Tess Vigeland: So both of these examples featured both large and small ways to downsize your lifestyle and gain a little more control over your financial future, even if you are not the Federal Reserve. But by downsizing, you are, naturally, denying yourself something, right? We wondered how long it might take the typical downsizer to decide they want a cookie! And an iPad!
Matt Wallaert is behavioral scientist with the firm Churnless and he’s here to help answer that question. Matt, welcome to the show.
Matt Wallaert: Thank you.
Vigeland: So we’ve just heard some things that folks are doing to get their spending down, really in an effort to perhaps have some control over their financial lives when there’s so much that is out of our control these days. But generally, are these kinds of changes, the kind that will last?
Wallaert: So, when you hear people doing things like downsizing to a smaller home or moving to a cheaper car, those are great, because they’re big structural changes. You make them once and then they repeat and they’re environmental. And you’re not constantly struggling with your own self-control and your own self-will. We talk about things that are more behavioral, like going out to eat less or trying to make smaller discretionary purchases. Those are things where you’re constantly having to re-make a decision and always struggling against yourself. And those are harder to upkeep.
Vigeland: I suppose that makes sense. Those are daily struggles versus a one-time decision to move or downsize your car.
Wallaert: Absolutely. Environments are a key place where people can make structural changes that can have long-lasting economic effects for them.
Vigeland: You know, we’ve also wondered about this phrase that keeps popping up, which is frugal fatigue. And this is the notion, yes, you can deny yourself from going out to dinner for weeks and months on end. But at some point, aren’t you going to break?
Wallaert: Yeah. So I think that’s key. And again, I like the word “fatigue,” because it reminds people of the other exertions in their life. Making a decision, any decision, actually burns some energy. And there’s some research that suggests that it even burns glucose in the brain. As people make decisions, each successive decision that they make without time to rest tends to get worse and worse and worse and you’re always struggling again yourself. So that can literally be exhausting. And that’s why I like the idea of structural changes because you make the changes once and then you’re not constantly remaking the decision everyday, everyday, everyday. And that’s what gets tiring to people.
Vigeland: That is the advice that you sometimes hear with dieting, where if you keep denying yourself, you’ll eventually you’re gonna get sick of it. So go ahead and have half a cookie.
Wallaert: Right, absolutely. Or a Hershey’s kiss, you just don’t have to have the whole bag.
Vigeland: So it sounds like kinda when you shut off every little piece of frivolousness, you’re gonna have some sort of reaction to that.
Wallaert: Absolutely. And I think that… I’m struggling with this answer, because I really want to say a thing that you’re really not allowed to say on radio. We have a name for this phenomenon, where people have this catastrophic breakdown. We sort of artificially call it — and you can beep me in a second — “the f*** it all” phenomenon. And so basically what happens is that people get so low and they try to so hard that then, there’s this catastrophic failure, where they just throw their hands up in the air and say, “F*** it, I’m going on vacation.”
Vigeland: So how do you deal with that? Our premise here is that with all this crazy stuff going on in the world, particularly in our financial markets, that you know, maybe one way you can take control is by downsizing, by reducing your spending, by making yourself feel better about your financial position. What’s the best way to do that effectively then?
Wallaert: The best place to start with your financial situation is to make sure you know what it is. Have you sat down and done a budget? Have you actually looked at where your money is going? You know, we sometimes talk about things in three buckets — the needs, the wants and the nice-to-haves. So sometimes, I recommend people actually sit down, look at where their money is going and make sure you have all your needs, some of your wants and a few of the nice-to-haves. And you want to make sure that’s happening. Because if you’re just doing the need bucket, that’s not sustainable over the long term. No one wants to live that lifestyle and eventually you’re just not going to be able to sustain your motivation. It’s a little like running a marathon. You don’t start the first day and try and run 20 miles. You work yourself up to a place where you’re ready.
Vigeland: But what if you’re really, really impatient like me? I wanna run my marathon tomorrow!
Wallaert: And how many marathons have you run?
Wallaert: Exactly, right? Your patience is your enemy here. I think that that’s the real problem is that any kind of long, permanent, lasting change you’re making your life requires some patience.
Vigeland: Alright. Matt Wallaert is a behavioral scientist and lead scientist at the firm Churnless. Thanks so much for coming in. It’s been fun.
Wallaert: Thank you Tess.
Vigeland: We’ve got more tips on downsizing your lifestyle in tough times on our Makin’ Money blog.
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