Most people are familiar with the status quo bias. In simpler terms, it simply means that people prefer things to stay relatively the same. We talk to the same people, follow the same path to work, go through the same daily routine, and so forth. We enjoy little changes – like reading a different book, going on a different trip in the summer, or watching a different movie – but radical changes? Not so much.
The only problem is that the status quo bias costs us money all the time. Because we prefer to stick with the familiar, we often choose to stick with things that are less cost-effective than the alternative. Here are nine common ways that status quo bias can cost an average person money.
1. Taking the same route to work you’ve always taken. Usually, the route to work you’ve always taken is not the most optimal one, so you’re losing cash every day simply because it’s a “risk” to try to find a better path.
2. Sticking with your old bank. If you’re getting hit with ATM fees, no interest on the checking account, and less than 1% interest on the savings account (as many people are), then your bank is gouging you. Sure, it’s convenient to stay put – you don’t have to spend a half an hour switching to a new bank – but is it worth twenty dollar bills leaking out of your pocket each month?
3. Always going to the same old grocery store. Instead of using a basic price book to actually figure out which store is the cheapest for what they buy, most people just get familiar with one store and do all of their shopping there. Even for me this is difficult – I’m trying to transition to using the much-cheaper Fareway as my primary grocery, but my natural instinct is to continue to shop at the more expensive Hy-Vee.
4. Repeatedly going out for slight variations on the same old “night on the town.” Dinner at an expensive restaurant with friends once a week adds up big time, as does a drink twice a week after work with “the gang.” They’re repeated activities that repeatedly swallow money from your pocket.
5. Stopping at the coffee shop for the daily “pick me up.” This is a routine mixed with a physical addiction to caffeine, bringing not only the status quo bias to the table, but a chemical reliance problem as well.
6. Buying the same version of the same product over and over. When you walk down the grocery aisle and buy the same version of the same item without really thinking about it, the status quo bias is at work.
7. Staying in the same house instead of looking for housing alternatives. It’s much easier to keep paying extra for your current housing than it is to look for a new place to live that might be much cheaper.
8. Keeping the same cable or satellite service. There’s a reason the cable and satellite companies offer amazing introductory deals, but their standard price after a year is really high. They know about the status quo bias.
9. Keeping the same cell phone service. Similar to the cable or satellite service, cell phone companies offer great introductory deals because they know it’s likely you’ll just stick with what you’ve got.
Fighting the Status Quo Bias
The solution to fighting the status quo bias is simple. Each week, try something new. Try a new route to work. Try finding a cheaper coffee place. Look at other options for your cable service. Do something completely different for your after-work recreation. Go to a new grocery store and see if the prices are better.
One little change, every week. Focus on repeating that change a few times without reverting back to your old path. See if it suits you and, if the old path is actually better, go back to it. Then, during the following week, seek another new routine.
Eventually, over a period of time, you’ll find yourself shaving quite a bit of spending out of your life, slowly but surely. Plus, you may have found some new routines that you thoroughly enjoy. Good luck!