Rewire Your Relationship With Money | Wendy De La Rosa

A Wharton professor shares practical tips on increasing your financial security, and eradicating the taboo around financial conversations. Dr. Wendy De La Rosa https://wendydelarosa.com/ is an Assistant Professor at The Wharton School at the University of Pennsylvania. She focuses on behavioral science to improve consumers' financial well-being. This episode is part of our monthlong Do Life Better https://www.meditatehappier.com/podcast-playlists/new-years-2025-do-life-better series. 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 our environment and our finances Financial shame How our parents relationship with money impacts us as adults The G. I. Joe Fallacy, and the misconception that "knowing is half the battle" when it comes to our financial health 10 financial questions to ask your romantic partner How to eliminate the taboo of financial conversations And much more Related Episodes: Do Life Better https://www.meditatehappier.com/podcast-playlists/new-years-2025-do-life-better 543. The Psychology of Money | Morgan Housel https://www.happierapp.com/podcast/tph/morgan-housel-543 #402. How To Work Around Your Own Irrationality | Richard Thaler https://www.happierapp.com/podcast/tph/richard-thaler-402 #345 How to Change Your Habits | Katy Milkman https://www.happierapp.com/podcast/tph/katy-milkman-345 Sign up for Dan's newsletter here http://www.danharris.com Follow Dan on social: Instagram https://bit.ly/3tGigG5, TikTok https://bit.ly/3FOA84J Ten Percent Happier online bookstore https://bit.ly/46TZglY Subscribe to our YouTube Channel https://bit.ly/3FybRzD Our favorite playlists on: Anxiety https://spoti.fi/3Qa8kMT, Sleep https://spoti.fi/3MjtMxF, Relationships https://spoti.fi/3QvyA5J, Most Popular Episodes https://spoti.fi/3QxZASc Full Shownotes: https://www.meditatehappier.com/podcast/tph/de-la-rosa-891

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:04Dan Harris?

  This is the 10% Happier Podcast. I'm Dan Harris.

• 0:18Dan 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,

• 1:03Dan Harris?

  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 G.I. 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.

• 1:49Dan Harris?

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• 2:54Speaker 02

  How do I recover from a friendship breakup? How come there's nowhere to hang out anymore? Why do I feel lonely when I can communicate with anyone and everyone through my phone? These are the questions that you're not alone in asking, and that's where our new podcast, Cornerpiece, comes in to start small on life's biggest questions. I'm Taha, and with my friends Sabrina and Melissa, we're going to explore life's ungooglable questions on this new podcast with TED. Come hang out with us on Cornerpiece with new episodes every other Thursday, wherever you get your podcasts.

• 3:29Dan Harris?

  Dr. Wendy De La Rosa, welcome to the show.

• 3:32Speaker 03

  Thanks, Dan. Happy to be here.

• 3:33Dan Harris?

  Happy you are here. 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.

• 3:45Speaker 03

  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?

• 4:27Speaker 03

  If 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? Why is the environment set up in this way? And how can I make it better?

• 4:59Dan Harris?

  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?

• 5:09Speaker 03

  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 this 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 that's what I did. I had great mentors and I was a private equity investor for a long time.

• 5:52Speaker 03

  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.

• 6:33Dan Harris?

  Yeah, I think you just gave a more nuanced answer, and I appreciate the honesty. But 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.

• 7:01Speaker 03

  That's right. That's fair. That's fair.

• 7:03Dan Harris?

  Okay, so let me ask you a little bit about like what you've learned, and I'm gonna start, and maybe this is the wrong place to start. I'm just gonna start with this phrase that I find interesting, which is the G.I. 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?

• 7:21Speaker 03

  Yeah. So the G.I. 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 is bad at money. We turn it into this like

• 8:03Speaker 03

  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

• 8:44Speaker 03

  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.

• 9:05Dan Harris?

  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?

• 9:17Speaker 03

  The reason why I was named G.I. Joe fallacy was because in the 1980s, you know, the cartoon series, G.I. Joe?

• 9:24Dan Harris?

  Oh, yeah.

• 9:25Speaker 03

  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

• 10:07Speaker 03

  today is never the right day. In fact, we ran a study of about 1,000 US 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

• 10:52Speaker 03

  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 is 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

• 11:36Speaker 03

  account for just 0.1% of the variance in your financial behavior. So not zero, but very little. Like 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, you know, 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.

• 12:21Dan Harris?

  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.

• 12:39Speaker 03

  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 gonna live? What is my most optimal investment allocation? What is my most optimal percentage? Where we could have just gone back

• 13:23Speaker 03

  and thought about making pensions more widely available, right? 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.

• 13:40Speaker 03

  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 zero dollars, whether it's retirement, mutual funds, whatever. If that is the case, now we're trying to 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 US here, we are constantly

• 14:24Speaker 03

  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.

• 14:41Dan Harris?

  I get that, as you say, behavior change is not an educational pursuit, it's an environmental one. However, what can an individual do to 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.

• 14:59Speaker 03

  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 friends, like dating history and all the drama that comes along with that, their politics and all the drama that comes along with that.

• 15:41Speaker 03

  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, yeah, there was one stat. There was like, almost forty percent 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.

• 16:24Speaker 03

  Because if this is this big boogeyman, of course, I'm gonna 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? In the context of partners, I like to say, go on a financial date. Right? Like, 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 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's, like, wants and needs.

• 17:09Speaker 03

  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 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.

• 17:53Speaker 03

  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.

• 18:33Speaker 03

  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?

• 19:18Speaker 03

  Because they'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.

• 19:41Dan Harris?

  I like that. Are there other examples of ways we can tweak our environment?

• 19:44Speaker 03

  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 10 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?

• 20:28Speaker 03

  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 zero 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.

• 21:13Speaker 03

  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 gonna get a tax refund. I don't know how much. But because in the future, I think I'm gonna 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.

• 21:59Speaker 03

  But in the future, you're gonna get some money. What percentage of it would you like to save? And because in the future I'm perfect, of course I'm gonna save more. Right? 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. Commit, you know, when the extra paycheck comes, I'm gonna save X percent. Or if you receive bonuses, right? Like, there is a standard cadence to bonus time. You know when that's gonna come? Ask yourself today. What percentage of it would you like to save? And create that commitment.

• 22:43Dan Harris?

  Harness the somewhat beneficial lie that in the future, you're gonna be perfect to improve your behavior?

• 22:50Speaker 03

  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 wanna increase your retirement allocation right now? They say, do you wanna 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 wanna 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.

• 23:27Dan Harris?

  Thaler, by the way, was on the 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 wanna 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?

• 23:51Speaker 03

  My gosh, you're asking me, like, who's the biggest devil in the room? So many.

• 23:57Dan Harris?

  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's coming to mind.

• 24:07Speaker 03

  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

• 24:49Speaker 03

  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

• 25:33Speaker 03

  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?

• 26:12Speaker 03

  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, 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 just like an expense issue.

• 26:42Dan Harris?

  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?

• 26:56Speaker 03

  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 US 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, then my financial success is also an individualistic endeavor. Or my financial insecurity, it's all on me.

• 27:42Speaker 03

  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 taboo-ness can be so problematic.

• 28:27Speaker 03

  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?

• 29:08Speaker 03

  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.

• 29:52Speaker 03

  And it's because it feels like a personal moral failure, because we've internalized this 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.

• 30:26Dan Harris?

  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 and how it really gets in the way of tackling problems.

• 30:42Dan 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.

• 30:58Speaker 04

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• 32:56Dan Harris?

  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 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?

• 33:40Dan Harris?

  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?

• 34:00Speaker 03

  When we crafted those lists 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 going to 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

• 34:41Speaker 03

  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. 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.

• 35:22Speaker 03

  Right. 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 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.

• 36:07Speaker 03

  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?

• 36:51Speaker 03

  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? So 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 negotiating, when we've all independently bought houses, right? Like, hey, here's what you can negotiate. It's not just the APR.

• 37:36Speaker 03

  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.

• 38:19Dan Harris?

  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?

• 38:46Speaker 03

  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?

• 38:56Dan Harris?

  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.

• 39:03Speaker 03

  Okay. All right, so do you talk about your intermediate friends about sex and politics?

• 39:08Dan Harris?

  Yeah.

• 39:09Speaker 03

  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.

• 39:27Dan Harris?

  Yeah.

• 39:27Speaker 03

  Right? So here's like a bad tactic, right? Hey, Joe, it looks like you are struggling with money. What's going on?

• 39:37Speaker 03

  Like, like, it's like, oh, okay. Versus, man, you know, something that's really on my mind right now is that, uh, I don't know, I'm making it 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.

• 40:08Dan Harris?

  Right.

• 40:09Speaker 03

  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.

• 40:15Dan Harris?

  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. It might open the floodgates, or they might shut down, but you'll have information.

• 40:43Speaker 03

  Yeah, I think that's right. Take a little risk, like, 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 top of mind for lots of people. And things that are top of mind are just bound to come out if we allow them to come out.

• 41:04Dan Harris?

  Yes.

• 41:04Speaker 03

  You know, I'll share, I recently had a miscarriage and it was...

• 41:09Dan Harris?

  Oh, sorry.

• 41:09Speaker 03

  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.

• 41:24Dan Harris?

  Yeah.

• 41:24Speaker 03

  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 the little risk. I agree with that.

• 41:50Dan Harris?

  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.

• 42:19Speaker 03

  A hundred percent. 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?

• 43:03Speaker 03

  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.

• 43:44Speaker 03

  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 exactly the same, 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.

• 44:29Speaker 03

  So it's not that people go out and buy a new TV, right? It's that they're saying, 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?

• 45:14Speaker 03

  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 $2.99. And when you do the math and somebody making 15 bucks an hour, paying $2.99 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. We talked about people who are not on my nice list.

• 46:00Dan Harris?

  Just to 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?

• 46:12Speaker 03

  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 first, and I don't get paid until Friday. That's a real concern for most people.

• 46:55Speaker 03

  But I would recommend for people to limit it, and just say it 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.

• 47:25Dan Harris?

  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.

• 47:35Speaker 03

  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.

• 48:15Speaker 03

  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. It's like death by a thousand cuts, right?

• 48:58Speaker 03

  You know, there is 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 that's you, do a little experiment. And here are some quick tips. You can go cold turkey, right? You can delete the app altogether.

• 49:43Speaker 03

  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 a hundred dollars. 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?

• 50:26Speaker 03

  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.

• 50:55Dan Harris?

  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?

• 51:03Speaker 03

  Yes. So there's been a great experiment by Dipso Man 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, right? 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.

• 51:46Speaker 03

  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

• 52:30Speaker 03

  for my emergency savings fund. So like, 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 in 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.

• 53:13Speaker 03

  Or I'm really working on finally opening up my 529 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.

• 53:35Dan 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.

• 53:52Dan Harris?

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• 56:18Dan Harris?

  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?

• 56:30Speaker 03

  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. 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?

• 57:14Speaker 03

  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.

• 57:59Speaker 03

  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 house 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.

• 58:42Speaker 03

  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.

• 59:10Dan Harris?

  Yeah, I believe psychologists refer to this as the fresh start effect.

• 59:14Speaker 03

  My colleague Katie Milkman and all of her work.

• 59:17Dan Harris?

  Yes, and Katie's been on the show. So you talked about that app, hypothetical app that you might download it 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.

• 59:32Speaker 03

  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.

• 1:00:17Speaker 03

  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 Beckler 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 isn't.

• 1:01:01Speaker 03

  Look, defaults are great. That's a good pattern. But one of the things that we did with Chime, for example, was to say,

• 1:01:08Speaker 03

  But what about people that, you know, that's not going to 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 time or saying like, go out and get a time. I'm just using it as sort of an example. They allowed people to set this feature where 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, then that.

• 1:01:53Speaker 03

  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. It's 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 got 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

• 1:02:36Speaker 03

  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 an number of 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. It's not really changing the environment. But you can go in your credit card and say, I can only spend from this retailer X amount.

• 1:03:20Speaker 03

  And then anything after that gets rejected. That's really powerful, right? Because are you really gonna go and call your credit card company to pre-authorize an additional purchase for that lotion that you're buying?

• 1:03:38Speaker 03

  No, right? Like, we really wanna talk to anybody right now. And so that's why, I mean, by using technology to help you, like, create those barriers for yourself 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. It's 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.

• 1:04:10Dan Harris?

  That has a ring to it.

• 1:04:13Dan Harris?

  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 hearkens 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 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.

• 1:04:56Dan Harris?

  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.

• 1:05:05Speaker 03

  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're a college student and they're really thinking all that hard. But your payment date, for example, is just set automatically.

• 1:05:30Speaker 03

  Right, like the fifteenth of the month, or the seventeenth, or the twenty-second of every month, which may or may not actually align with your financial situation. Like, actually, the fifteenth 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 and change your payment date. Right? Like, that is an option. It's available to you. And again, right? Take that time on your calendar, put it right now, right? Like, Dance 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.

• 1:06:14Speaker 03

  We're not going to have a champion that's going to be our advocate across every single situation. We're not going to have an advocate that's going to 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. It's time that we start doing that for ourselves. And in the context of the credit card, 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 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,

• 1:06:58Speaker 03

  so they have no credit history. And over time, like, 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.

• 1:07:25Speaker 03

  And we had over fifty percent 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 gonna ask for you? And the worst thing that a financial institution that may or may not care about you is gonna say is no. Right? Like, that's it. So why not do it?

• 1:07:52Dan Harris?

  And this, I think, can generalize this all the way to not only mortgages, which are financial institutions, but your boss and the 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.

• 1:08:13Speaker 03

  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 says something about who we are. But 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, of just putting out the ask, why not? It doesn't share any negative information about who you are as a person. And this goes, you know, tying it back to the beginning of our conversation.

• 1:08:57Speaker 03

  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, you know, 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.

• 1:09:27Dan Harris?

  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.

• 1:09:39Speaker 03

  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 earning income tax credit, et cetera. And so with Steph Tully and Isha 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.

• 1:10:25Speaker 03

  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.

• 1:11:08Speaker 03

  This is more just, I am a whole person. Hey, I have this 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 Batcock, 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.

• 1:11:40Dan Harris?

  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?

• 1:11:48Speaker 03

  I don't think so. I think we missed your relationship with money. That's what we missed.

• 1:11:54Dan Harris?

  I was thinking about talking about this at the beginning, but I also, 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 rational and I think familial ancestral reasons. I do find myself worrying about money in ways 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,

• 1:12:39Dan Harris?

  and when I was young, they were really flinty and cost-conscious and 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 of that kind of courses through my veins. 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.

• 1:13:23Dan Harris?

  And I'm not in a situation of precarity, and yet I feel that way nonetheless.

• 1:13:30Speaker 03

  Yeah, so, okay, Dan, let's dive into that a little bit, because 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,

• 1:14:15Speaker 03

  that 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 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.

• 1:14:58Speaker 03

  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 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.

• 1:15:25Dan Harris?

  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 grown up prematurely. That was not the case with me. I was more in the

• 1:15:38Speaker 03

  Yeah, yeah.

• 1:15:39Dan Harris?

  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 saving, 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.

• 1:16:16Speaker 03

  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 going to move to another country where I don't know the language, not for me, but for my future generations, right? But with, 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.

• 1:17:00Speaker 03

  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 of, like, you have this identity as an investor. Now, maybe it will mess her up forever.

• 1:17:28Dan Harris?

  I don't think so. I don't think so.

• 1:17:31Speaker 03

  Yeah, it's all about what we think about and talk about in our childhood. It drives so much.

• 1:17:37Dan Harris?

  You may mess her up forever, but I don't think that's gonna 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.

• 1:18:18Speaker 03

  Shout out to Dan's parents. Shout out to mom and dad.

• 1:18:22Dan Harris?

  Although I wish you 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 reemphasizing 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.

• 1:18:46Speaker 03

  Oh, it's always a pleasure, Dan.

• 1:18:52Dan Harris?

  Thanks again to Wendy De La Rosa. Don't forget to check out Wednesday's episode, part two in this series about our financial neuroses. I'll be talking to Jeff Warren and Sebene A. 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 Kara Anderson, Caroline Keenan, and Eleanor Vassili. Our recording and engineering is handled by the great folks over at Podpeople. Lauren Smith is our production manager. Marissa Schneiderman is our senior producer. DJ Cashmere is our executive producer, and Nick Thorburn of the band Islands wrote our theme.

• 1:19:40Speaker 01

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