Psychology

Some Thoughts on the “Lake Wobegon” Effect

Where the women are strong, the men are good looking, and all the children are above average. – Garrison Keillor, A Prairie Home Companion Sure, that line is used for laughs on NPR on Saturday afternoons to describe the placid, fictional Lake Wobegon, but the humor points to a rather serious matter: people constantly overrate …

Review: Mindset

Every other week, The Simple Dollar reviews a personal development, personal productivity, or entrepreneurship book of interest. At first glance, Mindset by Dr. Carol Dweck seemed to be one of those pop psychology books that I usually avoid – another The Secret or The Power of Positive Thinking. Books along those lines just repeat the …

How the Foot-In-The-Door Technique Costs You Money

A few weeks ago, I received a simple request from a person I know in the community. She asked me to go to a website and sign a simple petition on behalf of a cause she’s passionate about. She explained the cause in detail and provided the URL, making it really easy for me to …

Categories: Psychology

Some Thoughts on the Sunk Cost Fallacy

Categories: Psychology

Living and Saving in the Moment

My three year old son loves to go to the grocery store with Mom and Dad. He wanders around with us, listening to our discussions about which products to buy, and quite often expresses his own opinions. He’ll remind us that he loves V8 Fusion (our preferred fruit juice, since it’s 100% and also is …

How to Organize and Host a Frugal Block Party

One of the biggest reasons I like living where I do is that two or three times a summer, someone hosts a block party. The format is pretty simple – bring a side dish, grab a plate, fill up, and talk to people. Yet, I know from watching the hosts, the actual hosting can be …

Categories: Frugality, Psychology

Debt Repayment and Frugality as Obsession: It Depends on How Your Brain Works

Yesterday, J.D. Roth at Get Rich Slowly posted an interesting article about whether repaying debt should be an obsession. His conclusion, to put it succinctly, was no: When a person decides to make a lifestyle change — financial or otherwise — there’s a temptation GO ALL OUT. With the zeal of a new convert, you …

Categories: Debt, Psychology

Letting Go: How Being a Control Freak Costs You Money

I’m something of a planner. I can’t help it – I always like to make plans for the future. I fill up my calendar with all sorts of little details and I’m always making lists. My mother does the same thing, actually. She’s constantly making lists and jotting down notes. She’s always been the person …

Confirmation Bias and Your Money

Over the last few weeks, I’ve been involved in a very interesting discussion with a reader who wanted to know why I thought index funds were such a great investment strategy. I pulled out a huge array of quotes and experts that support my claim. A sampling: Deep down, I remain absolutely confident that the …

Categories: Psychology

The Stroop Effect and Your Wallet

Let’s try a little psychology experiment. In the image below, read out all of the colors, not the words themselves. You can say them out loud, or in your head. Now, try the same for this batch of colored words. Remember, say the color, not the word itself. It’s at least a bit harder, isn’t …

Categories: Careers, Psychology

Review: Fight for Your Money

Every other Sunday, The Simple Dollar reviews a personal finance book. I’ve reviewed quite a few David Bach books over the years: The Automatic Millionaire, Smart Couples Finish Rich, Start Late, Finish Rich, Smart Women Finish Rich, and Go Green, Live Rich. Bach writes in a very approachable tone, but many of his earlier books …

Review: You’ve Got to Be Believed to Be Heard

Over the next several months, I’m giving several presentations and speeches on my story and what I learned about personal finance along the way. Some of these engagements will be paid ones, thus this may be the beginning of a new revenue stream in my life. As with anything new in my life, I’m filling …

Review: Results Without Authority

Every other Sunday, The Simple Dollar reviews a personal development, personal productivity, or career/entrepreneurship book. One of the biggest struggles I had at my previous job was finding ways to get the project results I needed with very little authority to do many of the things I needed to do. I had a lot of …

The Cost of the Psychology of New

My wife and I are actively in the process of purchasing a replacement for the car my wife uses for her commute. During our initial search, we focused pretty tightly on late model used options, but as we searched, we began to find that, for many of the models we were looking at, the new …

Riding the Line of Overcautiousness

Over the last few months, I’ve made the conscious decision to investigate long term disability insurance and long term care insurance for myself to help my family survive if I were to become incapacitated for some reason. I’ve been quietly collecting quotes on these insurance types and reading up on them so that I really …

Categories: Psychology

An Impulsive Mood

A few days ago, I was in a pretty down mood. I mostly just wanted to curl up somewhere and hide from the whole world. I felt like a failure, mostly in a professional sense, but in a bit of a personal sense as well. I was really doubting my ability to write anything that …

Categories: Psychology

A Mother’s Gifts

Recently, my mother celebrated her birthday in her usual quiet fashion. She likely never mentioned the day to anyone, remaining just happy to receive a few calls and a gift or two from the people who remembered on that day. That’s just her style. When I was young, my mother was always the person in …

The Intelligent Investor: A General Approach to Security Analysis for the Lay Investor

This is the twelfth in a weekly series of articles providing a chapter-by-chapter in-depth “book club” reading of Benjamin Graham’s investing classic The Intelligent Investor. Warren Buffett describes this book: “I read the first edition of this book early in 1950, when I was nineteen. I thought then that it was by far the best …

Review: Get Everything Done

Every other week, The Simple Dollar reviews a personal productivity, personal development, or entrepreneurship book. A few months ago, I was very pleasantly surprised by Mark Forster’s personal productivity book, Do It Tomorrow. Most of the time, when I open up a personal productivity or time management book, I can pretty much predict what the …