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Behavioral Economics

Five Steps to Pocket Change: How to Persist When Your Finances Get the Best of You

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The following guest post was contributed by Heidi Beckman. Heidi is a clinical psychologist and proponent of using the science of personal change to improve financial habits. She has been reading and interpreting research on motivation, persistence, and self-control for the past ten years. She works in a medical setting and loves to help patients use simple motivation strategies to ... Read More »

Financial Literacy Not a Band-Aid to Change All Factors for Smart Money Management

Figure 1: Financial Literacy and Financial Product Ownership - Difference between the lowest 20% of financial literacy scores and the top 20% of financial literacy scores

photo © 2010 Alan Cleaver | more info (via: Wylio)The Centre for Corporate Law and Securities Regulation in conjunction with The University of Melbourne released a Research Report in March 2011 about Financial Literacy and “What Causes Suboptimal Financial Behaviour? An Exploration of Financial, Social Influences and Behavioural Economics”. This following article will showcase their report and findings. All quotes ... Read More »

Dan Ariely and I Sit Down and Talk About the Behavioral Economics of Getting Out of Debt

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Dan Ariely, a world recognized behavioral economist and I had an opportunity recently to sit down and talk about a number of issues and underlying unconscious choices that lead people in debt to make good or bad decisions in dealing with debt. Dan talks about the mistakes the financial services industry makes and the best approach to controlling spending to ... Read More »

Don’t Stop Shopping for Fun When You Can Spend Less and Get a Bigger Emotional Benefit

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The other day I was sitting in the office of Dan Ariely at Duke University and we were chatting about behavioral economics from the point of view of getting out of debt. During the conversation the comment was made that if people became aware of the connection between spending and the “high” or good feelings they experienced as a result, ... Read More »

Demand for Consumer Debt Rises Says TransUnion

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photo © 2009 Adam Baker | more info (via: Wylio)I will boldly go on the record and say that while there have been some fundamental shifts towards minimalism as a result of the economic downturn, those trends will reverse themselves if consumer confidence increases and credit becomes easier to access. I’m not being sanguine here, just a realist. People are ... Read More »

Shop-O-Nomics: How the Missing Dollar Sign Makes You Spend More

I’m giving your reading muscles a break today and instead of writing you an article here’s a video based on a study put out by Cornell University in 2009 about the “Effects of Menu-price Formats on Restaurant Checks“. The study suggested that people were more inclined to purchase and spend more if the dollar sign ($) was dropped in front ... Read More »

Money Can Buy Happiness

For those of you that say money can’t buy happiness. I will tell you today what I’ve said my entire life: I’d like to believe you, but I don’t. The National Academy of Sciences released a research report this past Tuesday that showed people’s happiness and emotional well-being elevated with increasing income levels. The study, supported by the Gallup Organization ... Read More »

Who Do You Think Cheats More: Bankers or Politicians?

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I was doing some research on Dan Ariely, a fabulous behavioral economist who I’m hoping to interview. In my research I came across the video below. So before you watch it. Who do you think cheats more, New York bankers or Washington politicians? Get Out of Debt Guy – Twitter, G+, Facebook Read More »

Are Humans Innately Risky With Money? Or Is It All Just Monkey Business?

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Today I bring to you a video from the TEDGlobal 2010 (TED, standing for, Technology, Entertainment and Design, is a small nonprofit devoted to “Ideas Worth Spreading”) in Oxford, England entitled “A monkey economy as irrational as ours”. I will be the first to admit, when I see a video that is just shy of 20 minutes in length, I ... Read More »

If a Woman Touches a Man He’s More Likely to Take Bigger Financial Risks

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You may have read the headline for this post and said “of course it does.” But a recent study published in “Psychological Science” found that if a woman patted a man on the shoulder that he would be willing to take higher financial risk than if she had not touched them at all. For women, it didn’t make much of ... Read More »

Spending More Than You Can Afford and Sex — It’s a Guy Thing

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I was doing a little light reading yesterday and came across a great article all about how guys that are trying to attract women are much more likely to spend a significant amount more of items of conspicuous consumption than guys not trying to get, ah, laid. Seriously. And me, before I leave you feeling like you alone had sexual ... Read More »

Save Money Shopping. Don’t Touch Stuff.

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Really smart brilliant people design retail chain stores knowing the hidden tricks that will lead you to spend money when you don’t want to. For some people it is the subtle chocolate chip cookie smell pumped into women dressing rooms that spokes sales or just laying out merchandise so you can easily touch it. Here is story all about the ... Read More »

Advertisers Are Way Smarter Than You in Getting You to Spend Money When You Didn’t Want To

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I’ve written a lot about how shopping malls, and stores are deigned to intentional trigger your subconscious impulses to get you to spend money. And then when people do, they are cursed by their creditors for being irresponsible. Granted all spending is not beyond our control, but some formulas to make you buy are very devious. How about chocolate chip ... Read More »

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