It's all your fault. You’re not a baby.If you're eating too much, that's your fault. No one is shoving food into your mouth. If you're saving too little, that's your fault. No one is telling you how to spend your money. If you're gambling, that's your fault too. No one is dragging you to the casino.
We are adults. We make our own decisions. We accept the consequences. Unfortunately, there are big forces working against us. They don't take responsibility because we are supposed to have the education how to choose wisely.
On the money side, we have financial literacy but does the financial sector make more money when you make better financial decisions (see do your advisors help with your financial literacy and Pound Foolish).
On the food side, we have eating guidelines. On the gambling side, we have warnings.
The Other Hand
Unfortunately, we also face temptation wherever we look. Isn’t that the purpose of marketing, advertising and sales? There are ways to manipulate us and deplete our willpower (see Dan Heath explain the radish experiment). Our decisions suffer.Food companies earn more when we eat more. Unfortunately obesity rates keep increasing. In the US, 35.7% of adults are already obese and the trends aren’t changing (Reuters, Sep 2012). Food consumption has increased 600 calories a day since 1970 and bagels have doubled in size since 1990 (Reuters, Sep 2012). In Canada, adult obesity is at record highs (Toronto Star, Feb 2013). Maybe food is a factor?
Financial companies earn more money when we buy high margin products like mutual funds. Casinos and governments win when we gamble.
Shareholders demand profits. You expect them to but there are consequences. Since habits start young, even children get targeted. Within three years of a new 1988 campaign, 90% of six year olds knew about Joe Camel (Seattle Times, Dec 1991). Market share among underage smokers grew from under 1% to over 32% (Wikipedia).
Big Food advertises to children and the offerings are not always healthy choices. Taco Bell proposed a fourth meal between dinner and breakfast — and not fruit or veggies (AlterNet, Nov 2012).
Better Decisions
Rather than waiting for the world to change, we need to make ourselves understand how the world works. That helps us make better decisions. Since we are responsible for the outcome, we might as well learn how to decide better. Decisive, the new book from Chip and Dan Heath may help (my blog post).Lots of research goes into how we make decisions … and gets used against us. It's worthwhile understanding how irrational we are. Dan Ariely is running a free course over the next 6 weeks on Coursera: a beginners guide to irrational behavior. Sign up here.
Links
- Why we get bad advice
- Where there’s willpower, there’s a way
- Do your advisors help with your financial literacy
- If you have/had/want money, read Pound Foolish
- What’s worse than fine print?
- Why advisors become advisors
- Unethical email? Do advisors put their interests ahead of yours?
- How advisors fool you (and what you can do)
- image courtesy of Francois du Plessis
Podcast 213
direct download | Internet Archive page | iTunes
PS This weekend, the Easter Bunny is making temptation tough to resist.
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