On Forbes: A 3-Step Plan to Hack Holiday Spending
Below is an excerpt from the article "Mindful Money: Three Simple Psychological Tricks To Hack Your Holiday Spending" on Forbes. Read the full article for a 3-step plan to keep your holiday spending in check.
Without a plan, it can be easy to overdo, or let holiday “deals” tempt us into buying more than we need — or can afford. Luckily, the field of behavioral economics offers some simple, concrete strategies to avoid being sucked in. The key: Add friction to your transactions.
When it comes to saving and investing, behavioral economists, who apply insights from the fields of psychology and economics, usually work to overcome what’s known as financial “inertia” — the proclivity to maintain our status quo because it is simpler than altering behavior.
But when it comes to spending, do just the opposite, says Ruth Schmidt, who applies behavioral economics concepts as Innovation Program Leader at Deloitte Digital’s Doblin group. “A lot of the time, we think about solutions to keep people from getting paralyzed during decision-making,” Schmidt says. “In this case, you want to introduce friction.”