NETRALNEWS.COM - An app can help you order a pizza, find a parking spotor plan your retirement.
In more than a dozen recent experiments, Duke University behavioral economist Dan Ariely used mobile apps and simple tenets of psychology to help people save more money, pay down more debt and devise and stick to budgets.
Overall, Dr. Arielys research at the universitys Common Cents Lab shows that people enrolled in the behavioral interventions spent less and saved more than those who werent.
We face more temptation now than ever to spend money, he says. While very few forces help us plan for the long term, lots of forces want something from us right now, including text messages and apps that market products including games and music.
Heres how to replicate some of the results in your own life.
Round Up When Budgeting
Few people like to budget. The task becomes more tedious when expenses are difficult to add quickly in your headlike a $1,024.71 monthly mortgage and a $354.43 student-loan payment.
To test ways to make budgeting easier, Common Cents sent emails to 3,000 randomly selected users of EarnUp, an app that helps people pay off debt earlier by automating their payments, among other things.
The researchers asked half the participants to consider rounding up their mortgage paymentsfor example, to $1,050 from $1,024.71. They urged the rest to overpay by the same amount$25.29.
The round-up group had 37% more takers than the group asked to overpay, according to Common Cents co-founder Kristen Berman. She says the approach simplifies mental accounting and retires debt sooner, while overpaying only accomplishes the latter.
By paying an extra $25 a month, someone with a $310,000, 30-year mortgage at 3.76% can save more than $7,000 in interest and extinguish their debt a year early.
Stick to a Weekly Budget
People with a budget tend to adhere to a monthly time frame. But using weekly spending targets can better prevent overspending and under-saving.
Consider an experiment Common Cents conducted among food-stamp recipients. Those given a weekly spending budget stretched their benefits three days longer, on average.
A shorter time frame allows us to better understand trade-offs, says Ms. Berman.
A $20 grocery bill may feel like no big deal to a person who has just received an average households monthly food-stamp allowance of about $250. But when considered in the context of a $62-a-week spending goal, $20 feels significant, says Ms. Berman.
To keep from overspending, download a budgeting app like Qapital or Digit, which can sync to a bank account. And select a weekly rather than monthly goal by using Qapitals spend less rule and Digits goalmojis.
Dr. Ariely is on Qapitals board, and he is an investor in the company.
Save Windfalls Now
It is easier to pledge to save $1,000 next year than it is to save $1,000 today. The problem occurs when the future becomes the present. Then it becomes harder to keep the pledge.
Thats because choosing to save now means forgoing immediate gratification. People typically see the future in less-vivid terms than the present.
They gloss over future temptations they are likely to faceand wrongly assume they will be able to save more than they do today. To solution can be to commit sooner rather than later to saving a portion of future windfalls.
That includes raises, bonuses, tax refundsand those extra paychecks in months with an additional payday. In one experiment, Common Cents found that participants who pledged to save some of their tax refunds in February chose to put away 15%, on average, versus 10% for those asked to save on the day the Internal Revenue Service sent the money.
Thats a 50% increase based solely on when people were asked to save, says Ms. Berman. (Three months later, an average, across both groups, 85% of the savings were still in the participants accounts.)
Need help pre-committing? Try budgeting app Digits goalmoji feature.
Use Different Accounts for Different Goals
Many people deposit all of their nonretirement savings into one all-purpose bank account. But the tactic can make it psychologically easier to justify using the money for luxuries (a fancy new TV) or unplanned expenditures (new tires).
The trade-off becomes clearer if buying that TV means raiding savings earmarked for a specific purpose, such as early retirement or a Hawaii vacation.
Several programs, including Simple, Qapital and Digit, make it easy to save in separate subaccounts, often called envelopes. To protect your retirement savings, envelopes can be added for often-overlooked current expenses, such as car repairs.
Common Cents is helping customers of a credit union use envelopes to encourage them to create rainy day funds. Dont just label your envelope car, says Qapital Chief Executive George Friedman. To motivate yourself, say what kind of car you want, attach a picture, and share it with a friend.
The rest is here:
How to Boost Your Savings With Behavioral Science and Apps - Netralnews
- Dan Ariely: It’s OK to cheat and steal (sometimes) - April 7th, 2010 [April 7th, 2010]
- Full Sail Behavioral Science Leadership Podcast - August 27th, 2011 [August 27th, 2011]
- Full Sail Behavioral Science Passion - August 27th, 2011 [August 27th, 2011]
- 13H Refutes CCHR: Industry of Death (Behavioral Science) - August 28th, 2011 [August 28th, 2011]
- College of Social and Behavioral Science - August 28th, 2011 [August 28th, 2011]
- GB: Behavioral Science Bill For Propaganda - August 29th, 2011 [August 29th, 2011]
- Criminal Minds - The Behavioral Science Part 2 - August 31st, 2011 [August 31st, 2011]
- Santhula Hospital - A clinical and research center for Nuero-behavioral Science - August 31st, 2011 [August 31st, 2011]
- Behavioral Science Self-Assesment Project - September 2nd, 2011 [September 2nd, 2011]
- Behavioral Science: OPTIMAN - September 3rd, 2011 [September 3rd, 2011]
- Forget the Cinderella effect: stepparents are just as likely to kill their biological children as their stepchildren - September 4th, 2011 [September 4th, 2011]
- The Behavioural Science Blog in 2010 - September 4th, 2011 [September 4th, 2011]
- introduction to behavioral science - September 4th, 2011 [September 4th, 2011]
- CSU's Behavioral Sciences Building - September 5th, 2011 [September 5th, 2011]
- Criminal Minds Season 2 - Backstage - Behavioral Science Real-life Criminal Minds (1 of 2) - September 6th, 2011 [September 6th, 2011]
- Behavioral Science: Goldielocks - September 6th, 2011 [September 6th, 2011]
- Dean Welcome Message - CalSouthern School of Behavioral Sciences - September 7th, 2011 [September 7th, 2011]
- Criminal Minds - The Behavioral Science Part 1 - September 9th, 2011 [September 9th, 2011]
- TEDx Bandung-Roby Muhamad-Socio Behavioural Science - September 14th, 2011 [September 14th, 2011]
- How Behavioral Science Applies to Marketing - Jason Anello - September 14th, 2011 [September 14th, 2011]
- Public Health Behavioral Science - September 15th, 2011 [September 15th, 2011]
- Full Sail Behavioral Science Video - September 15th, 2011 [September 15th, 2011]
- Introduction to Behavioural Science - September 15th, 2011 [September 15th, 2011]
- University of Arizona College of Social and Behavioral Sciences Commencement Speech - September 17th, 2011 [September 17th, 2011]
- Introduction to Behavioral Sciences OSPE - September 17th, 2011 [September 17th, 2011]
- Get to know NAU's College of Social and Behavioral Sciences - September 20th, 2011 [September 20th, 2011]
- 3 Minute Thesis 2010 runner-up - Will Harrison, Faculty of Social - September 24th, 2011 [September 24th, 2011]
- New Behavioral Sciences Building at Colorado State University - September 27th, 2011 [September 27th, 2011]
- Intro to Psych Statistics - September 28th, 2011 [September 28th, 2011]
- Why Do Voles Fall in Love? - September 29th, 2011 [September 29th, 2011]
- Behavioral Science: What problems do you have in your life? - September 30th, 2011 [September 30th, 2011]
- Behavioral Solutions for Climate - October 3rd, 2011 [October 3rd, 2011]
- College of Social and Behavioral Sciences (SBS) 2010 Senior Celebration - October 4th, 2011 [October 4th, 2011]
- Enhance Student Teaching Podcast - Full Sail University Behavioral Science Class - October 4th, 2011 [October 4th, 2011]
- Music and the Brain: Depression and Creativity Symposium - October 4th, 2011 [October 4th, 2011]
- Experiment Test - October 4th, 2011 [October 4th, 2011]
- Helen Palmer and The Enneagram - October 4th, 2011 [October 4th, 2011]
- Rapid Learning: Behavioral Science And Patient Treatment - Behavioral Physiolgy - October 4th, 2011 [October 4th, 2011]
- Meet Nicole in the Colorado State University Behavioral Sciences Building - October 4th, 2011 [October 4th, 2011]
- Life As A Full Sail Student Ep. 5 (Behavioral Science) - October 5th, 2011 [October 5th, 2011]
- Happy holidays from your friends in the College of Business and Behavioral Science - October 5th, 2011 [October 5th, 2011]
- Behavioral Science Jumping Hurdles Full Sail University - October 5th, 2011 [October 5th, 2011]
- Dr. Meera Narasimhan on Mental Illnesses - Part 1 - October 5th, 2011 [October 5th, 2011]
- Science needs you: Test your word power on iPhone / iPad with Science XL free app - October 5th, 2011 [October 5th, 2011]
- Definition of Culture - October 5th, 2011 [October 5th, 2011]
- OSP Presentation: Bou's Clues (University of Santo Tomas, Behavioral Science) - October 6th, 2011 [October 6th, 2011]
- Behavioral Sciences OSPE Part 7: Informational Care - October 6th, 2011 [October 6th, 2011]
- Criminal Minds Season 2: Behavioral Science - October 7th, 2011 [October 7th, 2011]
- Behavioral Science - York College CUNY - October 7th, 2011 [October 7th, 2011]
- Miswakology Behavioral Sciences - October 7th, 2011 [October 7th, 2011]
- Criminal Minds Season 2 - Backstage - Behavioral Science Real-life Criminal Minds (2 of 2) - October 11th, 2011 [October 11th, 2011]
- Behavioral Science (A Lesson In Self Control) - October 12th, 2011 [October 12th, 2011]
- BEHAVIORAL SCIENCE LECTURE 1 - Video - October 13th, 2011 [October 13th, 2011]
- TEDxGoodenoughCollege - Jan-Emmanuel De Neve - The Genetics of Happiness - Video - October 13th, 2011 [October 13th, 2011]
- Using Denial to Cope with Grief and Depression - Winifred Gallagher - Video - October 13th, 2011 [October 13th, 2011]
- How To Survive Full Sail University - Video - October 14th, 2011 [October 14th, 2011]
- Life Positive Expo 2008 Appreciate Inquiry with Dr. Wasundhara Joshi and R Sankarasubramanyan - Video - October 14th, 2011 [October 14th, 2011]
- Dr. Meera Narasimhan on Mental Illnesses - Part 3 - Video - October 14th, 2011 [October 14th, 2011]
- Learning and Memory - Video - October 16th, 2011 [October 16th, 2011]
- Behavioral Science Proposal - Video - October 17th, 2011 [October 17th, 2011]
- 13H Refutes CCHR: IOD (Chapter 7) Psychosurgery (1/2) - Video - October 23rd, 2011 [October 23rd, 2011]
- 13H Refutes CCHR: IOD (Chapter 8) Psychiatric Drugs (1/2) - Video - October 23rd, 2011 [October 23rd, 2011]
- OUTDATED : Psychology and Behavioral Sciences Collection - Video - October 24th, 2011 [October 24th, 2011]
- CSUDH College of Natural and Behavioral Sciences - October 24th, 2011 [October 24th, 2011]
- Behavioral Science - October 24th, 2011 [October 24th, 2011]
- Behavioral science project. ( just one part of it) - Video - October 24th, 2011 [October 24th, 2011]
- Ramp Modeling for Dickies (UST- Behavioral Science Presentation) - Video - October 24th, 2011 [October 24th, 2011]
- Search in Psychology and Behavioral Sciences - PSCY 2301 - Video - October 25th, 2011 [October 25th, 2011]
- Forgiveness: Jesus vs Behavioral Science - Video - October 25th, 2011 [October 25th, 2011]
- PsyD Graduate Discusses her Learning Experience at CalSouthern School of Behavioral Sciences - Video - October 25th, 2011 [October 25th, 2011]
- Behavioral Science Statistics: One Sample and Dependent t-te - Video - October 26th, 2011 [October 26th, 2011]
- Full Sail University Behavioral Science Self-Awareness Exercise - Video - October 26th, 2011 [October 26th, 2011]
- FBI Behavioral Science Unit Interview - Part 2 - Video - October 26th, 2011 [October 26th, 2011]
- Full Sail BS Lab 2 Proposal - Video - October 27th, 2011 [October 27th, 2011]
- Full Sail University-Behavioral Science- Jumping Hurdles Project - Video - October 27th, 2011 [October 27th, 2011]
- Being Human - Behavioral Science Project - Video - October 27th, 2011 [October 27th, 2011]
- Behavioral Sciences OSPE Part 3: Compliance - Video - October 27th, 2011 [October 27th, 2011]
- Behavioral Science Film Fest feat. BSA1D '09 - Video - October 28th, 2011 [October 28th, 2011]
- Dan Pink Plenary Speaker Landsdowne Residency, March 2010 - Video - November 7th, 2011 [November 7th, 2011]
- Psychology and Behavioral Sciences Collection - Video - November 8th, 2011 [November 8th, 2011]