WEBVTT 00:00:03.060 --> 00:00:05.160 Matt Abrahams: One of the most challenging conversations we 00:00:05.160 --> 00:00:07.350 can have is about finances. 00:00:07.935 --> 00:00:11.205 My name is Matt Abrahams and I teach Strategic Communication at 00:00:11.205 --> 00:00:12.945 Stanford Graduate School of Business. 00:00:13.245 --> 00:00:16.575 Welcome to Think Fast Talk Smart, the podcast. 00:00:17.205 --> 00:00:19.945 Today I look forward to speaking with Wendy De La Rosa. 00:00:20.085 --> 00:00:23.265 Wendy is a professor at the Wharton School at the University 00:00:23.265 --> 00:00:26.805 of Pennsylvania, and she's the co-founder of the Common Cents Lab. 00:00:26.805 --> 00:00:28.965 That's Cents, C-E-N-T-S. 00:00:29.355 --> 00:00:33.315 Her research focuses on understanding and changing consumer financial behavior. 00:00:33.820 --> 00:00:37.060 She studies how small changes in a person's financial environment 00:00:37.150 --> 00:00:40.629 can have a large impact on their spending and saving habits. 00:00:40.960 --> 00:00:43.570 Well, Wendy, I am super excited to have this conversation. 00:00:43.570 --> 00:00:44.290 Thanks for being here. 00:00:44.620 --> 00:00:45.400 Wendy De La Rosa: Happy to be here. 00:00:45.400 --> 00:00:46.150 Thanks for having me. 00:00:46.150 --> 00:00:46.300 Matt Abrahams: Yeah. 00:00:46.300 --> 00:00:46.989 Should we get started? 00:00:47.080 --> 00:00:47.739 Let's do it. 00:00:48.210 --> 00:00:51.180 In your work on financial decision making, you've spent some time 00:00:51.180 --> 00:00:52.950 working on the fresh start effect. 00:00:53.220 --> 00:00:55.680 Can you share what that is and how we can actually leverage 00:00:55.680 --> 00:00:57.240 that in our own motivation? 00:00:57.510 --> 00:00:58.470 Wendy De La Rosa: That's such a great question. 00:00:58.470 --> 00:01:00.330 I wanna give credit where credit is due. 00:01:00.330 --> 00:01:04.470 So the Fresh Start Effect is identified by Katie Milkman, one of my amazing 00:01:04.470 --> 00:01:07.920 colleagues here, who leads our initiative Behavior Change for Good. 00:01:07.980 --> 00:01:12.150 And in her work, she sort of identifies the fact that everybody wants to change. 00:01:12.240 --> 00:01:15.600 We wanna be better humans, we wanna be better parents, better spouses, 00:01:15.600 --> 00:01:17.250 et cetera, better with our money. 00:01:17.370 --> 00:01:21.660 But the how and the when is always a little bit hard, bridging that 00:01:21.660 --> 00:01:23.370 gap between intention and action. 00:01:23.610 --> 00:01:26.280 And so one of the key findings in behavioral research 00:01:26.280 --> 00:01:28.170 is that we need to time. 00:01:28.500 --> 00:01:34.020 our interventions really well so that your motivation to act is activated and peaked. 00:01:34.260 --> 00:01:38.610 And so we know from research that the number one time when people 00:01:38.610 --> 00:01:42.900 download financial management apps on at the app store, for example, is 00:01:43.020 --> 00:01:44.850 December 31st and January 1st, right? 00:01:44.850 --> 00:01:46.080 New Year, new me. 00:01:46.350 --> 00:01:49.110 But it Fresh Start effect doesn't just have to start there. 00:01:49.350 --> 00:01:52.290 We can think about our birthdays, we can think about new seasons. 00:01:52.290 --> 00:01:54.720 The beginning of every month, the beginning of every week. 00:01:55.080 --> 00:02:00.100 One of the experiments that I conducted with a company called Silver Nest, 00:02:00.280 --> 00:02:04.210 we used this idea to do something that I think was really unique. 00:02:04.570 --> 00:02:10.660 So Silver Nest is this company that tries to connect older adults with 00:02:10.660 --> 00:02:12.700 each other to try to solve a problem. 00:02:12.975 --> 00:02:17.174 One housing is so expensive now in the United States, but two, we have a 00:02:17.174 --> 00:02:21.285 loneliness epidemic and we know one of the biggest predictors of our long-term 00:02:21.285 --> 00:02:25.394 health, even our longevity, is the number of daily meaningful interactions 00:02:25.394 --> 00:02:26.864 we have with another human being. 00:02:27.225 --> 00:02:29.355 And so they try to pair up older adults. 00:02:29.714 --> 00:02:31.994 As you can imagine, that's a hard ask, right? 00:02:31.994 --> 00:02:35.084 Let me invite somebody that I don't know into my home. 00:02:35.565 --> 00:02:39.840 So we ran a couple of experiments on their marketing, mostly on Facebook ads 00:02:40.020 --> 00:02:42.780 to say, Hey, you are 64, turning 65. 00:02:43.020 --> 00:02:44.370 Have you thought about a change? 00:02:44.550 --> 00:02:49.170 Or you're 49 turning 50, or your 53 turning 54, have you thought about a 00:02:49.170 --> 00:02:50.940 change versus you're getting older? 00:02:51.210 --> 00:02:52.320 Have you thought about a change? 00:02:52.560 --> 00:02:53.790 It's not a surprise. 00:02:53.820 --> 00:02:54.990 People know their age. 00:02:55.079 --> 00:02:59.530 It's not new information, but it's a cue to say there's a meaningful 00:02:59.530 --> 00:03:02.890 change happening, maybe I should reexamine how I'm living my life. 00:03:02.890 --> 00:03:06.160 And we saw that it led to higher click-through rates on the ads. 00:03:06.160 --> 00:03:08.799 It led to more activity on the website. 00:03:08.950 --> 00:03:10.810 And so we were really excited about that. 00:03:11.109 --> 00:03:15.940 Matt Abrahams: This idea of finding signals that can help move people from 00:03:15.940 --> 00:03:17.890 intention to action is really important. 00:03:17.890 --> 00:03:21.130 And it can be a particular date, it can be some other significant 00:03:21.130 --> 00:03:23.470 event that just helps us refocus. 00:03:23.470 --> 00:03:28.799 And it sounds like it leads to not only more focus, but actually more action 00:03:29.280 --> 00:03:31.620 Wendy De La Rosa: For me, I think timing is everything, not 00:03:31.620 --> 00:03:32.880 just in relationships, right? 00:03:32.880 --> 00:03:36.329 We have that old saying, timing is everything, but timing is everything 00:03:36.329 --> 00:03:37.650 when it comes to behavior change. 00:03:37.650 --> 00:03:41.670 It was one of the core sort of findings in my dissertation that even the 00:03:41.670 --> 00:03:43.590 timing of how we receive our money. 00:03:43.820 --> 00:03:47.480 So if you receive your paycheck every week, versus every two weeks, versus 00:03:47.480 --> 00:03:51.440 every month, that fundamentally changes how much money you think you have. 00:03:51.619 --> 00:03:53.600 So higher payment frequencies, right? 00:03:53.600 --> 00:03:57.350 When we have shorter time intervals between when we get paychecks, it makes us 00:03:57.350 --> 00:04:01.609 feel a little bit richer, and so therefore we're more likely to spend on the margins. 00:04:01.790 --> 00:04:05.029 So it paradoxically can undermine our financial wellbeing. 00:04:05.239 --> 00:04:09.359 Holding constant the objective level of income, right? 00:04:09.359 --> 00:04:13.109 So we're both earning whatever it is, 50,000, 100,000, 150,000. 00:04:13.109 --> 00:04:16.170 But just by changing the timing of it, all of a sudden our 00:04:16.170 --> 00:04:17.730 relationship with money changes. 00:04:17.790 --> 00:04:21.930 And we have so many examples of showing the importance of timing 00:04:22.050 --> 00:04:25.320 as this underexplored, but really important aspect that we should 00:04:25.320 --> 00:04:26.820 all be thinking about in our lives. 00:04:27.120 --> 00:04:29.880 Matt Abrahams: So if I'm a manager running an organization, how could 00:04:29.880 --> 00:04:35.745 I leverage your insights into timing to perhaps motivate my employees more 00:04:35.805 --> 00:04:37.455 help with efficiency and productivity. 00:04:37.455 --> 00:04:38.295 Any ideas on that? 00:04:38.625 --> 00:04:41.085 Wendy De La Rosa: Well, I think there's two key recommendations I would have. 00:04:41.085 --> 00:04:44.865 The first one is we know that productivity is fundamentally 00:04:44.865 --> 00:04:46.905 tied to financial wellbeing. 00:04:47.115 --> 00:04:49.160 So if your employees are financially stressed. 00:04:49.835 --> 00:04:53.975 They can't show up with their full self at work, their brain 00:04:53.975 --> 00:04:56.315 activity, their attention is gonna be focused on something else. 00:04:56.315 --> 00:04:59.225 And so as a manager, I always say, look, you know that when your employees 00:04:59.225 --> 00:05:00.575 are sick, you give them a sick day. 00:05:00.784 --> 00:05:03.965 When they need vacation, when they need to rest, to avoid burnout, right? 00:05:03.965 --> 00:05:04.865 We have vacation days. 00:05:05.015 --> 00:05:07.265 I suggest giving everybody a financial health day. 00:05:07.460 --> 00:05:10.640 Because everybody, again, going back to this intention action 00:05:10.640 --> 00:05:14.750 gap, we all know that we should go back and revisit our retirement 00:05:14.750 --> 00:05:16.430 allocation and increase that, right? 00:05:16.430 --> 00:05:19.010 We all know that we should finally get around to opening up 00:05:19.010 --> 00:05:21.080 a 529 account for our children. 00:05:21.080 --> 00:05:24.409 We all know that we should probably create a will and all of these things 00:05:24.409 --> 00:05:25.969 that people know they should do. 00:05:26.090 --> 00:05:27.440 The critical piece is time. 00:05:27.590 --> 00:05:31.640 So if you create a norm in your organization, create a financial health 00:05:31.640 --> 00:05:34.219 day to say Everybody on this date. 00:05:34.320 --> 00:05:36.900 We are all gonna try to get our collective act together. 00:05:36.990 --> 00:05:39.719 Take the time to finally call your credit card company and 00:05:39.719 --> 00:05:40.980 ask for a lower interest rate. 00:05:41.159 --> 00:05:46.380 Take the time to finally cancel that old subscription that you know you 00:05:46.380 --> 00:05:50.280 should have canceled 20 years ago, or whatever the case may be, because 00:05:50.280 --> 00:05:51.919 it's not just something good to do. 00:05:52.109 --> 00:05:55.395 Research has shown it Increases the productivity of your worker. 00:05:55.395 --> 00:05:56.445 So that's tip number one. 00:05:56.685 --> 00:05:58.935 Matt Abrahams: I like that idea, and you've just motivated me to go change 00:05:58.935 --> 00:06:00.945 some subscriptions I have, so thank you. 00:06:01.215 --> 00:06:03.225 Wendy De La Rosa: You know, I always tell people, put it in your calendar. 00:06:03.225 --> 00:06:05.355 Love yourself enough to prioritize you today. 00:06:05.475 --> 00:06:07.905 But the second piece is to really fundamentally think about the 00:06:07.905 --> 00:06:13.335 timing of when you're asking your employees to make financial decisions. 00:06:13.665 --> 00:06:19.035 For example, we ask our employees to make critical financial decisions 00:06:19.035 --> 00:06:20.295 in the first week of employment. 00:06:20.445 --> 00:06:24.585 Like what's your retirement allocation going to be in the first week 00:06:24.585 --> 00:06:25.905 that you've just hired somebody? 00:06:26.165 --> 00:06:30.005 They're probably trying to have multiple calls with it to figure out what their 00:06:30.005 --> 00:06:34.055 login and username and password's going to be to remember whether or not your name 00:06:34.055 --> 00:06:36.425 is, you know, dig Joe or Harry, right? 00:06:36.515 --> 00:06:38.975 There's so many things that are happening in that first week of 00:06:38.975 --> 00:06:43.295 employment, like it's just not set up in a way that's sustainable. 00:06:43.295 --> 00:06:48.125 So I think that's one, like create space for employees to go back and 00:06:48.125 --> 00:06:51.575 actively encourage employees to go back to really think about that decision 00:06:51.785 --> 00:06:53.165 if you don't already automate it. 00:06:53.604 --> 00:06:54.955 Matt Abrahams: I think you're dead on, right? 00:06:54.955 --> 00:06:58.405 When we ask people early on in their careers to make all these fundamental 00:06:58.405 --> 00:07:02.245 decisions that they're just trying to get, which end is up, figured out. 00:07:02.484 --> 00:07:05.365 I felt the same way when my wife and I got engaged, there were all 00:07:05.365 --> 00:07:07.435 these questions about what do you want for your gifts, et cetera. 00:07:07.435 --> 00:07:10.224 And had I had a year into the marriage, I would've changed 00:07:10.344 --> 00:07:12.025 everything about what I was asking for. 00:07:12.294 --> 00:07:16.344 And so the idea that we can help our employees by having them make 00:07:16.344 --> 00:07:20.865 these decisions that are long term a little later, once they have a more 00:07:20.865 --> 00:07:22.605 appreciation, I think is a great idea. 00:07:23.055 --> 00:07:26.085 You studied the power of framing on financial choices. 00:07:26.295 --> 00:07:29.775 Uh, can you give a specific example of how a leader or manager's communication 00:07:29.775 --> 00:07:33.315 framing of, let's say a budget cut or some new financial policy, can 00:07:33.315 --> 00:07:38.895 either trigger a scarcity mindset or inspire a problem solving mindset? 00:07:38.895 --> 00:07:43.245 How come the words we use in the way we position it influence how people see it? 00:07:43.615 --> 00:07:44.725 Wendy De La Rosa: That's a great question. 00:07:44.875 --> 00:07:45.745 I, along with 00:07:45.745 --> 00:07:48.385 Stephanie Tully and Eesha Sharma have looked at this 00:07:48.385 --> 00:07:50.784 Wendy De La Rosa: concept called psychological ownership, 00:07:50.844 --> 00:07:55.555 which is like people's feelings about things, places, ideas. 00:07:55.675 --> 00:07:58.615 Do I feel like I own Stanford, a piece of Stanford? 00:07:58.615 --> 00:08:00.325 Do I feel like Stanford is mine? 00:08:00.445 --> 00:08:01.915 I think about my own laptop. 00:08:01.975 --> 00:08:03.565 I even say this is my laptop. 00:08:03.565 --> 00:08:06.235 Even though the ownership of it is actually the University 00:08:06.235 --> 00:08:07.675 of Pennsylvania's laptop. 00:08:07.835 --> 00:08:10.864 It's really important to think about what is the psychological ownership 00:08:10.864 --> 00:08:14.344 that your employees feel over the organization, because if this is my 00:08:14.344 --> 00:08:18.935 organization, clearly I'm going to care much more about that organization and go 00:08:18.935 --> 00:08:21.275 outta my way to make sure it succeeds. 00:08:21.424 --> 00:08:25.114 Versus if the framing and the communication is all about you are 00:08:25.114 --> 00:08:28.955 just on loan here, you are not going to get the same level of investment, 00:08:28.955 --> 00:08:33.495 motivation, attention from people who just recognize that this is not something 00:08:33.495 --> 00:08:35.205 that, this is not a dream that I own. 00:08:35.205 --> 00:08:36.434 I don't own a piece of it. 00:08:36.434 --> 00:08:39.465 I'm not invited to even dream about a future here. 00:08:39.645 --> 00:08:43.965 And so when negative things occur, if you involve people in the process. 00:08:44.550 --> 00:08:47.970 And are transparent and treat people with dignity so that they 00:08:48.030 --> 00:08:49.860 can feel psychological ownership. 00:08:50.070 --> 00:08:51.060 I think that's really important. 00:08:51.270 --> 00:08:55.710 Suzanne Chu at Cornell has done some work looking at if you increase the sense 00:08:55.710 --> 00:09:00.960 of psychological ownership of citizens over public lands, people are much 00:09:00.960 --> 00:09:02.850 more likely to take care of that land. 00:09:03.000 --> 00:09:07.830 So this is one of the psychological constructs that goes beyond just 00:09:08.010 --> 00:09:10.084 ownership of, a thing, right? 00:09:10.084 --> 00:09:13.655 We can think about ownership of places, ideas, membership, 00:09:13.655 --> 00:09:17.105 institutions, organizations, and oftentimes we ignore that. 00:09:17.285 --> 00:09:21.064 And so I encourage any leader listening to this check yourself, right? 00:09:21.064 --> 00:09:23.015 I'm from the Bronx, so just check yourself. 00:09:23.135 --> 00:09:25.850 What are the words that you're using to describe your own organization? 00:09:26.515 --> 00:09:28.555 Matt Abrahams: I'm gonna go home and try this with my kids. 00:09:28.675 --> 00:09:33.145 Talk a lot about your room, your cleanliness, and see if I can get 00:09:33.145 --> 00:09:34.735 them to pick up the stuff around. 00:09:34.945 --> 00:09:39.625 But this idea of it's how you can connect people to their work and to 00:09:39.625 --> 00:09:42.865 what they do, and then that changes the relationship they have and the 00:09:42.865 --> 00:09:44.455 care and concern they put forward. 00:09:44.845 --> 00:09:47.365 You discuss the concept of financial shame. 00:09:48.230 --> 00:09:51.500 What is this and how can we talk about money more openly with 00:09:51.500 --> 00:09:55.490 friends and family to overcome this barrier so we can actually have 00:09:55.490 --> 00:09:57.470 more honest, open conversations? 00:09:58.200 --> 00:10:01.260 Wendy De La Rosa: Yeah, shame is one of these negative emotions that's 00:10:01.260 --> 00:10:04.980 paralyzing in many ways, and I think we have, and I'll talk about this 00:10:04.980 --> 00:10:06.870 more in sort of the US context. 00:10:06.870 --> 00:10:11.160 We have thought about financial wellbeing as this individual pursuit, right? 00:10:11.160 --> 00:10:15.060 If I am financially successful, by and large, we make dispositional 00:10:15.060 --> 00:10:16.590 attributions basically. 00:10:17.095 --> 00:10:20.065 It's because of your work ethic, it's because of your intelligence. 00:10:20.065 --> 00:10:23.155 All of these internal factors versus external factors, right? 00:10:23.155 --> 00:10:26.425 We tend to downplay luck, our communities, our support systems, 00:10:26.425 --> 00:10:28.435 our mentors, our all of these things. 00:10:28.585 --> 00:10:33.265 And so when people find themselves in a place where they are not financially 00:10:33.265 --> 00:10:36.445 secure, where they feel like they're doing everything they can, and yet they're 00:10:36.445 --> 00:10:41.280 struggling because we've created this narrative about financial wellbeing being 00:10:41.280 --> 00:10:46.500 this individualistic pursuit, then who is to blame other than myself, only me. 00:10:46.590 --> 00:10:52.110 And so that vicious cycle creates this shame where, how can I even 00:10:52.110 --> 00:10:56.220 talk about this openly because me talking about this openly is only 00:10:56.220 --> 00:11:01.110 going to lead to me recognizing my own personal feelings over and over again. 00:11:01.350 --> 00:11:06.640 And shame more so than any other negative feeling emotions leads us to ignore. 00:11:06.819 --> 00:11:10.150 And in financial wellbeing, that's the worst thing you could do, right? 00:11:10.150 --> 00:11:12.340 Not doing anything is the worst thing you could do. 00:11:12.730 --> 00:11:17.290 So what I like to tell people is let's breathe and try to melt the financial 00:11:17.290 --> 00:11:21.520 shame away because we have to recognize that every company out there is getting 00:11:21.520 --> 00:11:23.860 faster, smarter, more efficient. 00:11:24.040 --> 00:11:27.310 Of course, we haven't even talked about AI in this conversation at 00:11:27.310 --> 00:11:28.810 getting you to part with your money. 00:11:28.960 --> 00:11:34.185 It's not even a David versus Goliath metaphor, if you like that metaphor, it's 00:11:34.185 --> 00:11:36.495 a David versus thousands of Goliaths. 00:11:36.795 --> 00:11:40.665 And so once you've recognize that the environment is not necessarily set up 00:11:40.665 --> 00:11:44.265 for you to succeed, then we can have a little bit more empathy with ourselves 00:11:44.415 --> 00:11:46.515 and then recreate our environment. 00:11:46.574 --> 00:11:48.255 And that's the critical piece, right? 00:11:48.255 --> 00:11:51.734 We can't just sit in the current environment and expect things to change. 00:11:51.915 --> 00:11:55.875 Let's figure out how we can do our best to recreate our environment. 00:11:56.145 --> 00:11:58.425 Matt Abrahams: What are some things people can do to recreate that 00:11:58.425 --> 00:12:03.195 environment so they feel a sense of agency rather than being the victims 00:12:03.195 --> 00:12:05.055 of not doing what they should be doing? 00:12:05.325 --> 00:12:06.015 Wendy De La Rosa: That's a great point. 00:12:06.015 --> 00:12:08.745 So first I tell people, you know your financial situation 00:12:08.745 --> 00:12:09.675 better than anybody else. 00:12:09.675 --> 00:12:12.075 You know your vices and your virtues. 00:12:12.165 --> 00:12:16.065 Take the financial health day, as we talked about earlier, to get a handle 00:12:16.215 --> 00:12:17.925 on your vice and what does that mean? 00:12:17.925 --> 00:12:22.685 For some people, it's I recognize that I can say no to that new jacket 00:12:22.744 --> 00:12:26.795 one time, but when it follows me throughout my entire online journey, 00:12:26.795 --> 00:12:31.324 day in and day out, I may not have the willpower to say no the hundredth time. 00:12:31.385 --> 00:12:34.444 And so how do we recreate our environment and install ad blockers 00:12:34.444 --> 00:12:36.815 throughout your entire financial life. 00:12:37.085 --> 00:12:43.205 The convenience of a DoorDash or an Instacart or Uber Eats is just so high. 00:12:43.235 --> 00:12:47.855 And so I tell people either make the decision to remove that app from your 00:12:47.855 --> 00:12:52.715 phone or link it to a prepaid card where you're installing an instilling 00:12:52.775 --> 00:12:54.845 a mandatory limit on yourself. 00:12:55.055 --> 00:12:58.085 And then the third piece is timing matters so much. 00:12:58.085 --> 00:13:01.025 So I sound like a broken record now, but it just, it is so critical. 00:13:01.145 --> 00:13:06.375 Take a look at when you receive your pay and take a look at when your bills 00:13:06.375 --> 00:13:10.455 come in, and if there's a fundamental mismatch there because you get paid on 00:13:10.455 --> 00:13:14.985 the first and your big credit card bill is not due until the 17th, then now you're 00:13:14.985 --> 00:13:17.145 allowing opportunities for overspending. 00:13:17.205 --> 00:13:19.905 Call the credit card company and change your payment date so 00:13:19.905 --> 00:13:21.465 it aligns with your pay days. 00:13:21.925 --> 00:13:25.795 Matt Abrahams: It sounds like you're talking about automating some things 00:13:25.795 --> 00:13:30.625 that keep you on that path, and also looking at all the automations that 00:13:30.625 --> 00:13:35.455 already exist and challenging some of them so that you can not necessarily 00:13:35.455 --> 00:13:37.045 fall victim to some of that work. 00:13:37.280 --> 00:13:42.440 As somebody who might want to give advice or to help someone who is 00:13:42.530 --> 00:13:46.850 perhaps not in as much control of their finances as they'd like to be. 00:13:46.850 --> 00:13:49.490 Do you have advice and guidance on how to give that kind of feedback in 00:13:49.490 --> 00:13:52.670 a way that doesn't feel threatening and can truly be heard and helpful? 00:13:53.070 --> 00:13:55.380 Wendy De La Rosa: I'd like to frame it from the concept of love. 00:13:55.380 --> 00:13:58.680 Like when we see somebody that we love with a broken 00:13:58.680 --> 00:14:00.570 arm, we don't just ignore it. 00:14:00.720 --> 00:14:04.440 We don't just turn our head and pretend and hold their other hand. 00:14:04.530 --> 00:14:05.880 That's not what we do. 00:14:06.090 --> 00:14:07.170 We try to address it. 00:14:07.200 --> 00:14:10.380 We encourage them to go see the doctor for whatever reason. 00:14:10.410 --> 00:14:12.209 We don't do that with financial wellbeing. 00:14:12.640 --> 00:14:16.895 And finances, I like to say are the hidden person at the dinner table. 00:14:17.105 --> 00:14:21.155 If you know you have a friend that's going through a major life change, whether 00:14:21.155 --> 00:14:26.675 that's a new child, getting married, going to college, moving across the country for 00:14:26.675 --> 00:14:31.685 a new job, getting divorced, going through a cancer treatment, everything that's 00:14:31.685 --> 00:14:37.990 meaningful in our lives sadly also come by and large with some financial change. 00:14:38.820 --> 00:14:41.940 And so to ignore that is actually not loving. 00:14:42.180 --> 00:14:45.960 And so the first thing I would say is approach it from a place of love. 00:14:46.290 --> 00:14:47.760 I really care about you. 00:14:47.880 --> 00:14:48.630 I love you. 00:14:48.990 --> 00:14:52.020 Help me understand what's going on and how can we help? 00:14:52.380 --> 00:14:56.070 And help doesn't have to be always lending or giving money. 00:14:56.520 --> 00:15:00.435 Help can be, helping someone walk through a situation or connecting 00:15:00.435 --> 00:15:03.525 them to the appropriate resources or just providing time and support. 00:15:03.525 --> 00:15:05.295 There's all of these ways that we can help. 00:15:05.594 --> 00:15:09.675 And the second thing I'll say is that there are troubling statistics 00:15:09.675 --> 00:15:13.334 showing that people are much more likely to talk with their friends 00:15:13.334 --> 00:15:14.984 about their political ideology. 00:15:14.984 --> 00:15:19.305 They're past dating history and sexual escapades and all of these things, but 00:15:19.364 --> 00:15:21.165 for whatever reason, money is still taboo. 00:15:21.405 --> 00:15:26.745 So much so that engaged couples, like 40% of engaged couples, have not shared. 00:15:27.615 --> 00:15:29.115 Their income with one another. 00:15:29.355 --> 00:15:33.885 Like you are about to say, I'm ready to go through life with you, 00:15:34.185 --> 00:15:37.485 but I don't you, you don't wanna share your financial picture. 00:15:37.725 --> 00:15:41.805 There's something fundamentally broken there, and this is maybe a little cliche, 00:15:41.805 --> 00:15:45.405 but if you're gonna spend life with someone, have the financial conversation, 00:15:45.405 --> 00:15:49.185 make it a date, get a bottle of wine, put it on the calendar and say, let's 00:15:49.185 --> 00:15:52.845 be vulnerable together, because what else is love is, if not vulnerability. 00:15:53.265 --> 00:15:57.194 Matt Abrahams: Framing it as love and as a gift of concern for somebody, 00:15:57.194 --> 00:16:00.795 I think is a great way of doing it, rather than, I have something that 00:16:00.795 --> 00:16:02.625 you don't have and let me help you. 00:16:03.015 --> 00:16:06.074 I really like the idea of turn it into an event, make it 00:16:06.074 --> 00:16:07.964 something that isn't a labor. 00:16:07.964 --> 00:16:11.055 It's something that actually can be fun, if you will, just 00:16:11.055 --> 00:16:12.525 to have this kind of connection 00:16:13.155 --> 00:16:15.105 Wendy De La Rosa: And change the norms around the discussion. 00:16:15.105 --> 00:16:19.005 One of the things that my girlfriends and I used to do is we used to have monthly 00:16:19.005 --> 00:16:21.775 brunches just to talk about finances. 00:16:22.045 --> 00:16:24.055 So how did you ask for a raise? 00:16:24.175 --> 00:16:25.795 What are you getting paid right now? 00:16:26.005 --> 00:16:30.265 These are all important conversations that aren't had and that help everybody. 00:16:30.444 --> 00:16:34.494 But it's odd to have that conversation, so you have to create a norm. 00:16:34.525 --> 00:16:37.555 Hey, we're gonna be transparent with each other about this because we care 00:16:37.555 --> 00:16:38.785 and we're gonna lift each other up. 00:16:39.084 --> 00:16:41.425 And so yeah, let's do it over boozy brunch. 00:16:41.635 --> 00:16:42.354 Matt Abrahams: I think that's great. 00:16:42.474 --> 00:16:46.645 I have found in my life with lots of topics that are taboo that just 00:16:46.960 --> 00:16:51.130 initiating the conversation opens up the opportunity for others to share, 00:16:51.310 --> 00:16:55.210 and I love this idea of let's make it fun, or let's connect and let's 00:16:55.210 --> 00:16:56.275 show how we're supporting each other. 00:16:57.795 --> 00:17:00.435 Wendy, this has been a fantastic conversation. 00:17:00.465 --> 00:17:03.405 Before we end, I like to ask three questions of all my guests. 00:17:03.405 --> 00:17:06.165 One I create just for you, and two are similar across everyone. 00:17:06.165 --> 00:17:06.825 Are you up for that? 00:17:07.095 --> 00:17:07.515 Wendy De La Rosa: I am. 00:17:07.785 --> 00:17:09.375 Matt Abrahams: So, Wendy, you've done a lot of really 00:17:09.435 --> 00:17:11.025 interesting in-depth research. 00:17:11.025 --> 00:17:14.265 I'm curious, what has surprised you most in the work that you've done? 00:17:14.775 --> 00:17:18.375 Wendy De La Rosa: I think the core finding has sort of always stuck with me. 00:17:19.080 --> 00:17:22.140 Is that we always tend to think about income as this 00:17:22.170 --> 00:17:24.060 unidimensional construct, right? 00:17:24.060 --> 00:17:28.920 It's all about, I earn 50,000 and you earn 70,000, or I earn a hundred 00:17:28.920 --> 00:17:30.840 thousand and you earn 200,000. 00:17:30.990 --> 00:17:34.035 And that's actually just one dimension of income, which is level. 00:17:34.810 --> 00:17:40.120 The thing that has surprised me the most is how much we can change and alter and 00:17:40.120 --> 00:17:44.740 influence consumer behavior by altering the other dimensions of income, like the 00:17:44.740 --> 00:17:49.629 frequency, like the income volatility of income, like the source, whether 00:17:49.629 --> 00:17:52.780 it's coming as a bonus or as a salary. 00:17:52.780 --> 00:17:56.950 All of these things that we didn't really get into in our conversation really matter 00:17:56.950 --> 00:18:01.510 and frame how people think about that money and fundamentally spend that money. 00:18:01.825 --> 00:18:03.685 Matt Abrahams: That idea of widening the aperture to look 00:18:03.835 --> 00:18:08.605 beyond income as just one unitary thing can really make a difference. 00:18:08.605 --> 00:18:09.505 Thank you for sharing that. 00:18:09.805 --> 00:18:13.615 Question number two, who's a communicator that you admire and why? 00:18:14.035 --> 00:18:14.965 Wendy De La Rosa: Oh, so many. 00:18:15.415 --> 00:18:20.325 I will say Adam Grant has just been such a powerful force. 00:18:20.685 --> 00:18:25.035 I was his student his second year when he joined Wharton, and I think he has like 00:18:25.035 --> 00:18:30.405 such an amazing way of connecting with people by sharing his own vulnerabilities. 00:18:30.735 --> 00:18:33.585 And so I like to emulate a lot of my teaching based on him. 00:18:33.645 --> 00:18:36.135 He's been highly influential in my life and I'm so lucky. 00:18:36.345 --> 00:18:40.665 But I think the most direct and most influential communicator 00:18:40.665 --> 00:18:41.805 in my life has been my mother. 00:18:41.805 --> 00:18:47.575 She is the queen and master of Caribbean idioms that just cut deep 00:18:47.755 --> 00:18:50.065 in a way that no one else can, right? 00:18:50.065 --> 00:18:53.935 I was sharing recently and I just find myself now repeating her idioms. 00:18:53.935 --> 00:18:55.120 Learn to love those who love you. 00:18:56.070 --> 00:18:59.280 And that was, Those are just words from my mother or, there's a lid 00:18:59.280 --> 00:19:03.690 for every pot, or like all of these things that have so much wisdom. 00:19:03.750 --> 00:19:06.360 Matt Abrahams: I was just gonna say wisdom in common vernacular sayings. 00:19:06.390 --> 00:19:09.480 Wendy De La Rosa: Yes, in a way that is so succinct. 00:19:09.570 --> 00:19:11.190 It doesn't waste any words. 00:19:11.370 --> 00:19:16.110 She is a great orater, but it's her ability to just pull on these 00:19:16.110 --> 00:19:17.640 idioms that make her so amazing 00:19:17.970 --> 00:19:19.600 Matt Abrahams: And how they hit a chord. 00:19:19.600 --> 00:19:20.590 They strike a chord. 00:19:20.680 --> 00:19:23.920 And if your mother is like my mother, they come at just the right time. 00:19:24.250 --> 00:19:24.760 Wendy De La Rosa: Oh yeah. 00:19:25.120 --> 00:19:27.580 Sometimes when you don't want them to, but you need them. 00:19:27.730 --> 00:19:27.790 Matt Abrahams: Yeah. 00:19:27.790 --> 00:19:30.730 And they reverberate for a while and you really see how they hit. 00:19:30.970 --> 00:19:34.960 Final question, what are the first three ingredients that go into a 00:19:34.960 --> 00:19:37.120 successful communication recipe? 00:19:37.455 --> 00:19:39.405 Wendy De La Rosa: So the first I would say is curiosity. 00:19:39.615 --> 00:19:42.555 You can't actually engage in a conversation without being 00:19:42.555 --> 00:19:44.385 curious about the other person. 00:19:44.715 --> 00:19:47.235 If not, then you're just engaging in a soliloquy. 00:19:47.565 --> 00:19:52.845 The second would be humility to understand that what you're hearing is 00:19:52.845 --> 00:19:54.945 not necessarily what the person is saying. 00:19:54.975 --> 00:19:56.685 There's so much loss in hearing. 00:19:57.014 --> 00:19:59.024 And then I think the third. 00:19:59.640 --> 00:20:00.330 Clarity. 00:20:00.690 --> 00:20:04.020 So in order to be an effective communicator, you need to be clear 00:20:04.170 --> 00:20:08.070 in your own wants and your own needs and in your own message, and 00:20:08.070 --> 00:20:09.990 so much gets lost in vagueness. 00:20:10.230 --> 00:20:12.960 I think people keep saying clarity is kindness. 00:20:13.230 --> 00:20:14.010 I think that's so true. 00:20:14.580 --> 00:20:17.430 Matt Abrahams: Curiosity, humility, and clarity. 00:20:18.000 --> 00:20:19.260 A wonderful recipe. 00:20:19.680 --> 00:20:25.890 The point about curiosity is the bridge to connection, humility, to realize that 00:20:25.980 --> 00:20:29.040 we bring a lot to our conversation that might actually get in the way of what's 00:20:29.040 --> 00:20:34.740 really being said and making sure that we are focused so that people can understand. 00:20:35.130 --> 00:20:39.810 Thank you and thank you for providing the focus we all need to be thinking about 00:20:39.810 --> 00:20:46.155 when it comes to our finances, but more broadly about how we learn and approach 00:20:46.245 --> 00:20:51.075 very difficult, challenging situations in our lives, and financial information 00:20:51.075 --> 00:20:52.695 and finances are one of those things. 00:20:53.115 --> 00:20:54.075 This has been wonderful. 00:20:54.230 --> 00:20:54.700 Thank you. 00:20:54.700 --> 00:20:54.735 Wendy De La Rosa: Thank you. 00:20:58.365 --> 00:21:00.255 Matt Abrahams: Thank you for joining us for another episode of 00:21:00.255 --> 00:21:02.475 Think Fast Talk Smart, the podcast. 00:21:02.865 --> 00:21:05.445 To learn more about how to be more effective in your financial 00:21:05.445 --> 00:21:06.855 communication, please listen to 00:21:06.855 --> 00:21:09.659 episode 104 with Katy Milkman and episode 00:21:09.659 --> 00:21:13.320 Matt Abrahams: 59 with Szu-chi Huang This episode was produced by 00:21:13.520 --> 00:21:17.459 Katherine Reed, Ryan Campos, and me, Matt Abrahams, with special 00:21:17.459 --> 00:21:19.590 thanks to the Wharton Podcast crew. 00:21:20.040 --> 00:21:23.879 Our music is from Floyd Wonder, with special thanks to Podium Podcast Company. 00:21:24.120 --> 00:21:27.270 Please find us on YouTube and wherever you get your podcasts. 00:21:27.480 --> 00:21:29.520 Be sure to subscribe and rate us. 00:21:29.760 --> 00:21:32.639 Also follow us on LinkedIn, TikTok, and Instagram. 00:21:32.969 --> 00:21:36.840 And check out fastersmarter.io for deep dive videos, English language 00:21:36.840 --> 00:21:38.939 learning content, and our newsletter. 00:21:39.300 --> 00:21:43.889 Please consider our premium offering and extended Deep Thinks episodes, Ask Matt 00:21:43.889 --> 00:21:48.110 Anything at fastersmarter.io/premium.