How Using Nudge Theory Helped Cut My Spending
Why making things difficult can actually be a good thing.
I thought differently about money after becoming a financial analyst 15 years ago. Despite having a degree in the subject, I still felt so naive as I saw the many ways it was used, leveraged, and optimized — for better and worse.
It was only then, after realizing the huge gains companies make through small incremental improvements in their processes, that I realized I could make huge strides with my own life as well. I saw how truly effective small changes could be with finances over large stretches of time.
I had this pesky problem with my own spending. Specifically, I was splurging on useless purchases that were crushing my savings goals. So I made a change that is rooted in academia and public policy that you can deploy today.
The origins of the new tactic
Research shows that the easier it is to spend your money, the more likely you are to spend it. Which seems fairly intuitive, right?
The insight fits perfectly with credit cards, which you can merely tap at the checkout now to pay. Small things like this, combined with an avalanche of marketing, are why our (the United States’s) credit card debt increased 1500% over 30…
