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HerMoney Podcast Episode 190: Why Everyone Makes Mistakes With Money (And How To Get Better!) 

Kathryn Tuggle  |  December 4, 2019

This week we’re diving into good behavior, bad behavior, and behavioral science. 

At HerMoney, we’re always interested in hearing about the psychology of money and why we make the choices we make: Why do people continually fail to take action on things that are difficult or uncomfortable for them? Why do we all talk about earning money and spending money, but not saving it? 

These are just a few of the questions that Jeff Kreisler, author, comedian, and Editor-in-Chief of People Science, will tackle with Jean on this week’s episode. Jeff is the author of “Get Rich Cheating: The Crooked Path To Easy Street” and co-author of “Dollars and Sense: How We Misthink Money And How To Spend Smarter.” (His co-author for that one is behavioral economist Dan Ariely, who you can catch in episode 85 if you missed it!) Jeff has traveled the world to talk about sunk cost fallacy, solution aversion, and all the ways in which we allow ourselves to make poor financial decisions — despite knowing that we’re doing it. He says that while we can’t change human nature, thankfully we can build systems that will enable us to use our human nature for our own good. 

Jeff says there’s a “certain sense of shame” when you feel like you aren’t making all the right financial choices in life, but not knowing what to do with your money is an incredibly common thing — not something to be ashamed of. We all have complex emotions and uncertainty around our financial decisions, but when we face those big questions, the best thing we can do is seek advice from experts, and get on a path toward making changes in our systems and environments and how we do things. 

Thankfully, there are some easy behavioral science “tricks and habits” that can help us get out of our own way and conquer our personal finances, Jeff says. One suggestion is to go through your credit card statement — line by line — with someone else and articulate what each expenditure is for. When you have to explain your spending to an objective third party, it forces you to dig deep into questions like, “Did I really need this?” Another strategy is to split your paycheck into two accounts to essentially “trick” yourself into thinking you have less to spend than you really do. “You’re basically hiding money from yourself,” Jeff says. No matter how small the change you make, the important thing is that you’re giving yourself mental nudges to make lifelong changes. 

Then, in Mailbag, Jean tackles questions surrounding HYSAs (high yield savings accounts) and where to find the best rates. She also advises a woman who is just dipping her toes into the waters of investing for the first time, and counsels a woman who is just starting her career at 45 after having worked as a stay at home mom for the last 20 years. And lastly, in Thrive, Jean dishes some real talk on Facebook’s new dating platform, “Facebook Dating,” and whether or not you should consider putting yourself out there on the world’s largest social network. 

Transcript

Jean Chatzky: 00:06 HerMoney is brought to you by Fidelity Investments. You deserve time off, your money, doesn’t learn how to make your money work just as hard as you do at fidelity.com/demandmore. HerMoney comes to you through PRX. Hey everybody, it’s Jean Chatzky. Welcome to HerMoney. You know it’s going to be a good show when your guest walks into the door and asks for a cocktail. Actually, he commented that our studio looks a little bit like a cocktail lounge, which I had never heard before, but now that I look around, I think it kind of does. In this show, we are going to take a look at all things behavior in the business world, good behavior, bad behavior, behavioral science. We’re going to be talking about the psychology of money and the choices that we all make. My guest today is Jeff Kreisler, who is a writer, a speaker, a pundit, a comedian, an advocate for behavioral science. I don’t know how many of you remember our episode with Dan Ariely when we talked about his book, Dollars and Sense How We Misthink Money and How We Spend Smarter. Jeff wrote that book with Dan and he’s in the studio with me today. He’s also the editor-in-chief of People Science, which is a platform where industry leaders can harness behavioral science insights and apply them to the world of business. Hey Jeff.

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Jeff Kreisler: 01:44 Hi. You left out one thing. I’m also very good at passive aggressively suggesting that I want a drink. You may say, I just said a looks like a cocktail bar, but underneath that was…

Jean Chatzky: 01:54 Was pour me one please. I poured you some water. That’s all I have to offer right now. We can send out… Does Seamless deliver alcohol. I think it probably does.

Jeff Kreisler: 02:04 If not, when someone hears this podcast, that will be a new business.

Jean Chatzky: 02:08 There we go. Tell me a little bit about you. You went to law school, you started writing and performing political comedy and now you’re an economist.

Jeff Kreisler: 02:19 I’m not an economist that always carries that PhD label, but now I would say I’m an advocate for behavioral science for businesses, organizations, individuals, policymakers, to use behavioral science as one of the tools in their toolkit to help solve problems. You know, I don’t know how much you want me to lay down on the therapy couch to give you too much background.

Jean Chatzky: 02:41 I want to hear it all.

Jeff Kreisler: 02:42 I’ll give you what I think is the short version, which is that I went to law school to be Thurgood Marshall or Thomas Jefferson. Those jobs were taken. I didn’t like the other options in the career. I love studying. I loved looking at how the words could create relationships, contractual relationships, personal relationships. They could create countries, they could create all these systems. How just changing the placement of a comma could alter the course of a entire civilization. In some ways. I, I love the power of words. That’s what fascinated me.

Jean Chatzky: 03:10 Are you just quoting Hamilton there or is it my imagination?

Jeff Kreisler: 03:14 No, but I will say…

Jean Chatzky: 03:16 Do you, do you know the reference that I’m pointing to?

Jeff Kreisler: 03:19 I know Hamilton fairly well, but I don’t know that I know that specific one.

Jean Chatzky: 03:23 So there’s a line in a song, that I believe Renee Elise Goldsberry, who played Eliza Schuyler… Oh no. Renee Elise Goldsberry who played Angelica Schuyler in the original production…

Jeff Kreisler: 03:38 I saw it twice.

Jean Chatzky: 03:38 Me too. I was lucky enough to see the original twice. And she’s talking about a letter that Alexander Hamilton wrote to her and he wrote my darling and my dearest, my darling, I think my dearest, I think it was my dearest Angelica, but the comma was not after Angelica. The comma was after dearest, so she took this to mean maybe she is his dearest, which I think is her biggest wish.

Jeff Kreisler: 04:08 Well I had forgotten about that, but I remember seeing that and that resonated with me. There’s someone has a great quote about genius work is something that you see and you think that part of you could have done that. Like, I never could, could’ve done Hamilton, but I had always wanted to, in my delusion, do something about like the 10 commandments as like a musical or, excuse me, the 10 amendments in the bill of rights. And anyway, so we could do a Hamilton podcast if you want to change direction here. I may have forgotten that line, but I love it. But that reflects what I’m saying. Like the power of language is what drew me to law school. It wasn’t to be a lawyer. And that then carried into when I was in law school, I started really kind of writing. I retreated into myself. I’d always have creative friends. I didn’t have as many law school, so I started being the guy that’s scribbles on the notepad and has a little tape recorder. Then I’m going to San Francisco, pass the bar there. And instead of really working, I’d start doing standup comedy. Politics was my passion, so still is. And I was, I found comedy to be very liberating. I could talk about anything as long as I was funny. And not just that. What I discovered and I think has been a through line in my career, is that comedy is a remarkably powerful communication tool to get people to listen at least and sometimes engage and sometimes take action on topics that might otherwise seem difficult to them, whether it’s politics or personal finance, whether it’s relationships, whatever it may be. That using humor is a way to sort of get at a minimum, get people’s guard down, to, it’s a way to simplify things. You know, in comedy, particularly standup, you don’t have five minutes to go on and on. You’ve got about 10 seconds to get your point across. And if you can simplify what might seem complex into that little bite size thing, especially if there’s a laugh at the end, you can get messages out there. So, it was politics for a long time and I had some success with that, led to, we’re working on some TV led to various things. And my first book, which was, well first before that I wrote for Jim Cramer’s, thestreet.com. Jim Cramer is the mad money guy.

Jean Chatzky: 06:10 Of course.

Jeff Kreisler: 06:10 Someone approached me and said, Hey, do you want to write a weekly column about business and finance news? I said, no. He said, it pays. I said, yes, I did that. That led to an opportunity to write my first book, which was a satire, make that clear called Get Rich Cheating. And it was, it came out 2009, so it was Enron era, steroids era, showbiz, our current occupant of the White House as well featured in that back then. It was a great project, a satire, led to some other opportunities, that were cool, like MSNBC. But really for me, the best was I met Dan Ariely through that. He was working on his book about dishonesty and he had me come lecture at his class at Duke. And I, at the time I was touring in this character, this sort of Stephen Colbert and meets, Tony Robbins. Like, you should cheat, right? It changes your life. And I would go to his students, his MBA students, and I would do some of my routine. I would make it so that it didn’t, it wasn’t obvious that it was a joke. And inevitably someone raised their hand be like, you know, you’re telling us like cost benefit analysis, no one gets caught. Everyone can get my millions. We should like, are you, are you lying? And I’d be like, well, what do you think? And some portion of the class would always say, yeah, you make a good point, right? We forgot about morality and ethics and we can just, so it wasn’t they’re bad people. It was just the way that money messes with our heads. And I’m going to land my short version soon. And that’s when I learned about Dan’s work. I had never been exposed to behavioral economics and it sort of had been something that I was hoping was out there, if you will. Just like, you know, traditional economics is charts and supply and demand and numbers and behavioral economics basically says, okay, we’re not gonna deny that, but let’s add on the human element. And you know, you’re in a supermarket and the milk is 10 cents more expensive than next door. Traditional economics as you go next door. Reality says you’re texting a client, you’ve got a screaming baby in your cart. Like, there’s just emotion and there’s stress and uncertainty. And when I discovered his work and that of his peers, I just was really smitten, and so we did a few projects, came out with this book as you mentioned in 2017 and since then that led to a People Science that I edit as a platform to discuss not just in personal finance, but all the different ways that this field really might have a future, to make some difference.

Jean Chatzky: 08:26 When you think about the field of behavioral economics. And I’m fascinated with the fact that even if we know the right thing to do financially, we often don’t do it. I’m fascinated by the fact that when you have more choices, you make worse choices. I mean, the list just goes on and on and on. What do you think are the most important things people need to understand about themselves in order to do a better job with their money?

Jeff Kreisler: 08:55 Sure. That’s a great question. There are two things. One is that everybody makes mistakes with money. And I think there is, I don’t know if it’s shame or just an unwillingness to talk about it that I think hinders us. We all think and talk about getting money and spending money but not saving, investing, insurance, those invisible things. remember I read a survey that men were more willing to talk about whether or not these Viagra than how much they save for retirement. And it’s like, what’s more embarrassing? Your teeny tiny little savings account, you know? And, and it makes sense, like if you, I’m sure many of us think about our own lives if we don’t talk to our neighbors about their retirement or college funds. So I want people to understand that you not knowing what to do with your money is a common thing. There’s no sense of shame. And to talk about it is a great thing. You know, I even talked to wealth advisors sometimes and it w and they are great with their clients, but bad with their own money because there’s like all this emotion and uncertainty when we make financial decisions. And so my first thing, essentially it’s okay to not know what you’re doing and to seek consult or a conversation. The second is, I don’t believe we can really change human nature, but I think we can understand human nature so that then we can build systems and environments and tools to use our human nature for our own good instead of having it be used against us, right? Like if we spend too much of our discretionary spending, instead of like hitting ourselves over our head and be like, you gotta be a better person. Oh, you’re fine person. So put in place something that will help restrict your discretionary spending. Something that’s automatic, like something that recognizes your fault, your human nature, but gets you to a better outcome.

Jean Chatzky: 10:29 I had a discussion with Kathryn Tuggle, who does our mailbag, runs HerMoney.com from an editorial standpoint, about the enjoyment that we get from shopping. And we were, she and I, talking personally, you know, I like it. I know that when I get something on sale, I get this feel good rush of, of dopamine and it, it does light my brain up like a Christmas tree. It’s nice to know that I can’t change that. I mean it would be nice to change it I guess, but it’s also nice to not have to blame yourself for the fact that this is just something that is wired in you and you can help yourself by playing mind games. You can help yourself by putting constraints, artificial or not, in place, but you’re not going to change biology.

Jeff Kreisler: 11:23 Yeah. I don’t want to step too far above and make a big social commentary, but I do feel like there’s a certain sense of, again, maybe shame isn’t the right word, but something like that about like if you’re not making all the right financial choices, there’s something wrong with you and I think that that’s unhealthy. It prevents us from making changes in our systems and environments and the way we do things.

Jean Chatzky: 11:43 What did you learn in your work with Dan about the best ways to use this new science to help ourselves get out of our own way?

Jeff Kreisler: 11:53 The thing that I learned from Dan was probably a further appreciation for the scientific method. That there are these principles that have been discovered and tested through behavioral science and other fields. But there’s no like silver bullet that is very context driven that if you have an idea, whether it’s a personal finance or organizational issue that you should test it and you should, you know, see if it works. That not every solution applies to everyone. There are some very specific personal finance ideas and sort of tricks and little habits that I would recommend to people.

Jean Chatzky: 12:29 For example?

Jeff Kreisler: 12:29 For example, two come to mind. I’ll see the first is to sort of assess your own spending going through your credit card bill with someone else and explaining each choice. Now quick caveat that someone else shouldn’t be like a spouse or someone who’s emotionally invested in your spending, but like just having to articulate why you spent these things is going to help start you on a path to recognizing your decisions or recognizing those, you know, monthly cable bills and you never watch TV, like start seeing some patterns.

Jean Chatzky: 13:03 What is it about explaining it to somebody else to a sort of objective third party that’s different than going through the logic in your own mind?

Jeff Kreisler: 13:12 I don’t know if there’s a scientific term for it, but just having to express it and articulate something A, you’ll hear yourself if you’re talking nonsense and and B, it forces you to sort of really dig deep. I think sometimes we might look at something we do, a behavior we have and if we just started assessing in ourselves, in our mind, we might skim over it. And having to take the moment to articulate, take these seconds that it takes for me to speak makes a difference. And particularly when I think about credit cards, they are so good at harnessing what we call it, the pain of paying or the absence thereof. We don’t pay attention to paying with a credit card. It’s a little piece of plastic and not only that, they, they’re aggregators that we have 100 or 150 charges per month, so we just sort of don’t pay attention to any one of them and if we go in and having to speak them, each forces us to recognize each spend. It’s going to force us to evaluate that decision a little bit more closely.

Jean Chatzky: 14:07 I’m living that in real time. I’m in the middle of an experiment, my new assistant, Becca is right out of college. I’m twice her age, well not quite, but almost twice her age and, no, I actually am twice her age.

Jeff Kreisler: 14:20 Is this where I have to tell you, I thought you were her sister?

Jean Chatzky: 14:21 No, not at all. She’s not here to defend herself, but I am. I actually am more than twice her age that that’s a little bit scary. Anyway, we’re in the midst of this experiment where she has to use only cash for a week and I am allowed to use no cash for the week.

Jeff Kreisler: 14:39 Interesting.

Jean Chatzky: 14:39 So cause I always walk around with cash and you know, if it’s less than a couple of bucks, that’s what I spend. But it’s very hard to tip I’m discovering.

Jeff Kreisler: 14:48 Without cash?

Jean Chatzky: 14:48 Without cash. Yeah.

Jeff Kreisler: 14:51 That’s another great tool that people, if they find that that, that they spend too much on a credit card using cash, it makes it more salient. Right? We’re more connected to that spending. Again, the pain of paying, we feel it a little more strongly when we pay cash than credit card or Apple pay or something like that. So it helps us think about those decisions more closely.

Jean Chatzky: 15:09 What was your second trick?

Jeff Kreisler: 15:10 It goes back to this idea of discretionary spending that I sort of threw out there. Like if you’re someone who finds that you’re, you’re, you’re spending all the money that you have to spend every pay period or month you can take your, this is assuming you’re in a position where you get like a regular paycheck from your job, you can split your pay and put it into a separate savings account. I’m not talking about like the 401(k) and all that, but just a separate regular savings account and then some into a$ checking account because we typically assess how much we can spend by our checking account balance. And now we have that in the palm of our hand with our phones and we know all the time. So you in a sense trick yourself, you hide money. So you might, you know, if you’re, if you have $400 a week, let’s say on discretionary spending, but in your checking account, you only show 200 you’re going to not spend $400, you’re going to, you’re going to sort of tell yourself, Oh, I don’t have that much to spend. And then other $200 in the savings, it’s still your money. It’s there if you need it or want it, but at least sort of puts that barrier there. It’s, it’s almost like, you may have people that, will eat a giant bag of chips completely, but if that, those bags of chips are broken into individual smaller bags, each time you have to open it, it’s a new moment to stop and think. I.

Jean Chatzky: 16:21 It’s a reminder. It’s a reminder. I want to talk a little bit more about your notation in the book that the person we trust most is ourself and talk about why that might not be such a good thing, but before we get there, let me remind everybody, HerMoney is proudly sponsored by Fidelity Investments and we’re here to remind you that you work too hard to let your money just sit in savings, whether you’re new to the workforce or approaching retirement, Fidelity will help advise you throughout your career and beyond so that your money is working just as hard as you are. It all starts with a yearly financial checkup and an understanding of what you own and what you owe. From there. The folks at Fidelity will work with you to evaluate your investment options, determine ways to grow your savings and keep you on track to reach your life’s goals. Start demanding more from your money today at fidelity.com/demandmore. We are talking with Jeff Kreisler, critically acclaimed author, comedian, and behavioral science guru. I alluded before the break that you have a line in the book about the people we trust most are ourselves. The person we trust most is ourself and that’s not an especially good idea. Why not?

Jeff Kreisler: 17:40 Well, I think it goes back a little bit to why you mentioned the shopping and the dopamine. Like any financial decision, there’s a lot of uncertainty and anything we can latch onto that provides a sense of certainty or tells us we’re making the right choice makes us feel good. In your case, the sales case, like when you get a sale price, it feels like, oh, I made the right choice.

Jean Chatzky: 18:00 It feels like I’m really smart. Right? That’s what it feels like.

Jeff Kreisler: 18:03 Exactly. Now, trusting yourself is another way to do that. You know, what tends to happen is in the spending sense, like we might come across like if there’s a spend that we do over and over again, let’s use the Susie Orman $5 latte example.

Jean Chatzky: 18:18 Let’s!

Jeff Kreisler: 18:18 I don’t know where you fall on that.

Jeff Kreisler: 18:20 I am happy to tell you I wrote a column for HerMoney entitled The Effing Latte Is An Effing Metaphor.

Jeff Kreisler: 18:26 Thank you. I think we’re on the same team. Then one of the ideas about like a regular spend like a latte is that you might go and the first time you buy that latte, say to yourself, is this a good decision? And you might say, sure, it’s a good decision, but the next day when you show up there like thinking about stuff is hard. We humans don’t want to spend a lot of time thinking we want the easy route. So instead of thinking, is this a good decision? You’d be like, oh, what did I do yesterday? Oh, I thought about it and I decided it was a good decision. So you do it again because you trust yourself. Like there’s no one we trust more than ourselves to have made the right decision. And then the third day it becomes even simpler and then these things become automatic. It’s why, again, looking towards solutions, we often tell people, you know, there’s the little decisions, don’t sweat those. There’s the big decisions, the houses, the mortgage, the college, like do sweat all those details. And then there’s the repeated decisions. Don’t sweat them every time, but once in awhile, step back and check yourself like your cable bill, your phone bill, your daily coffee consumption. What ends up happening is that essentially we get self anchored. Anchoring is this idea that in shorthand, once we get attached to a price for something, we sort of believe that’s accurate. However, it’s suggested whether it’s like the manufacturer suggested price on a car, right? Or it’s just what we’re used to paying and we can self anchor. And what’s really particularly powerful about anchoring in general is Dan did an experiment. You may have heard about something you called arbitrary coherence. Essentially how we anchor can be arbitrary, probably easier if I sort of very quickly explained like he would have people just think of the last two numbers in their phone number, right? These are random numbers and then he would say, okay, would you pay that much money for this bottle of wine? Let’s say something that they didn’t know a price to. And then they would say, okay, now tell us what you would pay for that bottle of wine. And what they found is that people with numbers last two numbers in the top, like 75 to 99 their final answer, how much they pay with it was often three times as much as people with numbers 1 to 25.

Jean Chatzky: 20:32 Wow.

Jeff Kreisler: 20:32 Because they just anchor to these higher numbers. Completely arbitrary. It wasn’t like, here’s one bottle of wine, here’s a second to compare it to. It was like when your phone number and a bottle of wine and that shows the power of anchoring and then when you layer on top of that, the fact that none of us like to admit that we’re stupid or that we don’t know the answer, we’d rather think that we have made the right decisions. It becomes even more powerful.

Jean Chatzky: 20:59 Kate White, who was a guest on this show a few months back, noted that anchoring can be really, really powerful in the context of salary negotiations that we’re all told not to throw out the first number, but actually if you throw out the first number and it’s a high number, you can sometimes get the person on the other side of the table to anchor to it and to pay you more as a result.

Jeff Kreisler: 21:22 Yeah, it’s the art of negotiation is very complex, but to that extent, I think there’s some truth in that. I mean, I, in my anecdotal experience has been similar that whoever starts first, that’s where the negotiation starts.

Jean Chatzky: 21:36 What do you think the future of society is going to look like with behavioral economics in it? Is it gonna make us better?

Jeff Kreisler: 21:47 I hope so. I’ve spent most of my career on top of a donkey charging at various windmills. So I recognize that sometimes delusions drive me, but I really do believe that as individuals and organizations and policy makers look for that little nudging bit of difference that little alpha investors might call it. They’ll look to human behavior and human reality as a means to get people on groups into better outcomes. You know, there’s been this data revolution, I would call it, over the last 10 or 15 years. We have tons of data, but we’re finding Fitbit doesn’t change behavior, right? Just having the data doesn’t really change the outcome. And so my mind that data science has got to be married to the people science. It’s part of the reason the website has a name, not a commercial, but happens to be cool. And so I believe that willing to take the data and say, okay, we know everything that Jean is doing, online. Sorry, but they do. What motivates Jean? What incentivizes her? What do we know about human behavior that can help her get to a better place? Not just help her get shoes she might like, but like save more for her family, choose better healthcare options, etc. So I hope that these tools are used for the greater good and I believe they will be. Richard Sailor, who’s another leading figure, he won the Nobel Prize, talks about, you know, the three rules of, of ethical nudging, you know, the, and one of them has that it has to be designed with that the nudgees best interest at heart. And while it’s nice, and I wrote a book about cheating, it’s nice to assume people would be good. I actually believe it will be true because there’s such a negative reaction to being misled or to being deceived that particularly at an organizational level, you could try to sell someone a more expensive car and get a couple extra thousand dollars out of them by using the little tricks and you might make one sale, but that person’s not coming back or you could think about longterm relationships and treat them right. And I think that extends to every sort of transaction and organization and relationship, too.

Jean Chatzky: 23:59 On the People Science website since you brought it up, there is a section called Cool Stuff. It’s got articles about how behavioral science can be applied in unique parts of our lives. In travel, in food. Tell me about the coolest of the cool.

Jeff Kreisler: 24:14 Coolest of the cool. I think that I’m fascinated by children. I have two young kids and just as a a way to study, um, behavioral science that they’re not yet as, as affected by social forces and all the things that happen to us. Adults, like a child, you can say, hey, try to ride this bike. Just really try it and they might fall but, they’ll keep trying. A 30 year old probably is not going to try to ride a bike. They never done it. So where I am really fascinated about where the future might be in a, in a fun way is just looking at children and how they react to these different behavioral principles, how they react to the idea of recognition, of purpose and meaning and incentivizing. I’m fascinated by the growing acceptance of the fact that money is not the most motivating force in the workplace. That there are other more important things, whether that’s, you know, a reward travel is more powerful than the equivalently priced check. Or it’s just how do you create an organization of people that are filled with purpose and meaning in their work. And, I think the kids that just didn’t strike me as a really fun, area to, to see that… Kids don’t hide their emotions. And I think that’s really cool.

Jean Chatzky: 25:32 Amazing. Jeff Kreisler, the book is Dollars and Sense co-written with Dan Ariely. The website is People Science. Thanks so much for coming in.

Jeff Kreisler: 25:41 Thanks for having me.

Jean Chatzky: 25:42 Absolutely. And we’ll be right back with Kathryn and your mailbag.

Jeff Kreisler: 25:50 We’re back. HerMoney’s Kathryn Tuggle has joined me in the studio. Hey Kathryn.

Kathryn Tuggle: 25:54 Hi.

Jean Chatzky: 25:56 I always wonder if I am the only one who’s so taken with all of this behavioral finance research. I just think it’s so interesting how we know the right thing to do. We could tell another person the right thing to do and yet when it comes to actually doing it ourselves, it’s just hard.

Kathryn Tuggle: 26:22 It is hard. Why we do what we do is such a fascinating topic to me, particularly around finances and around money.

Jean Chatzky: 26:29 And food, you know, and all of it. I mean anything where there is a course of action that you know that you are supposed to follow, right? You are supposed to exercise three days a week. You are supposed to only eat X number of calories a day. You are not supposed to still be nibbling at all the leftover Halloween candy that you’re tricker treaters didn’t take. Right. I mean we know we know all of these things and yet it’s just, I guess it’s willpower maybe? I don’t know, maybe it’s attention span? It’s just really hard to keep ourselves on the straight and narrow.

Kathryn Tuggle: 27:09 I think where there is potential to fall victim to the seven deadly sins that we do. Right? Gluttony, sloth, envy, I think there’s a reason why they are the seven deadly sins.

Jean Chatzky: 27:20 They’re just M&M’s.

Kathryn Tuggle: 27:24 I mean I think we’ve always been pulled in the direction of doing what feels good.

Jean Chatzky: 27:30 Yeah. We want to help ourselves. We, you know, we want to help ourselves do the right thing. Have you been seeing the ads for that diet app? Noom. They’re all over the place. Right. So I put it on my phone because I, I just wanted to look at it and I wanted to see what sort of behavioral triggers they were evaluating because I’m interested in how that might be applied in the world of personal finance. So I was a terrible, terrible Noom student. I mean it just started to get on my nerves immediately. And then I realized this morning I used it for approximately nine days. I’ve been paying for it for approximately 90 days. So I went and I canceled my subscriptions, which is just another reminder that if you think you don’t have subscriptions that you’re not using, you are probably wrong.

Kathryn Tuggle: 28:18 Absolutely.

Jean Chatzky: 28:19 All right. On that note, what do we have in mailbag? While I make fun of myself today.

Kathryn Tuggle: 28:23 Our first letter comes to us from an anonymous listener. She writes, hello Jean. I have about $35,000 in hidden money that I have set aside for over 10 years now in case I need it for an emergency, I know what you’re going to say that I shouldn’t keep it from my husband, but it’s a long story. We have a mixed family with my kids, his kids, my money and his money. Anyway, I thought long and hard about it and decided to keep it this way. My dilemma, I’ve been keeping the money and an HYSA which only offers me 1.9% interest. The chances that I’d need this money sooner rather than later is about 50/50 so I don’t want to move it anywhere I can’t access it if the need arises, but that interest rate seems so low. Is there anywhere else I should look to find a better interest rate? I’ve considered a CD, but any ideas you have would be greatly appreciated. Keep up the excellent work.

Jean Chatzky: 29:12 So first of all, you are not going to get any judgment from me. HerMoney as I think you probably know by now is a judgment free zone. We are very, very proud of that. I think we all think long and hard about the decisions that we make with our money and many of them are fraught and complicated by the relationships in our lives. So you do you, you do what you need to do. Unfortunately I don’t think I can offer you a better interest rate though either. HYSA you mean a high yield savings account and if you’re getting 1.9% interest today, you’re doing pretty well because with the couple of interest rate reductions that we’ve seen from the federal reserve, interest rates on these accounts have been dropping. You can keep tabs with them on sites like bankrate.com, HerMoney actually runs tables of savings account rates, so you can find the best savings account rates, but I wouldn’t tie it up. I mean, I don’t think 50/50 odds are odds that you want to play with and if you do need this money sooner rather than later and you put it into a CD, you’re going to have to pay the penalty to break that CD in order to get the money out. So bide your time, accumulate a little more if you feel like you want to. And if you can at any point isolate a chunk of this money that you then say, this is for my longer term goals, then you can take that chunk and you can invest it while you’re continuing to maintain the liquidity with the rest.

Kathryn Tuggle: 30:47 Fantastic. Our second letter today comes to us for an anonymous listener, nearly finished grad student and finish is spelled with a P H and a D.

Jean Chatzky: 30:57 Ah, congrats!

Jeff Kreisler: 30:58 She writes, I really enjoy your podcast and I have been learning more about money along with my friends. We are all avoiding our eliminating debt and moving towards financial independence. With the recent episode on Bitcoin with Kiana Daniel, I thought I detected a smidge of fear in Jean’s voice. This is almost exactly how I feel about investing in the stock market. I understand that the numbers work and then even with the very best online savings account, I’ll never be able to save as much as I could if I invested in the market. At the same time, the market sounds like a complete game and a totally made up crazy talent at times. Do you have tips for how I can get over this discomfort? I feel like I’ve heard every podcast and read every book, but I haven’t heard anything that can help me get over that hump of distrust. S.

Kathryn Tuggle: 31:41 So I’m totally busted. I am scared of Bitcoin. I am. Cryptocurrency. It does scare me. I feel like it is the Wild West. I feel like it’s the great unknown and that if you, and I think I said this on on the episode that we did with Kiana on cryptocurrencies, I think I said if you have a chunk of your portfolio, 5%, and you want to take a flyer with that by putting it into Bitcoin or investing in a Broadway show, be my guest, but be prepared to lose that money. I don’t feel the same about the stock market. The stock market has a much longer history. And over that history we have seen that although putting your money into one stock may be very risky, two stocks may be very risky. When you buy a diversified portfolio that consists of many, many, many stocks all at the same time, different kinds of stocks, big stocks and small stocks and growth stocks and value stocks and domestic stocks and international stocks and some bonds to just round out your mix. You actually minimize that risk. You don’t minimize it necessarily in the short term because the markets do go up and down and up and down in the short term, but longterm, historically the markets have gone up. Here’s what I want you to do. I want you to try it and I want you to try it with a very small amount of money to get your feet wet. Take $100 or whatever you can afford. If $100 is too much, take $50 take $25. Open an online account could be with Fidelity, could be with another firm, could be with a roboadvisor and put that money into a total stock market fund or an S&P 500 fund and just keep doing it over time. It may go down short term, but as you continue to put money into it, it will go up longterm and you’ll start to feel more confident about the fact that you are doing well, that you’re able to do this and you’ll start to get your sea legs. Women are interesting. We like to know the answer to all the questions before we make a move. And when it comes to investing, that is really, really dangerous because it means that we lose all of this valuable time. So just go ahead and do it. And as you get your PhD, if you get a teaching job or a different kind of job and you have the ability to participate in a retirement plan at work, just do that too. And over time you will start to feel more confident and that this is less of a mirage and much more of a real thing.

Kathryn Tuggle: 34:46 Great advice. Last up, we have a letter from Ellen who is in need of some career advice. She says, when I came out of college, instead of entering the workforce, I immediately became a stay at home mom. I now find myself at 45, recently divorced, and looking for a real bill-paying job for the first time in my life. My degree is in public relations, but I’ve never actually used it, so I’ll be shooting for an entry level position. I’m fine with this, but I literally have no idea where to start. The vast majority of career advice I’ve found online for women of my age is about how to get back into the workforce after a break, not how to enter the workforce for the first time. What are some tips for applying to my first job and standing out from the slew of recent college grads I’ll be competing with. Should I address my situation in my cover letter? I’m in need of advice for how to come off as savvy and hireable and finally get my career going.

Jean Chatzky: 35:38 Ellen, I have to say, I think that your experience being a stay at home mom will prove hugely valuable in the workforce. You have learned patience, you have learned resilience. If you didn’t learn that, dealing with your kids, you certainly learned it coming through a divorce. And so I have absolutely no doubt that you have plenty to offer the workplace. I do think you need to address it, but I don’t think you need to apologize for it. And I would say go back and take a listen to episode 173 of this podcast. It was an interview with Addie Schwartz who is the founder of a company called Reach Higher. It is all about getting hired in the workforce after a break and then to give yourself a boost of confidence ’cause we’ve been talking a lot about confidence, take a quick course that will boost your tech skills. You will be using different technological skills now in the workforce than you would have when you came right out of college. And so if you don’t feel good at things like managing email and managing Excel, if you’re going to need to do that, although I don’t know that you would in public relations, but see what kinds of tech criteria are showing up in the ads for the public relations positions that you are going to be applying for and then take a course that will give you those because at least you’ll be able to answer those questions full of confidence. I think you’re going to be just fine.

Kathryn Tuggle: 37:16 What should her resume look like? How should it be structured?

Jean Chatzky: 37:20 Oh boy, I wish my husband was here to answer that question. Eliot is a career coach and is great at resumes. I think your resume should be on a page. I don’t think it should be any longer than a page and I think you probably want to lean on a skills-based resume rather than an experience-based resume and look at the skills that you have accumulated through life, the skills that you have accumulated in your volunteer positions, dealing with your kids, dealing with your community, add those to your education and I think you’ll have. a good resume to get going.

Kathryn Tuggle: 38:02 Amazing. Good luck.

Jean Chatzky: 38:03 Yeah, absolutely. Please write us and let us know how it goes. And if you’ve got a question for us, you can send it to us mailbag@hermoney.com. And in today’s Thrive, if you read about Facebook launching its new dating platform and were horrified at the thought of being somehow matched with a creepy friend of your uncle’s who you met at that barbecue one time five years ago, it is time to breathe a sigh of relief. ,Facebook dating actually requires you to set up a separate profile from your main one and you won’t encounter any of your Facebook friends on the platform or even friends of friends if you adjust your settings accordingly. But if you’ve secretly been pining away for one of your Facebook friends, the dating platform comes equipped with a secret crush feature where you can anonymously add up to 9 of your Facebook friends and indicate your interest. If they join the platform and add you back as a crush, then you’ll be matched. And if they don’t, they’ll never know what you’ve really been thinking every time you love their new profile picture. The cost for Facebook Dating is free for a basic profile and around 20 bucks per month for a premium membership. Thanks so much for joining me today on her money. Thanks too the Jeff Kreisler for the great conversation. I am definitely walking out of the studio today with a renewed resolve to try to keep some of my promises to myself. If you like what you hear, I hope that you’ll subscribe to our show at Apple Podcasts. Leave us a review because we love hearing what you think we want to thank our sponsor Fidelity. Our music is provided by Track Tribe and our show comes to you through PRX. Tune in next week, we’ll be back with economist Allison Schrager. Her book is An Economist Walks Into a Brothel. We’ve got a very interesting discussion about risk. Thanks so much for listening. We’ll talk soon.


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