← 10% Happier with Dan Harris
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- [00:01]
Dan Harris
Wondery subscribers can listen to 10% happier early and ad free right now. Join Wondery in the Wondery app or on Apple Podcasts. This is the 10% Happier podcast. I'm Dan Harris. Hey hey, how we doing everybody? Today I'm talking to a professor from the Wharton School of Business about how to increase your financial security by rewiring your mindset and also your decision making processes when it comes to money. Dr. Wendy de la Rosa is an Assistant professor at the Wharton School at the University of Pennsylvania. Her research has been published in the Journal for Consumer Research and the Proceedings of the National Academy of Sciences. Her TED talks have been viewed over 7 million times and she serves on the board of both Code for America and Propel. Long way of saying she's an impressive person. In this conversation we talk about psychological and technological tools for taking control of your finances, how to get a handle on small frequent purchases, the relationship between your environment and your finances Financial shame How your parents relationship with money impacts you as a grown up. Something called the GI Joe fallacy, which I'll let her explain 10 financial questions to ask your romantic partner and how to eliminate the taboo of financial conversations. This is part one of a two part series we're running this week on Money. Coming up on Wednesday, I'm going to operationalize Wendy's advice by holding a public conversation with two of my close friends, the great meditation teachers, Sebene Selassie and Jeff Warren, about our respective money neuroses. But today, of course, it's Wendy De La Rosa and she's coming up right after this. Before we get started, you might have heard me mention our free New Year's Challenge, which we've got going on over@danharris.com, i just want to let you know that it's not too late to join and if you become a paid subscriber, you'll get to chat with me about all the resolutions many of us are attempting to make this time of year. You'll also get exclusive transcripts and cheat sheets for every one of the podcast episodes, so come check out what we're doing. I should also say that I'm doing some live AMAs, meaning ask me anything sessions. And the final one for the New Year's Challenge is coming up on January 12th. But if you're a paid subscriber, you're able to tune into my live check ins all the time. So Sign up@danharris.com to join the party. The Happier Meditation app has introduced a new course called Even now Love A Prescription for Connection Led by the renowned teacher Joseph Goldstein, this timely course offers practical tools to pause, breathe and reconnect even when it feels impossible and a turbulent world. With fresh perspectives on relationships and self compassion, practices that actually work. It's a powerful way to approach the new year with love. Download the Happier Meditation app today and explore even now Love I love Staying in Airbnbs. Last year a bunch of families got together and we had an Airbnb near a ski lodge in upstate New York. It wasn't even snowing yet.
- [03:18]
Wendy de la Rosa
The point was just to hang out.
- [03:19]
Dan Harris
And we all spent the weekend together in this house. It was incredibly cozy and fun. As my friend Zev sometimes jokes, it's really cool to get out of the dinner industrial complex and instead of just spending time with your favorite people over, you know, this kind of regimented two hour meal at a restaurant, which can be super expensive. When you get a house together, you're really, really hanging out and it's a great way to get to know other people's children. My son was so happy during dinner he got up from the table just.
- [03:47]
Wendy de la Rosa
To dance, which is always a good sign.
- [03:50]
Dan Harris
Long way of saying I like Airbnb. Maybe you want to go somewhere warm over the winter while you're away, you could Airbnb your home and make some extra money toward your tr. Whether you could use a little extra money to cover some bills or for something a little more fun, your home or spare room might be worth more than you think. Find out how much@airbnb.com host.
- [04:12]
Wendy de la Rosa
Nice.
- [04:13]
Dan Harris
When it comes to finding the best financial products, have you ever wished someone would do all the heavy lifting for you? Take all that research off your plate? I definitely have. And the good news is that with NerdWallet's 2025 Best of Awards, that wish has come true. The nerds already did the work for you, reviewing over 1,100 financial products, things like credit cards, savings accounts and more to bring you only the best of the best. I'm just not great at paying attention.
- [04:41]
Wendy de la Rosa
To things like this.
- [04:42]
Dan Harris
When we get into the details, especially if it involves math, I'm out. And so the fact that the good folks over at NerdWallet are doing this work for us, just deep bow man hat tip. Check out the 2025 Best of Awards today at NerdWallet.com awards.
- [05:00]
Wendy de la Rosa
That's NerdWallet.com awards Dr. Wendy Delarosa, welcome to the show.
- [05:09]
Jeff Warren
Thanks Dan. Happy to be here.
- [05:11]
Dan Harris
Happy you are here.
- [05:12]
Wendy de la Rosa
I'd love to start if you're cool with it, with your origin story and how and why you got so interested in the psychology of money and personal finances.
- [05:23]
Jeff Warren
Well, I think it's a simple answer. We just didn't have it. So when you don't have it, you always think about it. But the real answer is, you know, my family immigrated from the Dominican Republic to the States. We lived in the Bronx, and it was a challenging time financially. And I like to say that money was always sort of the hidden person at the dinner table because we were constantly talking about it or our lack of money. And I think it's very common for immigrant children to just be involved in the financial decision making of the household, because you need somebody to talk to the bill collectors on the phone, right. As you're pretending to be the adult, or to translate all of the bills that come to the house. And so I think at an early age, I was just thrown into the world of financial decision making, and I didn't know that that's what I was going to study, right. 35 years after the fact. But it always stuck with me. I was always sort of enamored and interested into, like, why are we making these decisions? And why is the environment set up in this way, and how can I make it better?
- [06:36]
Wendy de la Rosa
Do you think it would be safe to say that you really turned or transmuted this early childhood stress and anxiety into something sort of meaningful for yourself and the world?
- [06:46]
Jeff Warren
I find my work to be incredibly meaningful now, but I think I would be lying to you if I said that that was always the end goal. I think as I was growing up, the end goal was I just need to get out of the situation and get my family out of the situation. Right. My mom was working two jobs as a hotel worker, and so she had Tuesdays and Wednesday afternoons off and Saturday and Sunday mornings off. Like, it was just, like an insane way of life. And my answer to that as a, you know, early teenager was, well, I'm gonna go work in finance, right? And. And that's what I did. I had great mentors, and I was a private equity investor for a long time. And so I didn't really think about the psychology of it all for a long time or how do I help in a systematic way of my community. Obviously, I was helping my community, but I just. That wasn't what my life's passion was. I think, until I could afford to ask myself the question, what am I really passionate about? I think oftentimes we romanticize this idea of following your passions, but For a lot of people, that's a question that you have to be able to afford to ask yourself. And it was then when I had that financial freedom where I could say, oh, let me take a step back. What is it that I really want to do for the rest of my life? How do I want to leave my mark into this world? And that started that journey.
- [08:11]
Wendy de la Rosa
Yeah. I think you just gave a more nuanced answer and I appreciate the honesty. From my perspective as an outsider who just met you over zoom, it does really seem that you have turned something, a source of anxiety and struggle and stress and suffering into something pretty incredible. Even if it wasn't a direct path, even if as a 10 year old you didn't make the, you know, affirmative decision to do that and the path took you through Wall street, it's still the path.
- [08:38]
Jeff Warren
That's right. That's fair. That's fair.
- [08:40]
Wendy de la Rosa
Okay, so let me ask you a little bit about, like, what you've learned. And I'm going to start, and maybe this is the wrong place to start. I'm just going to start with this phrase that I find interesting, which is the GI Joe fallacy. Is that in terms of describing what you've learned in the course of your research and studies, is that a decent place to start?
- [08:58]
Jeff Warren
Yeah. So the GI Joe fallacy is fundamentally this. Oftentimes we know what we need to do to change our situation and yet we don't do it because it's hard. The systems around us really shape our decision making, particularly our financial decisions. And we can't sort of fool ourselves into thinking that I'm just going to will myself out of this situation because that oftentimes leads to this internalization of financial shame. Right. It turns into, I am not somebody who makes mistakes with my money or I have made mistakes with my money. It then turns into, I am just someone who's bad at money. We turn it into this like, fundamental trait. And the reality is that our minds are beautiful brains. We're just not designed to deal with the complexity of our financial world. Right. Even the bright and Smart MBAs still have a hard time conceptualizing compound interest taking even a step back. Right. Because we often tend to think about investing. But when you think about the fact that the average person on the way to work sees thousands and thousands of ads, companies that are optimized and have entire teams to try to get you to spend as much money as possible as quickly as possible. Right. It's a story that's not a David versus Goliath Story. It's a story that's a David versus thousands of Goliaths. And I think we have to start there. We have to start with that recognition that a lot of the times it's our environment. And if we want to change our decision making, we have to change our environment rather than thinking about changing ourselves. And that, I think, is a paradigm shift.
- [10:42]
Wendy de la Rosa
Okay, so that seems like a key insight, that if we want to change a decision making around money, it's not enough to rely on willpower. We have to change our environment. I guess my question is, what does that have to do with G.I. joe?
- [10:55]
Jeff Warren
The reason why it was named G.I. joe fallacy was because in the 1980s, you know, the cartoon series G.I. joe?
- [11:01]
Wendy de la Rosa
Oh, yeah.
- [11:02]
Jeff Warren
It ended with the line, now, you know, and knowing is half the battle. And that's why I call it a fallacy. No, actually, knowing is not half the battle. Like, people know what they need to do and the battle is still there, right? Like, people know fundamentally what are the steps that they need to take to get from where they are to where they want to be financially. More than half the battle is the environment. Let me give you a few examples. Many, many people that I talk to, they want to improve their health in some way. And when you ask them, okay, well, what do you need to do to improve your health? People kind of know by and large what they need to do. Well, I need to, like, move a little bit more. I need to change my eating habits in some way. I need to do X, I need to do Y. And yet they don't do it, because today is never the right day. In fact, we ran a study of about a thousand U.S. households, and we asked them, like, do you want to be financially secure? Shocker. Everybody wants to be financially secure, right? And then we said, okay, great. What are steps that you can take in the next month to improve your financial security? And it turns out that 92% of households can list three or more actions that they can do in the next month to improve their financial security. Right? So things like asking for a raise, opening up a savings account, going and figuring out my, you know, username and password to my retirement accounts and consolidating them. All of these things that people fundamentally know and yet. Right. We're not financially secure. Because right now it is always the most difficult time to start. Right? This is not a knowledge gap. And I think oftentimes we infantilize the world of financial decision making by saying, if I can just increase financial education, if I could just teach you If I could just teach you. If I could just teach you, that's going to change your behavior. And the sad reality is that the evidence doesn't really support that. There's a beautiful study that I love by John lynch and Daniel Fernandez and they did what it's called, like a meta analysis, right? They reviewed over 200 papers trying to understand what's the impact of financial education. So if I get you in a room and I teach you how to budget and I teach you how to save, what happens to your actual financial behaviors? And it turns out the financial education programs account for just 0.1% of the variance in your financial behavior. So not zero, but very little. The most predictive things are things like numeracy or your ability to do math. Like, can you do math? Well, right. Whether or not the information that you're getting is just in time. So I'm teaching you how to save. And right at the moment in which you're getting a paycheck, like those things are more important, which means I'm changing the environment rather than just sort of teaching you all of these things and hoping that you remember it for the rest of your life. Every single time you have a temptation, every single time you have a problem. Like it's just so much to ask of one person.
- [13:59]
Wendy de la Rosa
And so it's really just to get back to your core thesis. It's not about relying on education or willpower. It's about understanding how the environment impacts your financial decision making and to the best of your ability, changing your relationship to the environment.
- [14:16]
Jeff Warren
Yes. So we have two paths to change something. We can either change ourselves or we can change the environment. And changing ourselves is really difficult. Changing our environment is actually a little bit easier. And I think if more people adopted that, we can solve more problems. Like, for example, as I think about our retirement system, it really puts the burden and the emphasis on an individual who is not a financial expert, who is not a financial planner to go out and figure out and estimate how long do I think I'm going to live? What is my most optimal investment allocation? What is my most optimal percentage? Where we could have just gone back and thought about making pensions more widely available. Instead of defined contribution plans, thought about defined benefit plans. We could adopt policies like other countries have adopted, which is like everybody has to save X percentage. We can focus on these environmental solutions rather than now. The world in which we're in is that we know that close to half of Americans aren't invested in the stock market at all. Right? Like $0 whether it's retirement, mutual funds, whatever. If that is the case now, we're trying to, like, educate people. We're trying to incentivize people to start. We're trying to do all of these things that are just really, really hard when we can just change the environment and just make it easier for people to start investing, or we can just make it easier for people to start saving. Another example is, like, universal financial accounts. Countries like India, everybody has a bank account. And yet in the U.S. here, we are constantly dealing with a sizable portion of our population that's unbanked and underbanked for lots of different reasons. But these are solvable problems. Once you start to understand that, it's much easier to change the environment than to try to change person by person by person.
- [16:19]
Wendy de la Rosa
I get that, as you say, behavior change is not an educational pursuit. It's an environmental one.
- [16:25]
Dan Harris
However, what can an individual do to.
- [16:28]
Wendy de la Rosa
Change their relationship to the environment? Because as an individual, I don't have much agency when it comes to these macro issues you're talking about.
- [16:36]
Jeff Warren
I think the first thing. And we can talk about all these specific environmental changes that I think everybody can do, but the first thing is to just internalize this belief that, yes, I play a role, but the environment plays a very large role. And I'm in a system that oftentimes is set up for me to fail. And I just want people to let that sink in for a moment because there is such an internalization of blame and shame that paralyzes people. We don't talk about our financial situations at all. Like, I'm much more likely to know my friend's, like, dating history and all the drama that comes along with that, their politics and all the drama that comes along with that. But do I really know if my friend has paid off their student loans or what their credit score situation is? Like, we talk about sex way more than what we talk about money. And that is crazy to me. Like, you know, there was one statistic. There was, like, almost 40% of engaged couples did not know how much their partner earned. Like, you are about to marry somebody and hopefully do that for life at least. Like, that's what most vows say, right? And you don't know their financial situation. Like, we have created so much taboo and shame around finances that we just need to break that down. And when we break it down, I think then people can start leaping into action. Because if this is this big boogeyman, of course I'm going to keep my head down in the sand and just ignore and when we ignore, all, the problems become worse. Let's release ourselves of that financial shame, and then we can start thinking about. All right, well, what specifically can I do, Right? In the context of partners, I like to say, go on a financial date. The first step is figuring out, are you and the other person that you are thinking about going through life with or are going through life with? Are you on the same page? Do you have the same goals? Does retirement look the same? And in your mind, and if not, why? When I started dating my husband, I think lots of people do this, right? You start to say, what are your likes? What are your dislikes? Right? You figure out everybody is like, wants and needs. But one of the things I was like, okay, great. Like, so now let me show you my credit score. You show me your credit score. Let's see how we could build this future together. And at the time, I'm pretty sure he thought I was insane. But as we went through that exercise, he noticed things on his credit report that he didn't even know were there, right? So that, I think, is like, the first thing, like, create financial dates both for your partners, but also your friends and your coworkers, right? Like, that's the way in which we get information. Now, the second thing is to identify what is the issue that you know, you need to work on, right? No one else knows your financial situation better than you, right? So, Dan, like, I don't. I don't know if you're like, man, I finally need to get on saving for taxes. Because independent contractors, like, that's a hard thing or whatever it is, figure out what is that for you and love yourself enough to create a financial health day. When we're sick, we take a sick day. When we need a mental health break, we go on vacation, right? Nothing can happen without you dedicating the time to take a financial health day. And if any employers are listening, we know from data and research that workers who are not financially constrained, who are not stressed, they are more productive at work. Give people a financial health day. Allow them the time to actually consolidate all their 401ks. Give them the time to actually go to their bank and switch banks so that they no longer are with a predatory bank. We need the time. And then the third thing, after you figure that out, is to then recognize what is the best environment. Assuming that I'm always gonna fail, right? Let's just liberate ourselves. Like, let's not. It's okay. We know that we're not perfect. We know that we're not always imperfect, but let's just assume that I'm always going to fail. What would that environment look like for myself? So for me, right. Oftentimes, like, I love going on certain websites, and then it turns out that then they follow me throughout all of social media. Right? Like, the same shoes follow me on my Instagram page. And then when I'm reading the New York Times or the Wall Street Journal, I got the same ad. And it's just so hard, right, to say no the hundredth time. Right. Because you're just tracking me all over. So I have ad blockers installed throughout my entire mobile life. Right. I have just opted out. And now, granted, am I missing some, like, new and awesome product that may make my life better? Sure. But I have set up an environment for myself understanding that I'm not perfect. And that's okay.
- [21:18]
Wendy de la Rosa
I like that. Are there other examples of ways we can tweak our environment?
- [21:21]
Jeff Warren
Yes. So I'll give you another example of a psychology of the brain that we often think about as being negative or bad, which is that in the future, we're gonna lose weight. In the future, we're gonna call our mothers more. In the future, we're gonna be better parents. In the future, we're gonna save for retirement. We think about ourselves as the perfect versions of ourselves in the future. Right. I'm my own personal Beyonce ten years from now. Right. And oftentimes we think about that as a negative. We partnered with a company called Digit to run an experiment to turn that on its head. So what did we do? Digit, at the time was this, like, financial app that took small amounts of money from your checking account and moved it into your savings account. Right? So people who were on the app had a goal of saving. But we know that there are golden times in which it's easier for people to save. So tax time. 85% of tax filers get a tax refund on average, about $2,500. That's a big chunk of change when 40% of Americans can't come up with $400. Right? Like, you're getting $2,500. And so here's what we did. We split the population into two. Half of the user base got a text message that said, hey, Dan, you just got a tax refund. What percentage of it would you like to save? And people could text any number from 0 to 100. Digit would make the calculation. Move that money from your checking account into your savings account. In the second condition, we asked people early in the tax season, hopefully before they've even filed their taxes. Hey, you might get a federal tax refund if you do. What percentage of it would you like to save? Now that second question is harder. I don't know if I'm going to get a tax refund. I don't know how much, but because in the future I think I'm going to save more money. People wanted to save more money in that second condition than just when they received the money. And so what did Digit do right? When eventually you received your federal tax refund, that percentage that you said it automatically transferred it from your checking account into your savings account. And we looked three months out, 85% of the savings were still in the account. We increased the saving percentage by roughly double by just changing the timing of the question by saying, today, you don't have to lose anything today, but in the future you're going to get some money. What percentage of it would you like to save? And because in the future I'm perfect, of course I'm going to save more. And those are ways in which we can set our environment. Most of us are paid on a weekly or a bi weekly basis. And so that means that there are months where we naturally get another paycheck. Right. We don't always have to wait for tax refund time. Take a look at the calendar, you know, in advance when that comes in commitment, you know, when the extra paycheck comes, I'm going to save x percent. Or if you receive bonuses, right? Like there is a standard cadence to bonus time. You know when that's going to come. Ask yourself today, what percentage of it would you I like to save and create that commitment.
- [24:20]
Wendy de la Rosa
Harness the somewhat beneficial lie that in the future you're going to be perfect to improve your behavior.
- [24:28]
Jeff Warren
Yes. And there are programs like Save More Tomorrow by Dick Thaler and others who do this in the retirement savings space. They ask not do you want to increase your retirement allocation right now? They say do you want to opt in to whenever you get a raise, we'll increase your retirement allocation by 1%. It's been hugely successful, right? Because yes, like people know that they should. They just don't want to do it right now. But I can do it. My perfect future self can do it in the future. Right. And so these are the ways in which we are setting up our environment to help us succeed.
- [25:04]
Wendy de la Rosa
Thaler, by the way, was on this podcast, so I'll drop a link to that episode in the show Notes. There are a bunch of things you've said in the last Couple of minutes that I want to follow up on. Let me just start with the problematic aspects of our environment as it pertains to our financial decisions. From your point of view, what are the most noxious aspects of the culture that are degrading our capacities to make good decisions about our money?
- [25:28]
Jeff Warren
My gosh, you're asking me like, who's the biggest devil in the room?
- [25:33]
Wendy de la Rosa
So many as you think. I'll just note that I've read that you've pointed out some of the tricks that credit card companies use, like gamification and installments and scarcity. So that that's coming to mind.
- [25:44]
Jeff Warren
Yeah. So I think the most heartbreaking thing are all of the societal pressures that people hear all of the time that it's you, you, you, you, you. I think there's like a certain nefariousness there when you know that it's the environment but you're blaming the person. And so you mentioned credit card companies. I think oftentimes there is so much evidence right now that young people are particularly susceptible to overspending on their credit card. Our brains are not fully developed until we're 25 years old on average. So giving a 17 year old and 18 year old a tool when they're in college that they can't fully understand where all the temptations are high. And by the way, the consequences of mismanaging that first credit card are extremely high down the line. I think for me that's like pretty nefarious, right, because you're taking kids that don't have income who are in a financially constrained situation, by and large, and almost just creating the perfect storm to set them up to fail, right? To just destroy their credit scores. So I think that's one, I think the second piece, by and large, and I'm not naming any particular retailer, right, like we all need to access goods and services, but I think when the environment is created that you have to do this now or it will forever go away. Like these countdowns on, you know, shopping websites or, you know, they tell you the number of other people who are looking at this item right now, not the number of other people who are like buying the item, but like the number of other people who are looking at this item right now. Or, you know, again, sort of saying, I'm giving you this discount, but it's only valid for the next 65 seconds. Like we know that when people are resource constrained, when they feel like social pressure, when they feel scarcity of goods and time and resources, we end up making different decisions and I don't understand why we allow this. Right. Like, I should be able to make a purchase and decide whether or not a product is a good fit for me without all of this external pressure. And, you know, if we were in a world where most Americans were financially well off, then maybe we can have a different conversation. But I think all of the data suggests that we're not growing our middle class. Like, we're just not setting up people for success. And that's not just an income issue. That's also a just like an expense issue.
- [28:19]
Wendy de la Rosa
Thank you for that. The other thing I wanted to follow up with you on is you talked earlier about the taboo around talking about money. Do you have any sense of why we've arrived at a world where people are much more comfortable talking about sex than money?
- [28:33]
Jeff Warren
Yeah. Well, this is obviously in a US Context. There are cultures where it is completely a topic of conversation at the dinner table to say, how much money do you earn? And how much money do you earn? And no one will bat an eye because it's total normal conversation. Right. So I want to preface this by saying that this is in a U.S. context. I think it's because we internalize success and failures as a personal pursuit. We tend to think about our lives as sort of this like, individualistic endeavor. And so if everything is an individualistic endeavor, and obviously that comes from like our founding, but if everything is an individualistic endeavor and my financial success is also an individualistic endeavor or my financial insecurity, it's all on me. And then it feels really awkward when you have that point of view, to have a conversation with somebody that you know is not doing well because you are assuming that the reason why they're not doing well is because of their personal choices. Right. Not necessarily because, as we talked about, Right. The sort of the environment that they, they were in, and obviously everything is a combination of the two. I'm just making the point that we've gone too far the other way. And so I think that's my going hypothesis. Because if it's so, you know, if it's only because of me, then why am I having this conversation? Like, why have a conversation in the first place? I just want to talk about a little bit of why this sort of tabooness can be so problematic. Obviously, in the world of income disparity across genders, like the inability to discuss wages or at least have a good sense of what is the market rate for your work, that's really harmful to a subset of the population. Right. They just like, tends to negotiate differently. And so, like, that doesn't help close the gender gap in terms of income, if that's something that people care about. The other thing is, I think it leads to a lot of undue suffering. If you look at people who go through bankruptcy, they have been struggling financially for years, right? This is years of people managing the impossible, right? Trying to pay their bills when clearly their income just cannot support that. And by the way, one of the number one reasons why people go into bankruptcy are typically divorce or a health issue. I think we often tend to think about bankruptcy as, oh, someone just went on a shopping spree on their credit card. But those are not the top two issues. My income got cut in half because I got divorced or whatever it is, or because of our healthcare system. Right. I now have a lot of healthcare bills. And when you think about that, you ask yourself, why is someone struggling for years trying to crawl out of a hole that clearly, like, four years ago, I could have told you that this is an insolvable problem unless, like, your income materially changes. And it's because it feels like a personal moral failure because we've internalized it so much, because we've made it taboo so much, because we don't talk about it. And when we don't talk about it, then you don't hear other people saying, you know what? I struggled with this, too. I had to consolidate my debt. You know what? I struggled with this, too. Here's the financial advisor that I called. Or, you know what? I struggled with this, too. This is how I consolidated my credit card debt. When we don't talk about it, we then can effectively problem solve or at least get a sense of what are the options that we have on the table.
- [32:03]
Wendy de la Rosa
Yeah, this is something that just comes up so often on this show as a recurring theme among the hundreds and hundreds of guests that we've had on here, which is the disutility of shame at how it really gets in the way of tackling problems.
- [32:19]
Dan Harris
Coming up, Wendy de la Rosa talks about 10 financial questions to ask your romantic partner. How to get a handle on small, frequent purchases, and why it is so important to talk to your friends about money. As some of you may know, exercise is a significant part of my life. I don't think we need to overdo exercise, but the evidence is very clear that consistent exercise has all sorts of benefits for your brain and the rest of your body, not to mention your.
- [32:49]
Wendy de la Rosa
Psychology and your relationships.
- [32:52]
Dan Harris
Which is why I'm happy that Anytime Fitness Fitness is a sponsor of this show. Anytime Fitness has all the equipment you need to reach your goals along with expert coaching to help you optimize your personalized training, nutrition and recovery plan. I have found personally working with expert coaches to be really helpful in my own fitness, so expert coaching is incredibly important. Anytime Fitness gets that you train for your life to be a stronger, more confident, more badass version of yourself. They get it because that's what they're all about. They're here with the expertise you need when you need it to hit your milestones and truly live better, longer. At Anytime Fitness, you get more than machines. You get a personalized plan in gym and in app coaching, support and a welcoming community. Get started@anytime fitness.com this show is sponsored by BetterHelp. What do you want your 2025 story to be? Every January brings you 365 blank pages waiting to be filled in 2025. Maybe you're ready for a plot twist. Or maybe there's part of your story you've been wanting to revise. Life isn't about resolutions that fade by January. It's about picking up the pen and becoming the author of your own life. Think of therapy as your editorial partner in this process, helping you write new chapters and create the meaningful story that you deserve to live. I have benefited enormously from therapy in my own life, and I really do think of the therapists I've worked with, including the one I'm working with now, as my editorial partners in this process. And I've been thinking a lot about what I want out of this current year. A lot of it involves the status quo. I love doing this show, and I love danharris.com, but I also have other goals, like finally finishing my book. So I'll be talking about all of this with my therapist. If you want access to a diverse network of more than 30,000 credentialed therapists with a wide range of specialties, check out BetterHelp. You can easily switch therapists anytime at no extra cost. Write your story with better help. Visit betterhelp.com happier today to get 10% off your first month. That's betterhelp. H-E L p.com happier the happier meditation app has a new course. It's called Even Now A Prescription for Connection. It is taught by Joseph Goldstein and others, and it invites you to pause, breathe, and choose love, even in life's messiest moments. With tools to strengthen connection, rethink relationships as a lab for love, and build self compassion, it's a useful way to approach the new Year with clarity and care. You can download the Happier Meditation app and check out Even Now Love Today.
- [35:24]
Wendy de la Rosa
Just picking up on your recommendation that we talk more forthrightly, especially with our romantic partners, at the very least, about money. You kind of mentioned it, but you said a lot more that I wanted to let people know about. You actually have a great list of questions that I just want to read out loud and just so that people know the questions that they can consider asking their romantic partner. And I would imagine you could, even if you're well into your marriage. This is, it's not too late to start this discussion. I'll read the questions and then maybe you can pick up on any of them that you think might be worth, you know, dwelling on further. But here they are. There are 10 questions. What are your long term financial goals? How do you measure your financial success? What's the one thing you wish your parents would have done differently financially? What's the best piece of financial advice you've ever received? What is a question you have about money that you've always wanted to ask somebody? About what percentage of your income do you spend on housing? How would you deal with a large unexpected expense? Are you currently saving money for retirement? Do you and your partner set a financial budget for your home? Have you ever successfully negotiated a pay raise? How did you do it?
- [36:28]
Jeff Warren
When we crafted those list of questions, we were thinking about this very famous article from the New York Times, 36 Questions to Fall in love. And it was really through this lens of saying, you know, those questions are designed. The 36 questions to fall in love are designed for you to get to know someone deeper. They're designed for you to get to know someone's inner workings. And yet none of those questions had anything about money. So how are you ever gonna fall in love with somebody without ever talking about money? Like that to me was just so surprising because, you know, I alluded to earlier that I think when I was growing up, money or the lack of money was sort of always the sixth person at the dinner table or whatever. There is probably no major life change that happens in the US that doesn't impact people's financial well being. If you get married, that changes your finances. If you get divorced, that changes your finances. If you have a kid, that changes your finances. If you get sick, that changes your finances. If you have a mental health breakdown, that changes your finances. If you start a new job, that changes. If you move, if you buy a house, like all of these life changing events that happen to us, the underlying person that's right. There is, like, your finances. And we go through great lengths to pretend that it's not there. And so again, when we were crafting this list, I was sort of just struck and thought to myself, you can't really fully know a person and understand their inner workings without understanding, like, how did your parents manage money? Because clearly that has some influence on people, right? Whether they want to follow it or run away from what they saw as a kid. And so that's what we try to do. And really, the questions are not meant to be judgmental in any way. They're meant to. To be a source of connection, right? They're meant to be a source of, I want to get to know you better because I love you or I want to learn to love you, and I want to get to know you better. And so that's our hope. The one thing I will say is, don't spring this on somebody like, you know, like, just like you would have just, like, spring up any other uncomfortable conversation with somebody, like, put it on the calendar, have a bottle of wine, or, you know, cook dinner and create the mood that this is about connection, right? That this is about us creating a space together. And I encourage people to do this with friends. So a few years ago, I used to invite my friends over to just talk about money, like, what are you struggling with right now? And it was so impactful because as we grew up in our careers, right, some of the questions were about, well, how did you negotiate a raise? Or, you know, how did you negotiate this bonus? Or I'm thinking about changing my job. Here's what. Or can I really negotiate a rent agreement or a lease? Like, how can I do that? What strategies did you use to. As we've grown up in our careers, it's like, hey, I'm thinking about sitting on a board. What should my involvement be? How much time should I dedicate to this? What equity should I ask? Right? There's all of these questions that now, because we've created an environment where we completely know that it's okay and we encourage it, it's been great. We share mortgage documents, right? Like when we're negotiate when we all independently bought houses, right? Like, hey, here's what you can negotiate. It's not just the apr. It's not just the lending fees. You can negotiate with the title company. Here's what you could do. Here's what I paid. It has allowed for a fuller friendship, because I cannot have a full friendship if I don't fully know what you're going through, right? Like, if someone's really struggling, trying to pay down their student loans, and that's taking up a lot of their cognitive bandwidth. And I don't even talk about it. Like, how can I ever be a good friend to you? Like, you wouldn't see your friend bleeding and just completely ignore it and just pretend like they're not bleeding out. Right. And just carry on? Like, we wouldn't do that. And so I encourage people to not do that in the financial realm. I think it's unloving.
- [40:47]
Wendy de la Rosa
I think you make an excellent case. I totally agree with you. I guess my only question is just, it seems easier to me to have this talk with a romantic partner, even a prospective romantic partner, than it does with my friends. I still think it's a great idea to have the talk with my friends. What recommendation do you have for, you know, how can we begin this conversation with our friends given that many people may have bought into the taboo and may share the shame and discomfort?
- [41:14]
Jeff Warren
So I'm gonna push back on this a little bit. Dan, so how long, like, if I ask you to think about, you know, your three good friends, how long have you known them, do you think? On average?
- [41:24]
Wendy de la Rosa
Okay, so I have really close friends where this wouldn't be a problem at all. I was more thinking of, like, the intermediate friends.
- [41:31]
Jeff Warren
Okay. All right. So do you talk about your intermediate friends about sex and politics?
- [41:36]
Wendy de la Rosa
Yeah.
- [41:37]
Jeff Warren
Okay, interesting. So here's what I would say and think if you are feel comfortable talking to your intermediate friends about sex and politics, you should also feel comfortable talking to them about money. And I think one of the best ways in which we can encourage vulnerability is always to show vulnerability ourselves. Right? So here's like, a bad tactic. Right? Hey, Joe, it looks like you are struggling with money. What's going on? Like, it's like, okay versus man. You know, something that's really on my mind right now is that, I don't know, I'm making this up. Laura and I are thinking about whether or not we should send our kid to private school or public school. We just don't know if we can justify the cost because of X, Y, Z. Like, how have you all dealt with that question? Right? Like, starting the conversation yourself and opening up to vulnerability is one of the best ways. Just like, how do you get somebody to tell you a secret? You tell them a secret, Right? Right. Like, it's. It's one of those same things. And I don't know that we have to have these, like, separate tiers.
- [42:43]
Wendy de la Rosa
So one of the best pieces of advice that I often hear when people are talking about vulnerability or being honest and self disclosing as a way to develop deeper relationships, which of course are probably the most reliable source of human happiness. One of the best tips that I've heard, and I believe you just said it, is to make an experiment, take a risk, make a little step and see how it goes with somebody. And might open the floodgates or they might shut down, but you'll have information.
- [43:11]
Jeff Warren
Yeah, I think that's right. Take a little risk, just like you said. I think because people think about money so often, like on average people check their bank accounts multiple times a week. It's just type of fight for lots of people. And things that are top of mind are just bound to come out if we allow them to come out. You know, I'll share. I recently had a miscarriage and it was.
- [43:36]
Wendy de la Rosa
Oh, sorry.
- [43:37]
Jeff Warren
Thank you. It was devastating and emotional and as soon as I told somebody, hey, I'm going through this. So many other people in my circle then felt comfortable to disclose that they also went through it and then they shared their strategies with me about how they, how they grieve their loss and they made my loss, I think a little bit easier because then I can pick and choose like, this worked for my friend, but it doesn't really work for me. Or like, oh, this is how they did it. And it allowed for that no longer to be a taboo because I was like, this happened to me and that's a little risk. I agree with that.
- [44:18]
Wendy de la Rosa
Just to say again, I'm really sorry that happened to you. And my wife and I, she had a miscarriage before we were able to have our first child. And it's incredibly painful and not talked about enough. And your story reminds me of. I'm generally anti cliche. I can't even remember the words of this cliche exactly, but I like it, even though I'm generally anti cliche. But it's something like a sorrow shared is half the sorrow and a joy shared is double joy. That seems to have played out in your case on the sorrow part a hundred percent.
- [44:48]
Jeff Warren
Like we are social creatures. It's by design. Like we're part of that family. And I think we have to recognize that we have to be social across like all of our domains in life. Right. Like I said, when we're going through a tough time from a health perspective, we call upon our friends. When we're going through a tough time from a relationship perspective. Right. Like we all have our friends that we Dial to complain about our significant others. Let's not pretend about our finances too, right? And that's sort of what I hope people take away from this now with the pretending. I don't want people to just stop there, right? Like, we have to take that leap into action, right? It's just like, okay, we can talk about this all day long now that I have this information, but how do I then structure my life in a better way? And so I'll give you sort of one more example. Well, I can give you many examples, but I'll give you one example of something that we may not recognize influences our financial decision making, but really does, right? So right now there's this huge movement, or a very large movement, I should say, trying to get lower income people to get paid more frequently. And so, for example, like, people can get paid every day or at the end of every shift or multiple times a day. Your Uber drivers, for example, they can get paid up to five times a day. And at a surface, you're like, yeah, why should a lower income worker float a 0% loan to a large employer? Like, that makes no sense. And if we were just robots, I would agree with you. But what we find across, like a series of studies is that it changes the way in which we think about our money. So when I get paid every day or that high frequency compared to every week or every two weeks, people feel like they have more money even though we're just earning $2,000 a month or $4,000 a month or $5,000 a month. Right. Even though our earnings are exact, if I got paid more frequently, I feel a little bit richer. And so what's the consequence of that? Well, that means that I'm more likely to spend on the margin. So it's not that people go out and buy a new tv, right? It's that they say, you know what? I can afford to eat out today, I can afford to treat myself today. And that adds up. So ultimately, you're more likely to spend on bank fees. You're also more likely to overdraft. And this is what I mean, when the environment has a huge impact on our behaviors, right? Like, most people won't necessarily be able to say, yeah, you know, because of my payment frequency, that is why I decided to not cook at home today and eat out. No, like, it's so hard for our brains to make those connections. But when we understand that every aspect of our income, right? Whether it's the level of income, how I earn income, and like the timing of when I Earn my income, that changes how I feel about my money. Then we understand that also then changes my decisions. And we talked about nefarious players. I think some of the most nefarious players are people who charge lower income workers for the access to getting paid early. Right. Oftentimes it's like 299. And when you do the math on somebody making 15 bucks an hour paying 299 every day just to access their paycheck early, it's worse than a payday loan. So you know, that's another person in that room. As we talked about people who are not on my nice list just to.
- [48:28]
Wendy de la Rosa
Pick up because you do have a lot of tips and I think now is the time to really dive into them. Are you saying that we should ask our bosses not to pay us every day or that we should ask them to pay us monthly? Or is this a conversation we should be having with our employer?
- [48:40]
Jeff Warren
So now more than ever people have more flexibility of choosing their payment frequency. We often thought about payment frequency as something that was just, that just happened to us and that is no longer the case. Like Amazon workers can choose their payment frequency. Walmart workers can choose their payment frequency. Like those are our two largest employers. Right. And so what I recommend to people is to say, just like with anything in life, when we have too much access to anything, that tends to lead to bad decisions. And so I'm not advocating that there is never a need for liquidity. Yeah, rent is due on the 1st and I don't get paid until Friday. That's a real concern for most people. But I would recommend for people to limit it. Let's just say once a month. Right. Like try to tell yourself this is something that's there for liquidity, not something that's there for me every day because it's gonna impact your spending. Right. Most people are trying to manage self control and liquidity. So use that for your payment frequency as well. And do not, do not, if you can avoid it, pay these fees. Like they're just, they're just worse than a payday loan in a lot of ways.
- [49:53]
Wendy de la Rosa
Duly noted. And just picking up on something you referenced in passing. In the midst of all of that and drawing a line under it, one of your big tips for saving is to get a handle on small frequent purchases.
- [50:03]
Jeff Warren
Yeah. So it's interesting. There is like such a tie between financial well being and our health. We know that like financial well being is an antecedent to your health. When people are financially stressed, there's a direct Link to, you know, cardiac arrest, et cetera, et cetera. Even like people who experience income volatility, there are some great studies recently showing that if you experience income volatility, you're less likely to have quality sleep, you're more likely to report being stressed, Your likelihood of having a negative cardiac event increases. But I say all this because food is one of these items that when we ask people, what are some of the expenses that you regret the most, the number one thing that often comes to mind is food. Man, I shouldn't have spent so much money eating out. Or, man, I shouldn't have spent so much money at the bar. And then when you ask somebody, okay, like, you want to treat yourself, something good happens to you. The number one thing we do is go eat out when you ask them. Once people are feeling financially constrained, the number one thing that they do to restrict their spending is to restrict their food expenditures. Like, food is one of these very frequent small purchases that it's like death by a thousand cuts, right? You know, there's no doordash, right, that's gonna fundamentally break down your finances. But they aggregate over time. Those are the types of expenses that are really hard for people to fully understand the financial impact of. Why? Because our brains just have a hard time compounding and adding and thinking about time series data. So as one of the suggestions that I have for people is, if this is you, if you know that delivery apps are the thing that is just killing your budget, right? Or maybe you don't know that. Maybe you have to, like, sit down and actually tabulate it. But if. If that's to you, do a little experiment. And here are some quick tips. You can go cold turkey, right? You can delete the app altogether. That may or may not work so well. Or instead of linking it to your credit card or your debit card, right? Where there's never a natural stopping point, link it to a prepaid debit card of $100. So whatever amount you think is suitable for you to spend in a month. Why do I say this? Because think about how annoying it is to try to input a new credit card number into an app, right? It will become a natural stopping point for people because you're increasing a barrier to spend. Once that debit card is done, that debit card is done. And so that's what I mean. That's another example of saying, set up your environment to help you. Set up your environment to help you, right? And this is the thing. No one else is coming to save you. No one else is coming to set up your environment. There's no one else who is coming to have these hard conversations with you. You have to love yourself enough, right, to take a financial health day. Open up your DoorDash app or your Uber Eats app or your Grubhub app, and take the time to link a prepaid card instead of your credit card. Like, all of these things take time, but prioritize yourself enough to. And to do that, you have to love yourself.
- [53:23]
Wendy de la Rosa
That's great. Let's keep going with your tips here. Another tip for saving is to focus on one goal at a time. Can you say more about that?
- [53:31]
Jeff Warren
Yes. So there's been a great experiment by Dilip Sooman and Chima, and one of the things that they've shown is that, look, we can all try to focus on multiple savings goals at a time. So, for example, I can try to save for retirement. I can try to save for my emergency fund. I can try to save to buy a new car, et cetera, et cetera. Or I can focus on one goal at a time. For example, like, let me just focus on my emergency savings fund. They ran that experiment getting some people to list out all of their savings goals and save as much as they can and split it across the, let's just say the five savings goals. And for some people, they prioritize one savings goal at a time. And what they found was that, on average, people were more likely to save and save more when they were focused on one savings goal at a time compared to multiple goals at a time. Why? Well, there's a couple of reasons. Like, we just have limited cognitive bandwidth, right? Like, just because we're beautiful humans, we can only focus on so many things at one time. But the other thing is because our brains are so amazing and we want to have a positive view of ourselves, it turns out that if I make progress on one savings goal, I kind of give myself license to not make as much progress on all the others, or at least double count that progress. You're like, well, you know, I saved $100 for my emergency savings fund to, like that. That also counts for, you know, my auto fund, et cetera, et cetera. It's almost like when we expect income, right, we tend to spend it, like, three times over, right? When you think about a bonus, you elaborate on all the ways in which you're going to use that money. And so people end up, on average, saving less, right? Total dollars going to savings accounts were lower when you had multiple savings accounts. So if you have, like, all these goals. Just start small, right? Focus on one savings goal at a time. I want to save for my emergency fund or you know what I'm really working on my house renovation fund or I'm really working on saving for a car or I'm really working on finally opening up my529 account for my kid. I hear that all of the time. It's like, yeah, I know that I should be saving for college, but man, it's just so hard to do. Just focus on one savings goal at a time and take it slow, right? In the long run, at least what we know from data is more effective.
- [56:03]
Dan Harris
Coming up, Wendy talks about some more practical financial tips for the new year and how your parents relationship with money impacts you as a grown up. It's resolution time and we all know that resolutions can be diabolically difficult. Habit change is hard. One of the best ways to make a resolution stick is to make it easy. If you lower the bar, you're much more likely to do whatever it is your goal is. One of the best ways to make it easy is to make it automatic. Which brings me to one of our sponsors today, Acorns. Acorns makes it easy to start automatically saving and investing so your money has a chance to to grow for you and your kids and your retirement. You don't need to be an expert. Acorns will recommend a diversified portfolio that fits you and your money goals. You also don't need to be rich. Acorns lets you invest with the spare money you've got right now. You can start with $5 or even just spare change and you don't need a ton of time. You can create your Acorns account and start investing in just five minutes. You don't need to feel like financial wellness is impossible. Acorns gives you small, simple steps to get you and your money on track. Basically, Acorns does the hard part so you can give your money a chance to grow. Head to acorns.com happier or download the Acorns app to start saving and investing for your future. Today, paid non client endorsement compensation provides incentive to positively promote Acorns. Tier 3 compensation provided investing involves risk. Acorns Advisors LLC and SEC registered investment advisor. View important disclosures@acorns.com Happier it's a new year and Whole Foods Market is the place to jump start your wellness journey. Shop for high quality ingredients, organic produce, no antibiotics ever, meat and more. My family and I are powerful shoppers at Whole Foods Market. We get a huge percentage of our household goods from Whole Foods. And I really like the fact that you can think of Whole Foods as a kind of partner as you plan your wellness routine in the new year. They have high quality standards. Whole Foods Market bans more than 300 questionable ingredients from all the food they sell. And they ban more than 150 ingredients from all supplements they sell. Plus, there are so many organic options, you'll find 41,000 organic products across the store. It's always great when a brand that my family and I are using anyway asks to be a sponsor of this show. We live pretty close to a Whole Foods Market and we love it. So glad to have them as a sponsor. Just to say in closing here, terms apply to all sales. Pickup and delivery make Whole Foods Market the home of your wellness routine.
- [59:03]
Wendy de la Rosa
You are just a font of practical wisdom. So I'm going to keep going down this list I have in front of me. Another of your tips for saving is to use transition moments to your advantage. What does that mean?
- [59:16]
Jeff Warren
All right, so by the way, I love that introduction. I'm going to ask you to walk around and just introduce me as a fountain of wisdom to all my colleagues and friends. So here's the transition moments, like we all experience it and we all know it. So, for example, January 1st, we think that we're going to be somebody fundamentally different on January 1st than December 31st. Right. New year, new me. Like, our motivation to change, to enact new goals is high. When we look at new downloads of saving apps, they peak at the beginning of the year. And so I want us to think about how can we harness that, not just in the new year, Right. Where people are already sort of motivated to do things, but also to think about other transition moments. So, for example, you're 34 turning 35, or you're 45 turning 46, or you're 59 about to turn 60. What financial goals do you want to accomplish this year? Right. So using your birthday as sort of this transition moment, we worked with a company called Silvernest. It's this great company that works with elder homeowners who need additional income and companionship. Right. And so they rent out their room to another person and it's sort of a win win. Right. They get additional income, the person gets reduced rent. And oh, by the way, one of the biggest predictors of long term health is the number of meaningful daily interactions you have with another person. Right. So now you no longer have two people living in a lonely life, but as you can imagine, they have to get people into the platform Right. They have to convince somebody to open up their home to someone else. Like that's a hard ask. And so we ran a couple of experiments with them running different versions of their ads, saying, one, hey, you're getting older. Like have you thought about health sharing versus hey, you're 59 turning 60 or hey, you're 64 turning 65 or you're 63 turning 64. And it turns out that they've received higher click through rates when we're highlighting these transition moments, because whenever we highlight that there's a transition moment, we instinctively think a change needs to happen. Right. So we talked about the new year, we talked about birthdays, even as we're thinking about a new month. Right. So we're about to start November, put on the calendar, like, here's the things that I want to do at the beginning of the month. We can create these transition moments for ourselves so we don't always have to wait until January 1st to finally download that financial app.
- [61:55]
Wendy de la Rosa
Yeah. I believe psychologists refer to this as the fresh start effect.
- [61:59]
Jeff Warren
My colleague, Katie Milkman.
- [62:01]
Wendy de la Rosa
Yes.
- [62:01]
Jeff Warren
And all of her work.
- [62:03]
Wendy de la Rosa
Yes. And she, Katie's been on the show. So you talked about that app, hypothetical app that you might download when you feel you have a fresh start. Another of your savings tips. And you've talked about this a little bit, but maybe there's more to say here is to use tech to your advantage.
- [62:17]
Jeff Warren
Yes. Look, I think lots of people are super excited about technology and AI and its potential to save cancer. And I am on that bandwagon. Right. I lived in the Valley for many, many years. I think we also have to recognize, though, that in the realm of financial decision making, most of the incentives in place are not to help you save more, but to help you spend. Right. So it's not that companies are not going to use AI or it's not like they're going to make it harder for you to part with your money or that they're going to make checkout processes harder. It's going to become easier for us to pay. Right. You can now pay with your palm, you can pay with your eyes, you can pay with your face. You can do all these things that we know minimize the pain of payment. And so by and large, and this is research that Chris Bechler and I put out, when you think about how AI is going to impact the marketplace, most of the time we think it's going to not increase consumer welfare. However, there are a couple of places where if you design your environment, it can actually help you so, for example, oftentimes when we think about, like, setting up a savings account, people think, well, let me just, I don't know, transfer 500 on the 15th of every month from my checking to my savings, right? And that's kind of, you set it and forget it. And that's what it is. And look, defaults are great. That's a good pattern. But one of the things that we did with chimes, for example, was to say, well, what about people that, you know, that's not gonna work for, where I may not always have $500 on the 15th of every month because I don't get paid on the 15th of every month. Like, about 10% of US workers get paid monthly. Everybody else is on a different timeframe. And so they built out this really cool feature, which they said, and I'm not endorsing chime or saying, like, go out and get a chime account. I'm just using it as sort of an example. They allowed people to set this feature. Whereas anytime you get paid more than X, and people can set up whatever X, let's just say $100, $200, save y percentage of it. So I can set as a rule, right? Almost like, if this and that, if I get paid more than $100, then save 10% of it, and then you can set maximums, right? If I get paid more than $5,000, only save 5%. And the beauty about that is great is that when you don't get paid, you don't save, right? Like when you're short on cash, you don't have to magnify the stress because there's this automatic withdrawal that's happening that you forgot about. When you get a little bit of cash, you can save more. And so percentage terms are really useful in that context. We can use those set of automatic rules that we don't have to manage and use ourselves in many, many different domains. So, for example, there are credit cards that allow you to set spending limits by categories, right? So I talk to a lot of people and they tell me I have an Amazon problem or I have an online shopping problem. And the first thing I say is, like, you're not alone, right? Like, lots of people feel this way. What seems reasonable to you? And then people give a number of what, like what they think is reasonable to them. That's sort of a starting point. But we know that every time, right? Because you get push notifications, you get ads. Like, that's just giving yourself a limit is not really changing the environment. But you can go in your credit card and say, I can only spend from this retailer X amount. And then anything after that gets rejected. That's really powerful. Right. Because are you really going to go and call your credit card company to pre authorize an additional purchase for that, like lotion that you're buying? No. Right. Like we really want to talk to anybody right now. And so that's why me, by using technology to help you, like create those barriers for yourselves to spend, create these automatic savings rules so you don't have to think about it. Because what we want is for people not to think about their financial situation, is for them to think about the things that bring them meaning and happiness. Like your family and your friends and your work and your church and whatever it is that brings people happiness. Right. Or at least get them to be 10% happier.
- [66:55]
Wendy de la Rosa
It has a ring to it. In our remaining moments here, you actually do have a bunch of tips for credit cards specifically. And I don't know how many of them we'll have time to get to, but there's one that sticks out to me and it kind of harkens back to something you said earlier that I had made a note to follow up on. So that's a big wind up here. So I'll try to see if I can state this clearly. One of your recommendations specifically for managing your credit cards is to call and ask risk for a lower rate, which taps into something you mentioned earlier, which is the power we all have but many of us don't use, which to speak up for ourselves. And you referenced it in terms of negotiating terms around your mortgage or asking for a raise. And so I'm wondering if you can talk about this specifically as it relates to credit cards and then generally as it relates to speaking up for ourselves, which is hard for many people.
- [67:51]
Jeff Warren
Yeah. So I'll tell you, there's a couple of things that I think we can change about our credit card landscape. If you think about it, when people first apply for a credit card, maybe it's when they need liquidity because they need credit. Maybe it's when they were a college student and they weren't really thinking all that hard. But your payment date, for example, is just set automatically, right? Like the 15th of the month or the 17th or the 22nd of every month, which may or may not actually align with your financial situation. Like actually the 15th of the month might be when you have the least amount of money. So why create that environment for yourself, like actually click that button, say, and change your payment date. Right. Like that is an option. It's available to you. And again, right. Take the time on your calendar. Put it right now, right, Like Dan's financial health day or whoever's financial health day, and spend the time to do that. But the second and more important point that we sort of touched on earlier in our conversation is that no one is coming to save us. We are not gonna have a champion that's going to be our advocate across every single situation. We're not gonna have an advocate that's gonna negotiate for us in every single situation. We have to do that. We have to love ourselves enough to champion ourselves. Right? We do that for other people all of the time. Time. It's time that we start doing that for ourselves. And in the context of the credit cards, it's not just changing your payment date where, you know, half the time you don't even have to talk to anybody. We can just click a button and change it. But you can negotiate your interest rate. So let's think about this. Why? Why do I advocate for this? Lots of time when people apply for a credit card is when they have. Maybe they're applying for the first time so they have no credit history. And over time, just by the simple fact of you paying your payments on time, your credit score will increase. You will have accounts for longer periods of time. And so your debt profile, your risk profile will be different from when you took out that credit card. And we had people actually come into the office and try this. Like, we gave them a little script and we had had over 50% success. Like, that's pretty amazing right? Now, granted, you know, the life has changed, and we did them years ago. But I think the point is that if you don't ask, who's going to ask for you? And the worst thing that a financial institution that may or may not care about you is going to say is no, right? Like that's it. So why not do it?
- [70:38]
Wendy de la Rosa
And this, I think, can generalize this all the way to not only mortgages, which are financial institutions, but your boss and person you're paying to the title company or the inspector on a home, you know, a home inspection, there we can get into the habit of negotiating, which is very uncomfortable for lots of us.
- [70:58]
Jeff Warren
And it shouldn't be. It shouldn't be because we're just talking about a transaction. That's it. Right. I think part of the reason why it feels uncomfortable is because we think that it. It says something about who we are, but it. It doesn't. Right? It's just a financial transaction. And the worst thing that someone on the other side can say is no. Right now, I'm not telling anybody to be a bull in a china shop, like, sort of like, you know, but the idea of asking is just putting out the ask. Why not? It doesn't share any negative information about who you are as a person. And this goes tying it back to the beginning of our conversation. This is all about trying to take away the taboo on finances. Right. If we didn't have a taboo around finances, I think we would negotiate more. We wouldn't feel so uncomfortable asking for a raise or negotiating for a raise. We wouldn't feel that uncomfortable whenever we talk to a service provider to say, is this the best that you can do? The more that we take away that taboo, the more that we can then advocate for ourselves, too.
- [72:12]
Wendy de la Rosa
Yes. And as you said before, I believe you said this before, that this taboo can disproportionately affect women. Because if I understand the data correctly, men are more comfortable speaking up for themselves in this regard.
- [72:24]
Jeff Warren
Yeah, I think that men are just more likely to ask more. I have some data on, you know, your likelihood of seeking out government benefit in the context of, like, tax credits, whether it's the earned income tax credit, et cetera. And so with Steph Tully and Eisha Sharma, we had an experiment where we reframed government benefits, for example, not as something that you needed to ask for, but as something that you had ownership over. Like, you're entitled to that as a citizen of this country. And what we found was that people were really averse to just asking for help. Right. We call this aversion to assistance. But when it feels like you're asking for something that's already yours, that decreases. Right. You feel more psychological ownership over the benefit, and then people are more likely to start applying for it. Now, who did that work better for? It ended up being that men. This was like, psychological. Increasing feelings of psychological ownership, like, increasing feelings of this is mine worked for both men and women, but particularly more for men. Right. Because, again, they felt like it was less of asking for help. And so I think there is some data to suggest that it's just. Yeah, there are cultural reasons. There's all sorts of reasons. But I think the more that we can feel like this is not an ask, this is more just, I am a whole person, right? I have the seat at the table. We are equals in this relationship, and I can ask without it bearing any negative consequences on me. I think that's helpful. Now, there are experts like June Cott and Linda Babcock, who understand the gender dynamics much better than I can on, you know, what are the consequences that women face when they negotiate. But at the very least, we have to start negotiating.
- [74:25]
Wendy de la Rosa
This has been fascinating and very, very practical. Let me ask you the two questions I often ask at the end of an interview. One is, did we miss anything?
- [74:33]
Jeff Warren
I don't think so. I think we missed your relationship with money. That's what we missed.
- [74:40]
Wendy de la Rosa
I was thinking about talking about this at the beginning, but I often have this little dialogue of, like, when is the right time to insert myself into a conversation? And also I have talked about this publicly before, so I want to be sensitive to people who listen to this show regularly. But the honest answer, and I feel more comfortable doing it at the end of the interview than the beginning because I feel less like I'm taking away from your airtime, is that for largely irrational reasons, meaning I am very comfortable. But for largely irrational and I think familial, ancestral reasons, I do find myself worrying about money in ways that, that are deleterious to my overall well being. I was raised by a pair of doctors. Over time they were able to accumulate a decent savings, but when they were young and, and when I was young, they were really flinty and cost conscious and like, didn't turn the heat on in the winter and we would walk around the house in our parkas. And so I think there's a little bit of that. And as I've also disclosed publicly, I had a great grandfather who like, lost the family fortune and took his own life in the family kitchen and was found by his family. Like, I didn't know that guy. But I do feel like his fears and hustle and all that kind of courses through my vein. So I'm a little sheepish to admit it, given that I have had all the advantages that one can have culturally and societally and also have been reasonably successful. And I'm not in a situation of precarity and yet I feel that way nonetheless.
- [76:15]
Jeff Warren
Yeah. So. Okay, Dan, let's. Let's dive into that a little bit because this is, I think this is an important topic. Oftentimes we think about our financial situation as something that is objective and the most predictive. Well, one of the most predictive inputs into our decision making is actually our feelings of our financial situation. So we know lots of people who may be in a really, really bad, objective financial situation, but feel fine. And we know lots of people who are objectively doing pretty well and feel like they're living paycheck to paycheck. And in fact, we see a rise in that over the past couple of years of the percentage of the population who, like objectively, when you look at sort of their balance sheet, are doing pretty well, but feel like they're living paycheck to paycheck. And I want to sort of just take time to like, acknowledge that and own that, because our feelings, even though, you know, we shouldn't let them drive all of our decision making, they are a big input into our decision making. And the more that we acknowledge that, I think the more that we can change our environment. The other piece, and then I know we have to wrap, is that we also don't talk enough about how our childhood and how our parents dealt with money influences our own decision making. I talk about this in the context of when you feel like you had to parentify your parents, like when you were parentified as a child, when you were the one making the responsible decisions, or when you felt like you were the ones who had to make the responsible decisions. All of that, that changes our psyche and fundamentally then like changes our relationship with money, which can have long lasting effects. So I'm glad you brought that up because it's not always this black and white.
- [78:10]
Wendy de la Rosa
Yeah. And just to build on that and clarify a little bit, I think as you described earlier, like, you had to step into the role of parent or grownup prematurely. That was not the case with me. I was more in the. I was more in the situation of begging my parents for money all the time and not getting it. And my parents are great. So I don't want. This is not a critique of my parents, but they were very cost conscious and I was not cost conscious and wanted toys and ice cream and whatever, a nicer house. And so I carry that a little bit into my. Like, it makes me very allergic not to savings. I've been quite diligent about savings, but if there's something I want, I really have trouble denying myself because it feels like I'm throwing myself back into childhood situations that were uncomfortable.
- [79:01]
Jeff Warren
Yeah, yeah. It's just like our childhood plays out in so many ways. I'll tell you a story. You know, my family never talked about investing. Right. Even though they made great long term investments. Like, it takes a real strong person to say, I'm gonna move to another country where I don't know the language. Not for me, but for my future generations. Right. But when I had my daughter, I said, she's gonna know that she is an investor. Like she's gonna have that as an identity. So in her nursery, like, whenever she has a birthday, we say, no gifts, please. But if you really want to, you know, share your favorite book or a stock certificate. And we have so many stock certificates, like, printed out and in her room of Disney and Nike and all of the things. And we have this conversation with her. And again, like, she's very young, right? But it's like, oh, you remember when we watched Mickey Mouse? You own a piece of Mickey Mouse, right? And we, like, go back to. Because the story that I want her to know and create is a story that, like, you have this identity as an investor now. Maybe it will mess her up forever, right? I don't think so.
- [80:15]
Wendy de la Rosa
I don't think so.
- [80:16]
Jeff Warren
So, yeah, it's a. It's all about what we think about and talk about in our childhood. It drives so much.
- [80:22]
Wendy de la Rosa
You may mess her up forever, but I don't think that's going to be the mechanism. I know we're pretty much out of time, but just very quickly to say in defense of my parents or. I don't mean this in a defensive way, but one thing that my dad did along those lines is he created for me and for my brother something called a daddy bank where he gave us a little bit of money when we were very little. And then we got to watch as the interest built and we could make withdrawals, but then we would see how the money would go down. And so there was an emphasis on financial literacy. That has actually been very helpful because I am, as a consequence of my dad's and my mom's influence. You know, though I have unnecessary anxiety, I also am quite responsible and a good investor and saver.
- [81:04]
Jeff Warren
Shout out to Dan's parents. Yeah, shout out to mom and dad.
- [81:07]
Wendy de la Rosa
Exactly. Although I wish she would have heated the house better. In fact, to this day, we live in a house now. We used to live in an apartment, but if there are parts of the house, even parts that I'm not in, that are colder than I feel they should be, I will get really upset about it. So just a long way of re emphasizing your point that our parents have a huge influence. Dr. De la Rosa, this has been a huge pleasure. I've kept you longer than I should have, but thank you.
- [81:31]
Jeff Warren
Oh, it's always a pleasure, Dan.
- [81:37]
Dan Harris
Thanks again to Wendy De la Rosa. Don't forget to check out Wednesday's episode Part 2 in this series about our financial neuroses. I'll be talking to Jeff Warren and 7A Selassie about our money stuff. It's a really candid, interesting conversation. I hope you'll check it out. In closing, I just want to thank everybody who works so hard on this show. Our producers are Tara Anderson, Caroline Keenan and Eleanor Vasily are recording and engineering is handled by the great folks over at Pod People. Lauren Smith is our production manager, Marissa Schneiderman is our senior producer, DJ Kashmir is our executive producer and Nick Thorburn of the band Islands wrote our theme. If you like 10% happier, and I hope you do, you can listen early and ad free right now by joining Wondery plus in the Wondery app or on Apple Podcasts. Prime members can listen ad free on Amazon Music. Before you go, tell us about yourself by filling out a short survey@wondery.com survey.
- [82:46]
Sebene Selassie
On January 5, 2024, an Alaska Airlines door plug tore away mid flight, leaving a gaping hole in the side of a plane that carried 171passengers. This heart stopping incident was just the latest in a string of crises surrounding the aviation manufacturing giant Boeing. In the past decade, Boeing has been involved in a series of damning scandals and deadly crashes that have chipped away at its once sterling reputation. At the center of it all, the 737 Max, the latest season of Business wars explores how Boeing, once the gold standard of aviation engineering, descended into a nightmare of safety concerns and public mistrust. Must the decisions, denials and devastating consequences bringing the titan to its knees? And what, if anything, can save the company's reputation now? Follow Business wars on the Wondery app or wherever you get your podcasts. You can binge Business wars the Unraveling of Boeing early and ad free right now on Wondery plus.