologist Eldar Shafir. That conversation lead to the book, “Scarcity,” which they wrote together.

Just as Mullainathan was asking why he mismanaged his own time, Shafir said he was asking why the poor make bad financial decisions.

ELDAR SHAFIR: Perhaps it’s the context of poverty itself, being in that context, that brings about a very special psychology, a psychology that’s particular to not having enough. And in that psychology brings out problematic outcomes.

VEDANTAM: After lots of research Mullainathan and Shafir have concluded that when you don’t have something you desperately need, the feeling of scarcity works like a trap. In a study looking at poor farmers in India, for example, the researchers found that farmers tended to be better planners and thinkers when they were flush with cash. But right before harvest, when they were strapped for cash, Mullainathan says their brains focused only on short term goals.

MULLAINATHAN: When you have scarcity and it creates a scarcity mindset, it leads you to take certain behaviors which in the short term help you manage scarcity, but in the long term only make matters worse.

VEDANTAM: Poor farmers, for example, tend to weed their fields less often than wealthy farmers. It’s the same with being super busy. The busier Mullainathan got, the harder it became for him to make time to get his car sticker. In fact, there was a short term reward for not getting the sticker. On each day he didn’t get the sticker renewed, he saved a little time to devote to other pressing demands.

But each delay made things worse the next day. Scarcity, whether of time or money, tends to focus the mind on immediate challenges. You stretch your budget to make ends meet. People in the grip of scarcity are tightly focused on meeting their urgent needs, but that focus comes at a price. Important things on the periphery get ignored.

MULLAINATHAN: That’s at the heart of the scarcity trap. You’re so focused on the urgent that the important gets waylaid. But because the important gets waylaid, you’re experiencing even more scarcity tomorrow.

VEDANTAM: Mullainathan and Shafir think we ought to change how we think about poverty and how we think about time. When poor people and busy people run short of money or time, we tend to blame them.

MULLAINATHAN: There’s this presumption in our entire social policies here that mistakes happen because of willful negligence and I think just understanding that, yes, we need incentives to prevent willful negligence, but we also need a way to recognize that no matter how hard somebody tries, there will be mistakes.

VEDANTAM: It might be possible to reduce the impact of mistakes caused by scarcity. The poor farmer in India might need repeated reminders about weeding. One might not be enough. The minimum wage worker in America might need a couple of extra days to pay her bills instead of being slapped with a fine one day after payment is due.

For busy people, Shafir says a respite from scarcity might mean penciling in a block of time in their calendar so long term things have a chance to bubble up.

SHAFIR: One of the few things I’ve learned from the book which I try to adhere to now is throughout my day, when I have a day that’s, you know, scheduled moment by moment throughout the day, fully packed, I try to arrange a couple of half hour chunks, half hour slots that are unplanned.

VEDANTAM: If you try to make an appointment with Shafir at that time, he’ll tell you he has a meeting. What he doesn’t tell you is that the meeting is with himself. Shankar Vedantam, NPR News.

Save To Win’ Makes Saving As Much Fun As Gambling

Save To Win’ Makes Saving As Much Fun As Gambling

by Shankar Vedantam

January 06, 2014 5:07 AM
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One of the most common resolutions people make at the start of each year is to save more money. Researchers concluded if you want to help people save money, preaching isn’t gonna cut it. You have to make saving money as fun as a visit to a casino.

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As far as New Year’s resolutions go, saving more money is often a popular one. Actually being able to do that – well, we know how that story usually ends. But researchers may have come up with a winning method. NPR’s social science correspondent Shankar Vedantam, we are all ears.

SHANKAR VEDANTAM, BYLINE: Carolann Broekhuizen is a retired life insurance claims examiner. She lives in Waterford, Michigan. Whenever she has a little extra money, there are some things she likes to do.

CAROLANN BROEKHUIZEN: I do buy lottery tickets. I will buy the state raffle tickets on occasion. There are several casinos locally and I will go to one of them with friends every now and again, when I have a little bit of play money.

VEDANTAM: Broekhuizen never gets in over her head. And she doesn’t mind losing. In fact, she expects to lose money. The reason she gambles is because she enjoys it. Researchers have been studying people like Broekhuizen and they’ve come to the conclusion that if you want to help people save money, preaching isn’t gonna cut it. You have to make saving money as fun as a visit to the casino.

A couple of years ago, when Broekhuizen visited her credit union, she was told about a program called Save to Win. If she stashed some money away, she would get a shot at a grand prize of $10,000. The more money she saved, the more opportunities she’d have to win.

BROEKHUIZEN: I said, you know, why not? It’s saving for retirement. That can’t hurt.

VEDANTAM: Broekhuizen kept putting money away but just like her visits to the casino, she didn’t win the big prize.

BROEKHUIZEN: I thought it was a one-year program, to be all honest with you. And I didn’t hear anything the first year, so I assumed I did not win.

VEDANTAM: Even though she was a little disappointed, Broekhuizen says she liked the fact she could win something extra while saving for retirement. Then, a few months ago, she got a phone call out of the blue.

BROEKHUIZEN: The person identified themselves as being from my credit union. My first thought was that a check had bounced and I wasn’t real happy. And then she went on to explain that I had won the cash prize, and beyond that I couldn’t think for a while because something like this happens to other people; it doesn’t happen to me.

VEDANTAM: Broekhuizen’s Community Alliance credit union is one of several credit unions in Michigan that features the Save to Win program. It is also active in a handful of other states. Economists aren’t surprised the program is getting people to save. At the University of Maryland, Emel Filiz-Ozbay recently conducted a controlled scientific experiment into the benefits of prize-linked savings programs. She found people save more and are more willing to leave their savings untouched if saving comes packaged as a lottery.

EMEL FILIZ-OZBAY: We found that indeed people seem more patient or more willing to wait additional weeks to get more money when it is offered in lottery-like form.

VEDANTAM: The catch, Filiz-Ozbay says, is that banks in most states are not allowed to offer such programs because private institutions are not allowed to run lotteries. But she says policy makers ought to know these programs are different than regular lotteries.

FILIZ-OZBAY: Unlike the standard lotteries, the consumer is not losing the initial capital, initial principal. So what you invest is always there, you are not losing it. In the lottery, once you buy the ticket, if you don’t win the prize, money’s gone.

VEDANTAM: Back in Michigan, Carolann Broekhuizen has a theory about why she won the $10,000 prize.

BROEKHUIZEN: My mother passed away earlier in the year and I just looked up after it had a chance to sink in, I looked up and said thank you, Mom.

VEDANTAM: In homage to her mom – and the spirit of the prize – Broekhuizen didn’t go on a spending spree. She took the money and stashed it away in her savings. Shankar Vedantam, NPR News.

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How Couples Can Stop Fighting About Money

How many of us have fought with a spouse or partner about money?
We all have in some way, right?

When financial issues come up, we handle things differently due to our gender, family, upbringing, current outlook, etc.

So how do we handle this?

I saw this good video about it from Noah St. John.

Thanks

.

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