lifestyle changes

Why Behavior Nudges Don't Always Lead to Healthy Habits

Emily Guy Birken — Mon, 08 Jul 2019 08:00:06 +0000

In the 10 years since the illuminating book Nudge: Improving Decisions About Health, Wealth, and Happiness by Nobel Prize-winning economist Richard Thaler and legal scholar Cass Sunstein was published, the idea of nudging people to make better decisions has become mainstream in everything from government to public health to personal habits.

A nudge is a way of subtly influencing choices without actually forbidding anything. One of the examples Thaler and Sunstein include in their book is the cafeteria that nudged diners into healthy eating habits by placing fruits and other healthy snacks at eye level, while putting chips and ice cream in harder-to-reach spots. No one was prevented from seeking out their favorite junk food, but the set up of the offerings encouraged diners to choose apple slices instead.

A similar successful nudge was the introduction of automatic 401(k) enrollment. When employees had to opt-in to their 401(k) program, participation was abysmal, since signing up for a retirement account is the kind of important-but-not-urgent task that many people procrastinate on. By making enrollment automatic, employees could productively ignore their 401(k), rather than ignore it at their peril. (See also: 401(k) or IRA? You Need Both)

But even though nudges have proven successful in several arenas, they're not perfect. In fact, nudges don't always work and can sometimes even backfire. Here's why nudges aren't always the best way to go about changing your habits.

Strong preferences

I'm an avid reader and a big supporter of public libraries. I'm at the library as often as twice a week. Despite this, I carry an average overdue fine balance of close to $10 at any one time, and I once wracked up an impressive $75 fine on a stack of books that remained in my library bag for weeks.

Over the years, I've tried various nudges to improve my on-time return rate. I've left books on the table by the door, set a Google calendar reminder, written my due dates on my paper calendar, left books in my car, and I've even placed "return library books" on my work to-do list. Not a single one of these nudges has worked.

What's going on here is that my preexisting preferences are far stronger than my nudges to return the books. I prefer to leave the house with just enough time to get where I'm going without an extra stop at the library and I prefer to keep working throughout the day without an interruption to return books. Those preferences will guide me no matter how insistent my nudge is, because a nudge does not take away my choices.

Strong preferences can also help to explain the phenomenon of non-compliant patients. No matter what nudges the medical profession has attempted to implement to improve patient compliance, many patients have such a strong preexisting preference to maintain their old eating and exercise habits that they'll simply ignore their doctor's recommendations. Even when it comes to taking medication, the preference to not take it is greater than even some financial nudges that pay patients to comply.

Though nudges can help to improve habits, they will not overcome strong preferences. (See also: How to Use Financial Anchors to Make Better Money Decisions)

Incomplete nudges

Sometimes nudges work, but only a little bit. That's because a nudge is encouraging a specific small behavior, when the overall outcome that you're trying to achieve is complex.

For instance, a grocery store increased its produce sales by 9 percent after installing green arrows pointing toward the produce section with a sign that said, "Follow the green arrow for your health." While it's certainly beneficial for shoppers to buy more produce, that's not the end of the beneficial habit. How many of those grocery shoppers let their purchased produce rot in their refrigerators? Particularly if their preexisting preference is for junk food?

Similarly, the cafeteria nudge that gets diners to choose apples instead of chips at lunchtime may be an incomplete nudge if the diner simply chooses unhealthy snacks for the rest of the day. The nudge within the cafeteria's confines may have worked, but it was incomplete in terms of helping to change the diner's overall eating habits.

Reactive behavior

The basis of the theory of nudging is that people aren't making the best decisions for themselves. This may be because people are distracted, overwhelmed, or suffering from cognitive biases. But if you're aware that someone is nudging you, it can be easy to feel as though the nudger doesn't think much of your intelligence.

When that happens, the fact that you're being nudged can cause you to choose another option out of stubbornness. Parents of small children are certainly familiar with this. If I give my son the choice of jeans or khakis, in an attempt to nudge him to choose long pants on a chilly day, he might refuse both and insist on wearing shorts just because I tried to influence his decision.

This refusal to comply with a nudge may explain what happened after New York City required restaurants to list the calorie content of all menu items. Instead of nudging consumers to choose lower-calorie items, this change prompted average restaurant-goers to buy slightly more calories. The nudge did not have its desired effect, in part because some diners probably felt resentful about the attempt to change their choices. This may have prompted them to either disregard the calorie counts, or gleefully indulge in the highest-calorie item they could find.

Over-saturation

I have an alarm that goes off every day at 7:30 a.m. to remind me to take my medication. My FitBit buzzes at 10 minutes to the hour if I haven't taken at least 250 steps that hour. My phone informs me at 9 p.m. every night that it's time for me to start getting ready for bed.

I ignore every single one of these nudges more often than I heed them.

Not only have I gotten used to these alarms, buzzers, and bells going off throughout my day, making them very easy to ignore, but I also know that there will be no immediate consequences if I don't take my medication, continue sitting for hours at a time, or stay up too late.

These nudges were more effective when I first set them — although my strong preexisting preferences made it difficult to comply even then. But now that my day is over-saturated in nudges that I've learned to ignore, the reminders are nothing more than momentary annoyances that I quickly turn off.

With the onslaught of nudges from our smartphones, wearable devices, and home assistants, all of these reminders can become nothing more than background noise.

Nudges are the start, not the end

Nudge theory has done a great deal to change the landscape of modern decision-making. But while nudges can help to steer decisions, they're still only gentle suggestions.

Even if you set up your environment to encourage better choices, you need to remember that habit-change requires commitment, not just nudges.

Like this article? Pin it!

This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Best Money Tips: Small Lifestyle Changes That Make a Big Difference

Amy Lu — Mon, 22 Jan 2018 09:30:09 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found articles on simple changes that make a big difference in your life, health foods you should make at home, and fun things to put on a calendar.

How to Budget When You're No Longer Broke

Emily Guy Birken — Mon, 16 Oct 2017 08:00:07 +0000

My first job out of college was working at Barnes & Noble for $8.25 an hour, which meant I took home about $1,000 per month. It was a pretty precarious financial position considering that my rent cost $500 per month and I owed $200 per month to my student loans.

After about eight months of working retail, I landed an office job that paid me $10,000 more per year. When I received my first paycheck from the new job, I was sorely tempted to cash the whole thing and make it rain for an entire weekend to make up for the frugality I'd been forced to live under while I was selling books. I made grand plans to decorate my apartment and buy new clothes — and I couldn't wait to stop double checking the cost of everything all the time.

Going from barely making ends meet to suddenly flourishing can be a difficult transition to adjust to. It's tempting to just throw your budget out the window, since you no longer need such a restrictive attitude toward money. But going from broke to flush does not mean you can abandon budgeting altogether, or else you risk making bad financial decisions that will stick with you for years to come. (See also: You Got a Raise! Now What?)

Beware lifestyle creep

We all have a tendency to spend right up to our income ceiling, no matter how much money we make. When you have a major income increase, it's very easy to go nuts with all the things you have been denying yourself on your more restrictive budget. But this kind of spending will keep you unprepared for a financial problem down the line, and you will also simply get accustomed to your new standard of living because of a cognitive bias known as hedonic adaptation.

Hedonic adaptation describes the phenomenon wherein we get used to the things we have. This cognitive bias helps explain why it is so easy for you to become just as financially stressed after a major pay raise or other financial increase as you were at the lower level. When the things that were rare treats when you were earning less become a standard part of your life, you enjoy them less — but you are also less willing to give them up. (See also: 5 Mental Biases That Are Keeping You Poor)

It's very difficult to avoid lifestyle creep when you are excited to upgrade from ramen dinners and cement-and-plywood furniture. There are a couple of things you can do to keep your larger paychecks from being frittered away with lifestyle creep.

1. Give yourself a (small) raise

You should get to enjoy the fruits of your labors, and no one can keep living on a restrictive budget forever. So start by increasing your monthly fun money budget by a portion of your increased income. For instance, if you're going to be seeing $1,000 more per month, let $50–$100 of it become money in your pocket. Enjoying a portion of your extra money in an intentional way will make it much easier for you to avoid unintentional lifestyle creep.

2. Reassess your budget

Whether you had a strict budget that you followed religiously while you were broke, or you simply tried to keep from spending any money at all, a major change in your income level is an excellent time to look back over your budget. Specifically, it's a good time to figure out what budget categories were underfunded while you were making less money — and if there were any categories where you can trim some fat.

It's tempting to simply beef up all of your budget categories with your extra income, but it pays to determine where your money can do the most good. For instance, you might be itching to increase your dining out budget category so you can start keeping up with the friends who go out every weekend. But if you have high-interest debts, it makes more sense to wipe those out before you start living it up with your high-roller friends. (See also: 5 Ways to Pay Off High Interest Credit Card Debt)

3. Make gradual changes to your lifestyle

After making do with a leaking bean bag chair instead of a real sofa, it's natural to want to go out and replace everything from your broke days as soon as the money starts coming in. But even though you now have more money, your funds are not unlimited, and you'll be able to make better and more intentional replacements if you make changes gradually rather than all at once.

So take the time to figure out what you would most like to replace or change first so that you can make such gradual changes. For instance, rather than buying all new furniture, you might instead just upgrade your mattress, since having an old and worn out mattress could be affecting your sleep. As you build up your savings, you can slowly replace other pieces of furniture as needed.

4. Set up automatic transfers

Set up automatic transfers to start as soon as your new paychecks do, so that the extra money is working for you as of day one instead of burning a hole in your checking account. These can be especially helpful for combating lifestyle creep when you get a raise or higher-paying job.

If you don't have an emergency fund already, start by setting up an automatic transfer into savings for one. From there, sign up for automatic transfers into your retirement account — and if you don't already have one, now is an excellent time to enroll! (See also: Choosing a Retirement Account: What's Available, and What's Best for You?)

Going from broke to bank

A higher income can slip through your fingers if you are not paying attention to your spending, which is why it is so important to adjust your budget after you get a major pay raise or higher-paying job. Take the time to responsibly enjoy your new wealth, but also be sure to make rational and deliberate decisions about where your money can do the most good in your life.

Like this article? Pin it!

This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

10 Things You Can Do Today to Be Happy

POPSUGAR Smart Living — Fri, 30 Oct 2015 11:15:21 +0000

Let's be honest: when it comes to negative thinking, most of us need to check ourselves before we wreck ourselves. Whether it's traffic on the freeway or the weight we've gained in our arms, we are seasoned vets at focusing our attention on all the things that we wish were somehow better or different.

As a life coach and an inspirational speaker, I am constantly being asked for quick-fix tips for inducing happiness and reducing stress. My answer is always the same: if we want to be happy, we have to learn how to turn the volume down on our negativity and shift our awareness to the parts of our lives that are working, to thoughts and ideas that make us feel inspired and uplifted.

The reason for this is that, unbeknownst to many, negative thinking is the number one cause of unhappiness in humans. That's right. It's not your lack of sleep or your cranky boss that is bringing you down, it's your thoughts about these things that cause you to be less than your naturally exuberant self.

An incredible method for shifting away from the negative and into the positive is an exercise that I call "The Flip Switch." The Flip Switch is a great tool for instant happiness, as well as for kick-starting our brains into the habit of focusing only on the thoughts that make us feel empowered and optimistic. If it is practiced regularly, The Flip Switch will benefit us emotionally, mentally, and also biologically (think endorphins, new neural pathways, and extra serotonin, oh my!) in our quest for happiness.

Application of the Flip Switch

When you find yourself drowning in a downward spiral of negative thoughts — or even just treading water in them! — this list is your life preserver. To stop negativity in its tracks, shift your attention onto one of the activities on the list below for a few minutes (or as long as you feel is necessary) when you first notice negative self-talk start to come up.

1. Listen to Music That You Love

Music is an extremely powerful tool for shifting your mood and mindset. Just make sure to choose music that energizes and elates you.

2. Call Someone Who Understands and Supports You

Hearing the voice of someone we love or a friend who gives great advice is always an instant pick-me-up.

3. Get Into Nature

My personal favorite. There is nothing that calms and soothes me more than watching a sunset or being on the beach by my house.

RELATED: 6 Ways to Revamp Your Résumé

4. Meditate

This is a great go-to when you find yourself already pretty deep in the downward spiral. When we are stuck in negative thought patterns, the first physical shift that occurs is that we stop breathing. Shifting our focus onto our breath causes our minds to slow down and brings immediate relief.

5. Laugh

Laughter is hands down the best remedy for releasing tension. Watch a silly movie or a YouTube video, or remember a joke that never gets old.

6. Exercise/Get in Your Body

When we are moving and being active, we shake up energy and shift our focus away from our mind and into our physicality. Even if this means running in place for 30 seconds or doing a silly dance in your office bathroom, I promise you will feel a difference.

7. Appreciate What Is Around You

Look around your environment and make a conscious effort to list and appreciate everything in your field of vision that you like. Maybe it's the way the man on the subway is holding his baby, or maybe it's the photo of your parents that you keep on your desk. Negative thoughts cannot enter our minds when we are in a state of appreciation, so appreciate, appreciate, appreciate!

8. Make a Gratitude List

When you feel the onset of negativity, quickly turn your thoughts to everything in your life that you are grateful for. This high-vibe tactic diffuses the negativity and is like a reset button for your brain. I have a list I carry in my wallet of all the things I'm happy about — it's my secret weapon that I pull out and look at when I start to feel down.

9. Do an Act of Kindness

Studies have shown that giving to others elevates levels of dopamine in the brain and instantly boots feel-good brainwaves.

10. Create Your Own!

You know yourself better than anyone. If the items on this list don't particularly invigorate you, just think of the things that make you smile and do that! Eat your favorite food, look at a photograph that reminds you of an awesome vacation... anything that feels good is fair game.

Some items on the list may work better for you than others, so choose the activities that excite you most. You will know when you have successfully "flipped the switch" because you will a) feel better and b) feel much more neutral about the triggering issue that set off the negative thoughts in the first place.

Cheers to your newfound state of bliss, and happy Flipping!

Like this article? Pin it!

Feeling good about yourself and others is not out of reach. Drop the negativity and start taking steps to feeling happy today.

Guest Post Blurb:

This is a guest contribution from our friends at POPSUGAR Smart Living. Check out more useful articles from this partner:

This article is from POPSUGAR Smart Living of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

The Two Biggest Mistakes People Make When Starting to Live Frugally

Nora Dunn — Thu, 10 Nov 2011 10:36:30 +0000

"I've turned over a new leaf in life!" You exclaim from the highest mountain about your newly adopted frugal lifestyle. You've seen the light — possibly through dire financial necessity — and you understand that with a few lifestyle changes, you can live frugally with relatively no pain and lots to gain.

Living frugally, after all, is en vogue. Brown-bagging is in, sushi is out. Home-brewed coffee in, Starbucks out. Curling up with a good book in, rounds of drinks at the bar out. Macrame Christmas presents are in, shopping at the mall is out. You're full of frugal lifestyle ideas and are excited about getting on this bandwagon. (See also: 25 Frugal Changes You Can Make Today)

Making the Investment to Be Frugal

So you head to the grocery store in preparation for your new frugal lifestyle. Your previously empty fridge will be stocked to the hilt with inspirational ingredients that will fuel your new frugal gourmet life, and you're determined to create works of culinary mastery that will serve up nutritious dinners yielding leftover lunches you'll be excited about the next day.

You look forward to bragging to your co-workers about the awesome lunch you'll be toting. They might even become so envious, you'll start cooking up big batches of your soon-to-be-famous dishes and selling them for an extra few bucks on the side. Now that's how you make frugal cool, baby!

You reel yourself in. For now you just need to learn to cook something good and stock your fridge. But since you had an empty fridge to begin with, this is a frugal investment.

Next in your shopping mission to live frugally, you stop at the bookstore. Books provide hours and hours of entertainment, so even though they may cost the same as going to a movie, they last so much longer, and you can enjoy them over and over again.

"Wow — it's been a while since I've read anything," you think as you browse the bookstore. You're inspired by so many books, you can't seem to choose. So you don't. You buy the lot.

The last stop on your frugal shopping spree is Starbucks. If you're going to start bringing coffee from home in the mornings, you need a nice travel mug to tote it in — and some nice beans to get you started. (Wait a minute — that's a pretty nice French press coffee maker there. The coffee will taste much better from that, and you're much more likely to be excited about your daily coffee if it's really high quality. This is most certainly a frugal investment worth making — something that will be paid off with a few weeks of no lattes, anyway).

So in the name of getting ready to start living frugally, you've made a hefty investment. But it's all worthwhile, right?

Off and Running...

Now you're ready for your new frugal life. You cook a terrific meal that's so good, you entertain the idea of hosting frugal dinner parties and showing other people how to do it. This is easy! You can't believe you didn't start this whole frugal lifestyle thing earlier.

After dinner you curl up to your new book and fall asleep in a state of frugal bliss.

The next day your frugal lunch is delicious, and you don't even mind eating it in the company of your coworkers who have ordered their standard sushi lunch. You love sushi too, but frugal tastes better.

You think of all the other ways you can live frugally. Inspired by your initial success, you're ready to take your life to frugal extremes.

...But Too Fast?

Maybe you last a week of living with your new frugal choices. Maybe longer. But at some point you wonder how long you need to live like this before you're allowed to splurge. You've been so good — cooking meals at home (it's a lot of work!), brewing your own coffee (which isn't nearly as good as Starbucks), brown-bagging your lunches (which are good, but not sushi), and staying inside reading your books (which are getting a little bit boring).

You haven't even reached a break-even point of your "frugal investment," and you're wondering when you can splurge. The sense of deprivation is starting to kick in. Frugal may be cool, but it's definitely not happening.

The Two Biggest Mistakes People Make When Starting to Live Frugally

The above examples of adopting a frugal lifestyle are, of course, exaggerated and slightly parodied. Although there are people out there who fit this profile to a "T," there are also many more who make choices about becoming frugal that don't cost as much money. Either way, these examples demonstrate two major mistakes people often make:

Mistake 1: Spending Too Much Money to Be Frugal

Although in some cases you need to spend a little money to save a lot of money, generally, this is not part of the frugal mentality you need to adopt. Beware of shopping sprees in the name of adopting new frugal habits; until you know the habit is maintainable, it's not worth spending the money. (Besides, there's usually a more moderate or creative approach to the task that costs less.)

Mistake 2: Doing Everything at Once

Turning your life upside down overnight in the name of starting to live frugally is a recipe for disaster. Living frugally isn't about sacrificing everything and depriving yourself; it's about making balanced choices that allow you to live large on a small budget. By swinging from one extreme to another, your ability to strike a frugal medium — one that is actually a maintainable lifestyle — is remote.

Deprivation is not frugal. Although adopting new frugal habits might require some initial compromises, miring yourself in deprivation in the name of living frugally only invites a financial rebellion before you've even made any headway.

How to Really Start Living Frugally

Instead of turning your life upside down in the name of becoming frugal, here are some suggestions for how to start living frugally:

Ease into new frugal habits in a way that's comfortable, not shocking. If you're going to start brown-bagging lunches, for example, and you're used to eating out every day, then start with leftover lunches three days a week. This still gives you a lunch out two days per week to look forward to — and you're still saving money overall.
Adopt frugal lifestyle ideas one at a time, and incorporate them into the framework of your life. It takes 21 days of doing something to make it a habit, so allow yourself this time to weave new frugal habits into your routines. After bringing lunches to work becomes comfortable to maintain, shake up your coffee ritual by only treating yourself to Starbucks on Mondays and Fridays. Let this habit sink in, then tackle another area of your life.
Instead of always adopting new frugal habits, try deepening a habit you've started. Leftover lunches going well? Then try cutting down lunches out to one day per week. Liking your home-brewed coffee? Maybe Starbucks can wait for Saturday mornings only. Or maybe Starbucks can become a thing of your past altogether.

Staying Motivated

If you want to start to live frugally, you'll best get there slowly and methodically — as unglamorous as it sounds. But in this slow-and-steady approach, it's easy to lose sight of the ball. Remember that you decided to start living frugally for a reason, and that reason is attached to a goal. If you stick to living frugally in a manageable way and track your progress, you'll reach those goals — and then some.

Your frugal lifestyle is just that — a lifestyle, not a passing fancy.

This article is from Nora Dunn of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Why This Isn't Your Grandparents' Economy

Kentin Waits — Thu, 11 Nov 2010 13:00:08 +0000

Why can’t we save the way our parents and grandparents saved? Is it just us, or have other factors changed our economic realities to such a degree that saving has been marginalized, or in some cases precluded altogether? It’s no revelation that over the past 50 years, the American economic landscape has shifted drastically — rewriting our personal histories and resetting our goals. But what can we label with relative certainty as the true "game changers?" Looking back at the lives of my own parents and grandparents, I’ve identified five categories of economic influencers that are significantly different today than in the 1950s and 60s. (See also: The Recession Glossary)

The Prevalence of Marketing

Marketing has always been a part of American life. In the early and middle parts of the last century, it danced on the margins of our realities, gently suggesting products and services that might make our lives easier or better. Today, the gentle dancer has traded ballet slippers for steel-toed work boots and tromps through nearly every visual and auditory landscape we once called our own. Marketing and advertising have morphed from an art into a science. In the process, it’s conflated a product’s value with our own personal worth. We no longer buy a car solely because of its safety features or fuel economy. Now we give just as much credence to what the car "says" about us. We buy into a family, a cohort, an identity. This is the genius and the madness of marketing — and it swirls around us in ways our grandparents could have never imagined.

Walk into any given grocery store and the process begins immediately: The shopping cart has an advertising placard, and the handle of the cart is an ad as well. The floors lay advertising at our feet, the freezer doors carry ads, the aisles have coupon-spitting machines, the plastic order divider in the checkout lane has a strip of advertising, "cause marketing" asks for our spare change as we pay for our items, and even the back of our receipts have become one last attempt to market to us. It’s amazing we can even find our car after such a staggering commercial onslaught.

All of this marketing effort must pay off to some degree; otherwise, budgets would shift to more lucrative avenues. How does this approach and the resulting pay-off affect a person’s ability to separate the valuable message from the garbage, be rational with money, and save?

Employment Instability

I’m nearly 41. My mother and father worked for the same employer for 28 and 32 years, respectively. So far in my own work life, I’m at job number nine. Granted, calculated inconsistency in the pursuit of larger goals is not a bad thing, and some of that inconsistency is born from a better education and more choices. But another piece of that inconsistency comes from the new reality of employment: Companies are sold, off-shored, closed down, and consolidated at an alarming rate. Employer flux creates employee flux. According the U.S. Bureau of Labor Statistics, the median employee tenure as of January, 2010 was a mere 4.4 years. It seems as if the only consistent thing we do now is update our resumes. New jobs and the economic challenges in-between jobs create disruptions in our financial lives that can, over time, affect our bottom lines.

Normalization of Credit

Credit used to be a line of last resort for our grandparents’ generation. The normalization of credit without any education on the dangers of its unbridled use has arguably been the largest factor in Americans’ declining personal wealth. Our parents and grandparents may have used credit from time-to-time to take advantage of an unusually good deal, or to secure the purchase of item that would appreciate in value. Now, short-term or long-term credit is used to buy everything from cheeseburgers to cars, from jeans to haircuts. Combined with unstable employment and a boom-and-bust economy, undisciplined credit use has gone from an outlaying danger to a potential catastrophe.

Loan payments, interest rate hikes, late fees, and bruised credit ratings are like death by a thousand cuts, threatening our personal wealth and future security. Whether born of real need or simple temptation, credit has become a national addiction spawning new predatory industries and personal hardships.

America’s Shifting Industry

Decades ago, America was a manufacturing powerhouse. The goods made here were marketed and shipped all over the world. Somewhere along the line, the target for our products shifted away from the global stage and began to focus more narrowly on the domestic stage. The burden of consumption (and, thereby the majority of our economic health) fell on Americans. Consumption of domestic goods became conflated with patriotism and over-consumption was encouraged in large part because of the relatively limited domestic market. The demand for a higher volume of cheaper goods forced offshore what little manufacturing jobs remained in America and further reduced labor opportunities at home. The broad and deep markets of American goods that our parents and grandparents took for granted shrank and so did our savings.

Starter Homes

Homes are typically our largest investment, and they carry with them the opportunity to make or break our financial success. Gradually our expectations of what constitutes a suitable home have changed. We now embrace the concept of "starter homes" without question and once our children have grown and left the nest, we’re expected to "downsize." That creates three occasions to buy or sell a home over a person’s lifetime (not counting other circumstances like job transfers, divorce, etc). The purchase of a new or different home creates an opportunity to cash out some of our equity, refurnish, upgrade countertops, or move into the newest designer ZIP code. But how did our grandparents approach home ownership? Wasn’t their starter home typically their "finisher" home too? What is lost in our constant pursuit of a new (and temporary) satisfaction? How has the notion of upgrading everything from cars to closets only downgraded our leisure time and threatened our real financial independence?

These are just some of the broad stripes that have repainted our financial lives. Simplicity and frugality are personal efforts that don’t happen in isolation. Society, marketing, personal history, and wider economic realities all make the road more challenging. Our grandparents lived in a time that was harder in many ways, but easier in others. As we pursue our highly individual definitions of independence and financial wisdom, it helps to understand where we’ve been as a nation and where we’re going in order to decide how to navigate where we are right now.

This article is from Kentin Waits of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Confessions of a Minimalist: 9 Reasons I Miss My Stuff

Elizabeth Lang — Tue, 07 Apr 2009 20:30:05 +0000

Lately, I've noticed a rise in the "anti-stuff" movement. Have less. Buy less. Spend less. Need less. While this is dandy for some, I've survived with "less" for the last 7 months and, honestly, I've grown sick it.

Since September when I quit my job to travel, I have gotten by on very little. We sold or gave away all of our furniture and non-essential items.

For nearly 4 months while traveling I lived out of a carry-on size backpack. Since returning to the States in late January, I've been wearing the same 4 sweaters and living in a semi-furnished apartment. A bed, couch, and table were included. My spouse and I got by with 2 towels, 4 forks and spoons, 4 plates, and 4 glasses borrowed from my parents. (See also: Life Without a Microwave)

I believe in having less stuff, but I'm beginning to miss all the old stuff that I had. I've spent some time trying to figure out why.

It turns out there are 9 Reason I Miss My Stuff:

1. Familiarity

Do you remember the "wagon wheel table" from When Harry Met Sally? Jess and Marie argue over a hideous table and decide to get rid of it. My spouse and I argued over an ugly table. I won. The table now resides with a British woman in DC, but now I miss the familiarity of it.

2. Convenience

Sometimes you just want to curl up and read a book after dinner, and not have to wash the dishes. But then you wouldn't have clean spoons for your morning cereal.

3. Organization

Right now I have stacks of papers on a small bookshelf in our rented apartment. There are 3 other 1-foot tall stacks (no joke) sitting on my high school desk in my parent's house. I don't know where things are. Worse, I'm afraid to throw things out because I might need them sometime soon.

4. Fun/Entertainment

Automatic freezing ice cream machine. No thinking ahead required, just plug it in and go. Pure genius. I miss it. I miss my pasta maker and my non-Teflon pans. No, I never needed these items while traveling. Nor do I need them now. But wouldn't it be fun to make homemade pasta and ice cream one night?

5. Practicality

My dining room table may have been from Ikea, and it wasn't the most amazing table in the world. But by spinning and flipping, it doubled in size and we could accommodate 6 guests instead of just the two of us. Now the only table we have is a small square card table.

6. Memories

Unfolding the futon for movie nights. Three friends (no joke) who had some sort of bodily malfunction while staying overnight on that futon. The memories were countless. My futon is gone, sold to the highest bidder on Craigslist.

7. Variety

I never thought I'd grow sick of the few shirts I own that are currently not packed away. (I'm fairly boring when it comes to clothing.) But I actually miss the colors, the stripes, the variety in having more than a few shirts.

8. Time

You can't live as a vagabond forever (at least, I couldn't). Some day you will want to settle down and have stuff again. When you do, you'll find that it takes time to accumulate stuff. Sure, I could buy everything new. But I'm not one to waste (and I love a good deal) so I've spent hours on Craigslist, and at auctions and estate sales, perusing ads for rolltop desks, TVs, rugs, and chairs. If you don't want to take time to find new stuff, don't get rid of your old stuff.

9. Cost

We sold our dresser, bookcase that acted as a bedside table, and a traditional bedside table for $120 total. We purchased a new dresser, two side tables and bed frame for $600, used from a consignment shop. (Granted, they were a very nice matching set.) It's rare that you can make money selling and then re-buying an item.

I'm by no means advocating that you should start hoarding, or even that you should move everything you own across the country with you instead of selling it. But I am saying that there's something to be said for having stuff — especially familiar stuff. Getting by with less can be liberating, but there are upsides to having more.

In the end it's about finding the balance that's right for you. Don't have so much stuff that you're overwhelmed, and don't have so little that you're tempted to raid Cosco to acquire more.

This article is from Elizabeth Lang of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Designing your life

Philip Brewer — Wed, 27 Feb 2008 18:57:10 +0000

Key decisions that you make—especially when you're young, but also later—have implications that ripple through the whole rest of your life. People treat these early decisions—decisions like whether to go to college and what degree to get—as if they were unchangeable. They put them in the back of their mind and look to the future. It's true that what's past is past, but there are good reasons to keep these decisions clearly in mind when you make future decisions. It's never too late to design your life.

Most people don't feel like they designed their own life. That's where mid-life crises come from—people hit 40 and wonder how they got where they are.

There's no way around this:

If you're young, all the most critical decisions about your life were made by your parents.
If you're older, all the most critical decisions about your life were made by some kid (i.e. you, when you were younger--less wise, less experienced, and less aware of what's really important than you are now).

How can you pull a design out of that?

Be aware

First, be conscious of the implications of your decisions. They all have ripple effects, and it's worth tracing those ripples back to their source.

Take, for example, deciding to live so far from your job that you need a car. There are first-order effects from that decision—it locks in thousands of dollars a year in expenses (the capital investment, fuel, insurance, taxes, etc.), it exposes you to risks from traffic accidents, it makes it harder to get enough exercise. It also enables all sorts of other options—you can take classes in the evening, your spouse can join a club, your kids can participate in sports, you can all go on a vacation road trip.

These things all interlock in a way that makes changing the big decisions seem impossible. It isn't, though. Changing the big decision—living closer to where you work or working closer to where you live—opens up at least as many options as it closes down.

I just ran into the term "design snowball" to refer to the way any design change snowballs into dozens of changes that affect everything. I tend to think of it as a web—you can't pull out just one thread. That doesn't mean you can't change the web, though. Yes, one big change will snowball in a way that requires dozens of other changes—but making those decisions is what designing is all about.

If you don't like where you are, you can make fresh decisions that will take you someplace else. It just takes an open mind—a willingness to consider the whole range of possibilities. If you want to end up in a particular place, it also takes a keen understanding of how your decisions so far add up to the circumstance you've got now. That's why it's wrong to take these past decisions as over and done.

Not unchangeable

With the exception of the decision to have children, none of your decisions are really fixed and immutable. It's possible to go back to school (although it may entail living like a student for a few years). It's possible to live elsewhere or work elsewhere. It's possible to spend your time doing things that are important. It's possible to take charge of your life.

Some of these changes may require a long lead time. Some may be expensive. Some may require the help of other people. None of that means that it's too late to design your life.

Your life up to now may have been designed by some young kid. It doesn't have to stay that way.

This article is from Philip Brewer of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Feeling Stuck? 100 Ways to Change Your Life

Nora Dunn — Sun, 10 Feb 2008 01:25:16 +0000

You've got 20 minutes to change your life in 100 ways. Go.

This is the premise of an exercise I tried once, when I was feeling stuck in life. I wasn't sure what was amiss, but the routine I had fallen into was not satisfying the inner voice in me that insisted there was something else out there for me. (See also: Change Your Life With Storytelling)

After trying (forcefully) to understand what was going on, reading self-help books, filling out aptitude tests, and working with business and life coaches, I was given a suggestion that became a catalyst for some pretty big personal changes.

Here is how you can change your life in 20 minutes, step by step:

Clear all distractions. Turn off the phone, the TV, the computer. Lock your door, and go to a quiet place.
Sit down comfortably at a desk or table, with a blank piece of paper and a pen in front of you.
Set a timer for 20 minutes.
Go. Write down 100 things you want to do. Or careers you want to have. Or people you would like to meet. The sky is the limit.
Don't be realistic. Dream big. Write down the craziest things you can think of, as well as the things that you don't even think bear mentioning because they are so simple. Write it all down.
Work quickly. 20 minutes isn't very long, and you have 100 items to get through, if you can. Don't think about whether or not to write down an idea — just write. Write everything that comes to mind, even if it doesn't make sense. Just keep on writing, and don't stop until that timer goes off.

Something happens after about 10 or 15 minutes if you employ the exercise to its full potential. You stop caring about what specifically the ideas are, and you start to release an inner creativity that may have been locked away for a while. In an effort to get through 100 things in 20 minutes, you start to write outlandish things down that you aren't even really sure you want, but that are ideas that came to you nonetheless.

Ding! The timer goes off. No matter where you are in the process, or how many items you have written down, stop. (OK, if you are really on a roll and have a few more to write down because the juices are flowing, keep going. I won't tell.)

Leave the list alone for a day. Try not to look at it, and certainly don't revise it in any way. The following day, sit down and look at your list. How many of the items on it are feasible? Can you see your way to accomplishing any of it? Did anything come out of the list that you hadn't actually really thought of until you wrote it down in a hurried attempt to get to 100 items in the time limit? Any surprises in there?

The point of this exercise is not to create a giant and outlandish "to-do" list that never gets ticked off. Instead, it is simply to open up your mind to the idea that anything is possible, and to give you ideas that will help you to become unstuck in life.

Personally, after feeling stuck and making out my list, I identified a few ways to make positive changes in my life at the time; I joined Toastmasters because an item I wrote down was to become a public speaker. I also eventually started a blog to satisfy an inner wordsmith in me that has blossomed into a career. And ultimately, the list helped lead me to the decision to sell off everything I owned to live out my dreams of travel and adventure now.

And it all started with 20 minutes and 100 ways to change my life.

Like this article? Pin it!

This article is from Nora Dunn of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Monthly Expenses We Don't Realize We Don't Need

Nora Dunn — Fri, 26 Oct 2007 15:57:03 +0000

When you put together a frugal budget, you are usually careful to make sure you're not spending money where you don't need to. But are you getting railroaded by expenses you are bearing which you don't even realize you can avoid? Here are a few you may want to consider paring down.

Television

Okay, for some people television is not an option — it is a necessity. And if you are one of those people, that's fine. But even so, it might pay to take a close look at exactly what you are paying for and whether or not you can take up some of the slack.

I had free cable for the longest time. It was simply a matter of moving in, plugging in the tv to the cable outlet to see if it would work, and blamo — it worked! I didn't have the heart to advise the cable company that I was getting free cable, so I just kept it. Of course a few months later, the cable company realized the error of its ways and cut the cable. I thought as an exercise I'd see how long I could last without it. And you know what? With the internet I could get all the news stories I wanted and more, and although I initially missed some of my favourite shows, I didn't miss them enough to go back to paying upwards of $50/month for them.

If you are not willing to cut out the television entirely, consider cutting some of the extra services or beefed-up channel selections you have. Personally, I found my life was immensely enriched by listening to more music, reading, and socializing instead of sitting in front of the tube.

Credit Card Insurance

I recently wrote a post going into more detail about this expense, but to sum it up, more often than not it is a superfluous expense for which the benefits do not outweigh the costs.

Coffee

As per the well-known Latte Factor , those cups of java can add up! Sure, it always tastes better when you get the local brew and don't have to clean the coffee pot at home yourself, but you're paying through the nose for this service. Not only that, but every time you take away a coffee, you're hurting the environment by disposing of yet another (albeit recycled) paper cup.

Bottled Water

I just paid over $2 for a 710ml bottle of water. It's water! Shouldn't it be free? Bottled water comes from many sources and is sometimes just filtered tap water anyway, and the plastic is of such poor quality that after 6 months of shelf life the plastic actually starts to break down and leach toxins into your water! Not to mention the amount of waste used bottles are producing.

With a little forethought and preparation, you can carry a sturdy glass bottle or thermos of tap water around with you and save the astronomical expense.

Lunch

Ever since I was a child, I brown bagged yummy lunches that I looked forward to. No baloney sandwiches here — I brought left-overs! When I became an adult, I always cooked enough for dinner to yield a lunch the following day. No time was wasted in the morning getting it ready - it was already in a re-useable container in the fridge ready to go. Most workplaces have a microwave, and even if they don't, I don't mind cold stew if it will save me $10 on a mediocre lunch eaten out.

Home Phone

For the last year, I have had nothing but my cell phone as my "land line". This has worked out just fine, and I haven't missed the home phone one bit. Most cellular plans have great features and promotions that will suit your specific needs (be they long distance, lots of minutes, or a good range).

Another consideration as an alternative to the home phone is the increasing popularity of voice over IP, where you can use your internet connection to call other computers, land lines, and cell phones. Some of these services are free (or partially free) like Skype, and others you will pay for depending on your needs.

Grocery Store

The more often you go the grocery store, the more likely you are to spend over your budget. When I went shopping religiously every Tuesday evening, I had a list I'd been working on throughout the week, and I stuck to it quite effectively. Then I moved to a place more conveniently located closer to the grocery store, and thought it would be neat to just buy the ingredients only a meal or two in advance.

It may have been fun to prepare meals inspired by what I saw as I cruised the aisles, but my grocery expenses also almost doubled as a result. Not only that, but I gained weight too! Sticking to a list can save a ton of money and grief.

These are just a few among the myriad of monthly expenses we don't realise we don’t need to be doling out our dollars for. What are some of yours?

This article is from Nora Dunn of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

lifestyle changes

Why Behavior Nudges Don't Always Lead to Healthy Habits

Strong preferences

Incomplete nudges

Reactive behavior

Over-saturation

Nudges are the start, not the end

Like this article? Pin it!

Best Money Tips: Small Lifestyle Changes That Make a Big Difference

Top 5 Articles

Other Essential Reading

How to Budget When You're No Longer Broke

Beware lifestyle creep

1. Give yourself a (small) raise

2. Reassess your budget

3. Make gradual changes to your lifestyle

4. Set up automatic transfers

Going from broke to bank

Like this article? Pin it!

10 Things You Can Do Today to Be Happy

Application of the Flip Switch

1. Listen to Music That You Love

2. Call Someone Who Understands and Supports You

3. Get Into Nature

4. Meditate

5. Laugh

6. Exercise/Get in Your Body

7. Appreciate What Is Around You

8. Make a Gratitude List

9. Do an Act of Kindness

10. Create Your Own!

Like this article? Pin it!

The Two Biggest Mistakes People Make When Starting to Live Frugally

Making the Investment to Be Frugal

Off and Running...

...But Too Fast?

The Two Biggest Mistakes People Make When Starting to Live Frugally

Mistake 1: Spending Too Much Money to Be Frugal

Mistake 2: Doing Everything at Once

How to Really Start Living Frugally

Staying Motivated

Why This Isn't Your Grandparents' Economy

The Prevalence of Marketing

Employment Instability

Normalization of Credit

America’s Shifting Industry

Starter Homes

Confessions of a Minimalist: 9 Reasons I Miss My Stuff

1. Familiarity

2. Convenience

3. Organization

4. Fun/Entertainment

5. Practicality

6. Memories

7. Variety

8. Time

9. Cost

Designing your life

Be aware

Not unchangeable

Feeling Stuck? 100 Ways to Change Your Life

Like this article? Pin it!

7 Monthly Expenses We Don't Realize We Don't Need

Television

Credit Card Insurance

Coffee

Bottled Water

Lunch

Home Phone

Grocery Store