Activity: Mindfulness In Personal Finance

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Sep 30, 2014
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Activity, Behavioral Finance

Reading this NYT article about mindfulness and how reflecting for even a few milliseconds about a purchase can influence our decision-making.  Here’s the research:

A recent study by Tobias Teichert and Jack Grinband discovered that “postponing the onset of the decision process by as little as 50 to 100 milliseconds enables the brain to focus attention on the most relevant information and block out irrelevant distractors.”

By postponing the decision process you are putting “some space” between the stimuli and the response and not letting impulses dominate.  So, how about asking students to keep a spending diary over a few weeks.  The goal would be for the students to reflect on purchases as they are making them and answer questions like that:

  • What is motivating you to make this purchase?
  • How are you feeling as you think about making the purchase?
  • How do you feel at the time of purchase?

Have them go back on a weekly basis and reflect on how they feel about these purchases a week later.  Are the emotions as strong?  Do they continue to see the value in their purchase?  This activity should yield some interesting conversations.

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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