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  • Changing people's financial behavior is difficult,

  • but it is possible.

  • [Your Money and Your Mind with Wendy De La Rosa]

  • One company that was looking to reduce energy consumption in San Diego

  • tried to change people's behaviors

  • by using signs with one key sentence.

  • What exactly was that sentence?

  • Well, it turns out that signs about protecting the environment

  • or looking out for future generations

  • or signs that focus on the amount of money that people will save

  • were not effective in reducing consumers' energy consumption.

  • Instead, the message that worked the best

  • was a simple one that read,

  • "The majority of your neighbors

  • are undertaking energy-saving actions every day.”

  • A similar message focusing on what our neighbors are doing

  • was used in the UK to incentivize British taxpayers

  • to pay their taxes on time.

  • That simple change, pointing out what other people are doing,

  • led to an increase in collections of about 29 percent.

  • Psychologist Robert Cialdini, who worked on both of these studies,

  • calls this phenomenon "social proof."

  • He says people look to what others do

  • in order to guide their own behavior.

  • It's no wonder, then,

  • that we base a lot of our own fiscal decisions

  • on what other people do.

  • And unfortunately, what we most easily observe

  • are other people's spending behavior,

  • not their savings behavior.

  • It's easy to notice if your friend goes on vacation

  • or buys a new car or a swanky pair of shoes.

  • And with social media, you can even keep tabs

  • on the shopping habits of the rich and the famous.

  • Now, if someone wins the lottery,

  • we'd expect them to spend more money -- and they do.

  • But what's really interesting

  • is what happens to their neighbors.

  • A recent study found that close neighbors of lottery winners

  • are more likely to borrow money, spend more on goods

  • and eventually declare bankruptcy.

  • In fact, the larger the lottery winner,

  • the higher the rate of bankruptcy

  • among the neighbors of the lottery winners.

  • Basically, the lottery winner's behavior

  • is rubbing off on their neighbors.

  • We are always aware of consumer spending,

  • but what we are not aware of

  • are other people's savings behavior.

  • So let's lift that veil.

  • You can start with just a couple of friends.

  • Instead of asking where they bought their new bike

  • or the best time of year to travel to France,

  • ask them if they paid down their mortgage

  • or if they have an emergency fund

  • or if they've paid off their student loan.

  • Tell them about your own financial situation.

  • To really make this a social affair,

  • I encourage you to start celebrating paying down your debts.

  • Maybe you've seen the viral video of a happy dancing woman

  • who paid off more than 200,000 dollars in student debt.

  • She was able to achieve this incredible milestone

  • because she was bold enough to ask her colleagues

  • and her industry peers

  • how much they earned,

  • noting the thousands of dollars that she was missing out on,

  • and finding a job that would pay her her fair market rate.

  • I think that video gained notoriety

  • because it's not often that we get to see what people have saved

  • and how they're doing it.

  • But it shouldn't be so rare.

  • By having check-ins with your friends,

  • you can help make a trend.

  • I remember when I paid off my student loan,

  • I wish I would have celebrated that milestone with friends.

  • But at the time, I, too, was brainwashed into thinking

  • that I shouldn't talk to my friends about money,

  • that it was a scary taboo subject.

  • Don't be like me.

  • Start the conversation today.

  • Research has shown that our social bonds make us healthier.

  • It's time to harness your social ties

  • to boost your financial fitness, too.

  • Your future self will thank you.

Transcriber:

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B1 TED lottery behavior social energy consumption people

Why talking to your friends can help you save money | Your Money and Your Mind

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    林宜悉 posted on 2021/03/03
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