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We all know that saving is important
And it's something that we should be doing and yet overall we're doing
Less and less of it
We know what we need to do
The question is how do we do that
And that's why i'm here teteach you
Your savings bebehaor or isn't a question of how marmart are or how much well power wer have the amount we save depends on the environmental queues around us let me give you an example
We ran a study in which
In one group we showed people their income on a weekly basis
In another group we showed people their income for a weekly basis
And what we found was that people who saw their income on a weekly basis
We're able to budget better throughout the month
Now it's important
To know that we didn't change how much much people
People are receiving
We just change the environment in which they understood their income and environmental cues
Like this
This have an impso
I'm not going to share tricks with you
That you already know i'm not gna tell you how to open up a savings account
Or how to start saving come for weeretiment ment what i i'm to na share with you is how to bridge this gap from your intentions to say
And your actions are
I'm not going to know one not going the power of precommitment fundamentally
We think about ourselves ves two different ways ves are present celves and their future self in the future were perfect in the future
We're going to save a retirement
We're going to lose way
We're going to call our parents more
But we often times forget that our future self is exactly the same person as our present ent ves
We know that one of the best times to save is when you get your tax reunund
We tried an ab tax in the first group
We texit people in early february
Hopefully before they even filed for their taxes
And we ask them if get get tatarefund d percentage would you like to save
Now this is a really hard question
They didn't know if they would receive a tax refund or how much
But we asked a question anyway in the second group
We ask people right after they receive their refund
What percentage would you like to save
Now here's what happened
In that second condition
When people just receive their tax refund
They wanted to save about seventeen percent of their tax refund
But in the condition
When we ask people before they would receiile their taxes
Savings
Rates incsave from seventeen percent to twenty seven percent
When we asked in february
Why because you're committing for your future self
And of course your future self can save twenty seven percent
These large changes and savings behavior came from the fact that we change the decision making environment
We want you to be able to harness at same same power to take momoment
And think about the ways in which you can sign up your future self for something that you know today will be a little it it art sign up for an up that lets you make savings decisions in advance the trick is you have to have that binding contract number two use transition moments to your advantage
We did an experiment with a website that helps older those share their housing that ran two ads and social media targeted to the same population of sixty four year old in one group
We said hey
You're getting old
That you ready for retirement
How sharing can help in a second group
We got a little bit more specific
Is said you're sixty four turning
Sixty five are you ready for retirement
How sharing can help what we're doing in that second group is highlighting that a transition is happening all of a sudden we saw click through rates and ultimately sign up breath
Increase when we highghlight that psysylology we call this the fresh start effect
Whether is the start of a new year or even a new season
Your motivation to act increases so right now put a meeting requests on your calendar for the day before your next pert there identify the one financial thing you most want at a
And commit yourself to it the third and final trip get a handle
The small frequent purchases we've run a different different studies
And found that the number one purchase people say they regret after bank fees is eating out
It's a frequent purchase people say almost every day and is depby by al cups
A coffee
Here a bureeo
There it adds up and decreases our ability to say back when i lived in new york city
I looked at my expenses
And saw that i spent over two thousand dollars on ride sharing apps
It was more than my new york city rat
I vowed to make a change
And the next month i spend two thousand dollars again no change
Because the information alone didn't change my behavior
I didn't change my environment
So now that i was four thousand dollars in the whole i did two things
The first is that i only lked my credit card from my car sharing apps instead i link a debit card
That only had three hundred dollit among
If i needed more
So what to go through
Through whowhole process of adding a new card
And we know that every click
Every barrier changes our behavior
We are machines
We don't carry around an avoctes
Every day adding up what we're spending comparison to what we want it
But what our brains are very good at h
And we ting up the whole of wewe've done something
So i gave myself a limit
I can only use my sharing apps three times
A week
It forced me to wruit in my trasband
I got to handle on my car sharing expenses to the benefit of my husband
Because of the environmental changes
That i did so get a handle on whatever that purchases for you and change your environment to make it harder to do
So those are my tips for you
But i want you to remember one thing as human beings we can be irrational
When it comes to saving and spending and budgeting
But likely we know this about ourselves
And we can predict how will add under certain environments
Let's do that we're saving
Let's change our environment to help our future selves
The
