Today on the podcast is behavioral economist Dr. Sarah Newcomb, the author of Loaded: Money, Psychology and How To Get Ahead Without Leaving Your Values Behind. It's a thought-provoking book that focuses less on the mechanics of managing money and more on the psychology. Specifically, Sarah challenges us to look inward to identify the narratives or stories that we tell ourselves about our relationship to money. These stories can help us or sabotage our financial lives but the first step is figuring out what's already playing in the background. She shares a very personal story about how her money narrative got in the way of chasing her dream. You will walk away with new ideas on how to think about budgeting, set up a Freedom Fund, avoid "keeping up with the Joneses" and encourage young people to save for retirement. Enjoy!
- 0:00~1:20 - Introduction
- 1:20~2:09 - Background
- 2:09~4:43 - Interest in behavioral finance
- 4:43~10:12 - Behavioral finance in her own life
- 10:12~12:39 - Understanding how to create new stories about our money lives
- 12:39~14:13 - How social media affects our money attitudes
- 14:13~16:35 - How lottery winners impact a neighborhood
- 16:35~29:45 - Highlights from her book,"Loaded," and her budgeting techniques (it's not needs and wants!)
- 29:45~30:09 - A word from our sponsor, Next Gen Personal Finance
- 30:09~34:44 - Financial advisors and budgeting
- 34:44~39:25 - How to avoid the "Keeping up with the Joneses" mindset
- 39:25~39:58 - Best thing purchased under $10
- 39:58~41:06 - Favorite behavioral economists
- 41:06~46:00 - How to get young people to think about saving for retirement
- 46:00~46:49 - Favorite books
- 46:49~47:21 - Text to every high school student
- 47:21~48:04 - Final thoughts
- 48:04~48:58 - Conclusion
- "Budgeting feels like a diet because it is all about cutting things. No one wants to be on a diet so I made budgeting feel better"
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.