Passion Struck with John R. Miles - Dr. Scott Rick on Should You Marry for Love or Money? EP 398

Starting point is 00:00:00 coming up next on PassionStrike. So the more activity we saw in the insula, the less likely people were to buy the item. It was as if we were seeing this distress signal saying, stop, don't do it. And it was evidence in our mind that there is what is called a pain of pain that kind of serves as the brakes. Like the more distress we have, the less likely we are to spend.

Starting point is 00:00:22 And we think tightwads are particularly saddled with this pain of pain, this distress. Welcome to PassionStruck. Hi, I'm your host, John Armiles, and on the show, we decipher the secrets, tips, and guidance of the world's most inspiring people and turn their wisdom into practical advice for you and those around you. Our mission is to help you unlock the power of intentionality so that you can become the best version of yourself. If you're new to the show, I offer advice

Starting point is 00:00:54 and answer listener questions on Fridays. We have long-form interviews the rest of the week with guest-ranging from astronauts to authors, CEOs, creators, innovators, scientists, military leaders, visionaries, and athletes. Now, let's go out there and become PassionStruck. Hello everyone and welcome back to episode 398 of PassionStruck, consistently ranked by Apple as one of the top 10 most popular health podcasts, and the number one alternative health podcast. Thank you to all of you come back to the show every single week to listen and learn

Starting point is 00:01:25 how to live better, be better, and impact the world. I have a special invitation for you. I'm excited to introduce our new passion struck quiz. It's a unique opportunity for you to discover where you stand on the passion struck continuum. Are you an orchestrator who's masterfully balanced in various aspects of life with passion and purpose where you evank with your conquering challenges

Starting point is 00:01:43 and turning obstacles into opportunities? Take the quiz on passionstruck.com and find out which one resonates more with your journey to living a passion struck life. If you're new to the show, thank you so much for being here, or you simply want to introduce us to a friend or a family member, and we love it when you do that. We now have episode starter packs, which are collections of our favorite episodes that we organize in the convenient playlist to give any new listener a great way to get acclimated. Everything we do here on the show. Just go to Spotify or cashinstruct.com slash starter packs to get started.

Starting point is 00:02:09 And in case you missed it, earlier in the week I interviewed Jen Drummond, author of the new book, Break Proof, Seven Strategies to Build Resilience and Achieve Your Life Goals. Through our discussion, I guide you on Jen Drummond's Adacious Journey to Conquer the Seven Second Summits. With no prior experience in mountain climbing, Jen set out to achieve a feat, considering by many, is insurmountable. This isn't just an interview, it's a vivid testament to the unyielding human spirit, a narrative that echoes the essence of a true go-getter, and underscores the final importance of maintaining life balance,

Starting point is 00:02:37 setting ambitious goals, and embracing the fullness of life. And if you liked that episode, or today's, we would so appreciate you giving it a far-star rating and review. They go such a long way in strengthening the passion-struck community where we can help people create an intentional life and I know we and our guests love to hear your feedback. Today in this bonus episode works boring a topic that's as essential as it is often overlooked, the complex financial dance of intimate relationships. Joining us to Scott Rick, a renowned behavior scientist from the University of Michigan's Ross School of Business, and the author of the groundbreaking guide, Tightwods and Spendthrift.

Starting point is 00:03:09 Have you ever pondered the intriguing yet challenging scenario of a Tightwod and a Spendthrift navigating life together? This is the crux of our discussion today. Scott Rick has delved deep into this subject, recognizing the way that couples handle their finances and how it can either be a path to harmony or a breeding ground for conflict. Our interview blends scientific research and practical advice to help couples understand and transform their financial behaviors.

Starting point is 00:03:33 Through his extensive research and insight, Scott addresses the crucial questions that arise when partners with different spending habits come together, and a couple consisting of a tightwad and a spend-thrift financial piece. Scott's answer is an optimistic yes, but it comes with the caveat of engaging in honest, sometimes tough conversations about financial priorities and decision-making processes. We'll also delve into the heart of these financial differences, exploring how understanding your own and your partner's financial psychology is key to our harmonious relationships. Scott will also guide us through developing a solid game plan for couples to navigate

Starting point is 00:04:04 their financial decisions together, ensuring a balance and happy life for both height wads and spend for us. So whether you're careful with every penny or love to adopt, this episode is set to offer valuable insights into managing money in a way that strengthens rather than strange your relationship. Thank you for choosing PassionStrike and choosing me to be your host and guide on your journey to creating an intentional life now. Let that journey begin. I am so excited today to welcome Dr. Scott Rick on PassionStrock. Welcome, Scott. Thank you so much, John, for having me. I'm excited to be here. Well, today we're going to be discussing the script book that I have in my hands titled tight wads and spend thrips navigating the money minefield in real relationships.

Starting point is 00:04:48 Congratulations. Thank you so much. It's been an exciting journey. I guess that begs the question. What got you interested in studying how people balance their financial and psychological well-being? A lot of my work is inspired by real life events. And I had a childhood surrounded by

Starting point is 00:05:07 spin thrifts. I'm a spin thrift raised by spin thrifts and noticed over time that not everyone behaved that way other families seem to have different approaches. They didn't spend their summers in Vegas like we did. And so I got curious about what makes everyone tick? How does someone become one extreme or the other? And later in life, I ended up marrying a Taiwan. And so I got interested in how couples can navigate those differences.

Starting point is 00:05:38 And more recently, we've had kids. And there's a chapter in there about how parents can raise children to be tightwads or spend for us perhaps unintentionally despite what they might tell the kids to do. The kids are picking up on what they see the parents do. Yeah, a lot of it is research. It's very much inspired by my own kind of curiosities and struggles and that kind of thing. Okay, well, I think it's important that we define both terms because we've all heard of people who spend money conservatively and we describe them as stingy or cheap or amizer or since

Starting point is 00:06:12 we're coming out of the Christmas holiday of Scrooge. Yeah. What are the main characteristics of a tightwad? Yes. That's a great question because there are many different ways to be cheap and they're all kind of cousins. A tightwad is a unique mindset. It's, tightwires are people who spend less than they think they should. They are often frustrated with their inability to spend. There are lots of things they

Starting point is 00:06:39 recognize they probably should buy, but because spending causes a lot of anxiety or distress, they end up not buying it. And they suffer as a result, and the people around them suffer as a result. Now they look good on paper. If you look at their savings and debt, it looks pretty good, but they're not as happy as they could be, because they have all these frustrating moments and regrets. Frankly, spend-frifs have the opposite problem. It's like someone cut the brakes on the car. They don't experience enough distress when contemplating spending and they end up spending more than they think they should and they also have some regrets. So even though tight ones that spend-frifs look very different on paper, financially,

Starting point is 00:07:26 they're both frustrated in some sense. And these are kind of unique terms, but it's different from, for example, tightwants are not frugal people, frugal people, they love to save, they believe in it, they enjoy reusing items and extending the life of a product, and they're happy. And that's a very different flavor than Taiwanism. And throughout the book, for a person who hasn't read this, you go through many different descriptions of other behavior scientists whose work you've've studied and two of those were Ronald Faber and Thomas O'Binn. And I thought it was interesting because they described someone who is a compulsive

Starting point is 00:08:11 buyer. And when I think of a spendthrift, that's the first thing that came to my mind. But you write that they're actually different. Can you explain how? Yeah, they're not completely unrelated. But a compulsive buyer that's a somewhat different psychology. It's often driven by depression and it can sometimes be addressed with medication. An anti-depressants can help with compulsive buying. That's not something I think that would help spin thrifts. It's not negative affect driven shopping.

Starting point is 00:08:42 Spin thrifts enjoy a lot of items and they're not necessarily shopping, coming from that place. Now, certainly if a Spinthrift spends too much, they can get themselves in the trouble and you can bring on kind of mental health struggles. But truly, the compulsive shopping, the compulsive buying, I think starts with some kind of mental distress and addressing that. And so I don't think that's where spin thriftism starts. Well, one of the things I talk a lot about on the show is how for so many people, they tie their success to material possessions. But you indicate in the book that for spin thrift's possession-defined success is not a primary motivator, why is that the case?

Starting point is 00:09:26 Yes. So materialists, there's different aspects of materialism. And so one aspect is just enjoying goods. And spend-thrups are really high on that. They get excited about lots of things, lots of goods. Even though they know they're going to get over it soon, they just don't care about what happens later so much. They just want the initial burst of excitement. A true materialist, though, is using money or goods to kind of show status and to let people know where they are in the kind of social hierarchy. A Spentharif, that's very incidental.

Starting point is 00:10:04 That's very secondary to them. That's not what makes them tick. It's more about if something clears a very low threshold for a spin-thrift and it just somewhat triggers their interests, they're like, sure, I'll, I might as well buy that. But it's not the primary motivation is not showing off and letting people know where they stand. Well, I think this is a good point since we've gone through the difference between the tightwad and the Spent Thrift, you and some colleagues developed

Starting point is 00:10:32 the tightwad Spent Thrift scale. Can you go through for the audience what it is and what you have observed, it's predicted about people's behavior? Sure, yeah, it's a little four item measure of asking people to reflect on average or historically how you tend to approach different shopping situations. For example, it describes kind of two people who stumble upon a big sale, one person says, oh, I can finally

Starting point is 00:11:00 get some stuff I need, but they just can't bring themselves to spend the money. Whereas the other, that's the tight one, whereas the other one is like, they know they don't need anything, but they just can't resist and they buy a bunch of items that suspend thrift. And it asks on a continuum, where do you fall? Do you resemble one more than the other? So just asking people to reflect on their tendencies. And yes, this predicts a variety of kind of financial measures, savings debt. It's not related to income. It's not related to current income. So it's not the case that tightwisers type because they just can't afford to spend. They might feel like they can't afford to spend. They might not have been able to afford to spend earlier in life,

Starting point is 00:11:46 and they could build up a protective shell that they've carried with them, that is hard to shed when their circumstances improve. But in terms of current income, that's not what's driving these differences. It also relates to overall well-being and happiness, whereas the people in the middle of the scale, the people we call un-conflicted consumers, who have a modest amount of distress when thinking about spending money, not too little, not too much. They tend to be happiest, whereas the type wasn't spent thirst to be a little less happy.

Starting point is 00:12:20 So it's a good predictor of your financial and psychological well-being. I took the test and I scored a 13, which put me right in the middle. Good. And congratulations. That's good. I'm in that group that is neither a spend-thrift or a tight-wad. But it's interesting because I think earlier in my life I would have probably leaned more towards the tight wad especially when I was growing up and was kind of trying to hold on to every dollar that I had, but I think over time I've loosened up quite a bit from that. But

Starting point is 00:12:57 it's interesting once I read the book and I started to think about some friends and family members, I started a picture where they might sit on this scale. And it got me to thinking when you teach college students and they come in and they take this for the first time, what are some of the reactions that you get from them? Yeah, so sometimes the reactions are about the names. Some people don't like being called a tightwad and I say it's with love and it's not meant to be a bad thing. But no, it's interesting. People enjoy seeing where they stand relative to others. And as you say, thinking about kind of friends and family where they might fall, and they often want to know why. Why do I approach things this way?

Starting point is 00:13:52 How can there be such vast differences between people who seemingly have pretty similar up rings? We can think about money very differently. It's usually the start of a conversation. It's usually, it brings about like 20 different questions. Yeah, it's just an appetizer to the meal of financial thinking. And it's something that I liked when I looked at your appendix and the list of questions that you had in the back and I don't want to be a huge spoiler alert for the audience, but it has some great questions that you and your partner can go through that will allow you to analyze where you all sit on this and your relationship to money.

Starting point is 00:14:33 So I thought that was very interesting and it's something I'd like to use myself. Yeah. No, I say that if you're in a relationship and you might have been together for many years and you might feel like I know this person very well. If you look at those questions, I guarantee there's some, you could use a refresher on where they right now. What is their psychological road map looking like at the moment? It's important you have to have some curiosity about your partner's kind of mental life. Absolutely. On the podcast, given we're in the health area, we've had a lot of discussions about

Starting point is 00:15:11 the use of FMRI and how much it has changed the game. But I don't think we've done one about how it shows neural activity that's tied to how we think about money. And you have a task that you've developed called the Save Holdings or Purchase, you call think about money. And you have a task that you've developed called the Save Holdings or purchase, you call it Shop Task. And I was hoping you might describe what that is and how you actually used FMRI to do this neural activity research. Yeah, that was an exciting study. So we brought people in their 20s into the lab, into the FMRI facility. And we gave them real money to spend. And we put them in the FMI facility. And we gave them real money to spend, and we put them in the FMI, and we showed them

Starting point is 00:15:51 a little screen. And what it would do is it would show a product for four seconds. It would show its price for four seconds. And then they would have four seconds to click on a remote control. Yes, I want to buy at that price, or no, I don't want to buy at that price. And then they would get two seconds to rest. And then it would start over with a different product. We would do this for 40 to 80 different products, depending on the task.

Starting point is 00:16:16 So they're making real decisions. We draw a couple to count for real at the end. And so this task kind of lets us isolate neural reactions to, oh, how do you react to the product? How do you react to the price? And then how do you put it all together to make a decision? And so what we found was, I think the most interesting finding was that the more distress people seem to be experiencing when thinking about spending. The more activation we saw in the insula, which tends to be active when we are experiencing distressing experiences. Someone's mean to us, or they make us smell something gross, or they exclude us, or insula tends to be active.

Starting point is 00:17:00 So the more activity we saw in the insula, the less likely people were to buy the item. It was as if we were seeing this distress signal saying, stop, don't do it. And it was evidence in our mind that there is what is called a pain of pain that kind of serves as the breaks, like the more distress we have, the less likely we are to spend. And we think tightwads are particularly saddled with this pain of paying this distress. And so the FMRI was useful because we weren't sure that people could articulate this feeling in words in real time. And so we said, well, let's ask the brain rather than the person. Let's get a different window into these kind of subtle experiences. And yeah, the evidence from F and MRI and from other measures, interviews, surveys,

Starting point is 00:17:52 it all kind of points to distress serving as the breaks on spending. And just some people have a better break system than others. And so led to the conclusion that pain of pain should be considered a form of psychological distress rather than physical pain. Yes, yeah, pain is an ambiguous term. And other researchers said, well, what do you mean by pain? So they looked at people paying for goods with either money

Starting point is 00:18:21 or like enduring electric shocks. And enduring electric shocks is a very different kind of neural situation. It looks very different than contemplating spending money. So that helped to clarify, yeah, this psychological distress, not bodily pain, not like being poked. Okay. And I'm not sure the audience has really heard of the insula too much before. So can you describe where it sits and what it controls? Yeah. So it's this prune-sized portion of the cortex folded and tucked between the frontal and temporal lobes. It is, you know, it's been described as this area where kind of feeling and thinking comes together.

Starting point is 00:19:05 It has seen as an input to a lot of decisions involving feelings. And in particular, its activity seems to often, not always, but often suggest there's some anxiety or distress being experienced. And so you see, for example, in other FMRI studies, if someone's been making risky gambles and then you see insulin activation, that's a good predictor of them switching to safe gambles or like safe options. So there's some kind of worry that it's reflecting. And so people are concerned about what an activation can mean many different things,

Starting point is 00:19:51 but in this region, at least in this task, that activation was suggestive of real distress. Okay, very interesting. And thank you for sharing all that. One of the things that you explain in the book is how our psychology influences our money handling habits and conversely how the way we manage our finances impacts our psychological well-being. Can you describe that in a little bit more detail? Sure. Yeah, so that was a response to the kind of common wisdom that, oh, when couples

Starting point is 00:20:23 are fighting over money, it's really about some other underlying issue and the money is just the superficial excuse or it's a misleading, it's not the actual cause of the dispute and I think that can be true. However, sometimes it is about the money and the money can create its own psychological dynamics that would not have come up in the couple otherwise. And so it can be as simple as our account structure that we have, how do we organize the flow of money within the house? Do we have joint or separate accounts? Do we have a combination? We might not think about that very carefully

Starting point is 00:21:07 when we first get together. It might just be an accident of whoever sets it up and whatever they have time to think about and sign up for, but that arrangement can create all kinds of feelings and monitoring, how much information I get about what you do with money and vice versa.

Starting point is 00:21:29 And so sometimes it is about the money can create good or bad psychological dynamics. And so what the book tries to say is given that, it's worth being a little intentional about how you set up this, these household systems about how we share money and what we know about each other's spending because it's its own creator of new dynamics. As you were just alluding to, our relationship with money is complicated no matter how much of it we have.

Starting point is 00:22:01 Why does this complexity tend to intensify when we're in a romantic relationship? In terms of adult relationships, we spend the most time with spouses. If we're in a relationship and we're spending time with another adult, that other adults probably are spouse. There is just so much opportunity to observe what the other person is doing. And if they do 19 things that you think are fine, you'll just forget about them.

Starting point is 00:22:29 But on that 20th thing, if they make a weird purchase or they seem to be wasting money, that's going to stick in your mind and really stand out. So those mistakes are missteps. They gloom large. It's this idea of loss aversion that losses or mistakes loom larger than comparable good things. So there's just so many chances to do something that your partner thinks is

Starting point is 00:22:51 weird or wrong. So there's all this observability. And then there's how income is shared. What if we have different amounts of income? What if I work and you don't and isn't my money or your money or our money? And do I feel like I'm asking for an allowance or how much do we both chip in for the rents or the gifts? And then when kids are involved, like, I might be able to put up with your silliness when it's just you and me, but when you're rubbing off on the next generation, I might be like, okay, could you not, pass that on to our kids. So, yeah, whenever you add people into the home, it's just this pressure cooker and there's so many chances to have missteps and misunderstandings. And that's why I think it helps to take the scale for both people. Oh, it helps to see where you're coming from.

Starting point is 00:23:46 You didn't buy me this bad gift because you don't like me or care about me. You just are really tight with money. And you spend very conservatively and we can work with that. Once we know where we're coming from, there are things we can do. You started off the conversation by self describing yourself as a spend-thrift and your wife is a tight wad. And so you have naturally opposing financial behaviors. How have you learned to have a harmonious and balanced relationship and what would your advice be to other people who face the same dynamic? Yeah. Well, we have a balance of joint and separate accounts.

Starting point is 00:24:27 So all incoming money comes to joint. It's all our money. And then we each get some of our money to spend without close monitoring. So some of that goes into separate accounts later. So she sees that I take X and I see that she takes Y. I don't need to know the details. They're available upon request. Hopefully the request are few and far between. We have different hobbies and interests. We not totally. We have some common things, but she's a

Starting point is 00:24:57 needle pointer. I don't know anything about that. I would be shocked if I saw the prices of some of those items. I was thinking we just get a pillow at home goods that kind of looks like that. No, it's not the point. And it would totally squash her enjoyment of that activity. If I was like doing a line item, oh my gosh, thread, really? I can get that wholesale somewhere else. But it's this combination of sale somewhere else, but it's this combination of shared money, but there is some privacy around how we each get to spend some of it. And I think we get a general sense, I call it financial translucency instead of financial transparency. We both need a general sense of what the other person is doing, but the details I, just cause more harm than good. I've also learned how to be a better gift giver.

Starting point is 00:25:51 As a spin-through, I tend to throw money at, I don't wanna say a problem, throw money at situations where money can solve it, in my mind. I've gotten her gifts that are like very lavish and over the top and are just not her. When I would have been better off spending a little less to get her something that like a slightly nicer version of what she would have gotten herself like that would have been really nice. But when I went over the top and got these lavish things, I was basically saying, oh, I don't understand you. I was just getting it for, oh, if I were purses, that would be the purse I would want. It's not the purse you would want. So, it's

Starting point is 00:26:30 really about understanding your partner and thinking about good gifts require sacrifice. So, as a spin-thrift, if I need to show sacrifice, spending a bunch of money, that's no sacrifice. I do that very easily. She sees me do it for myself all the time So if I get her like a new iPad like who cares? She knows that's not a big deal for me So if I want to demonstrate sacrifice I got to make something arrange something make some plans Track down a rare item a first edition of a book just for this Christmas she's starting like a needle points business and so without her knowing I took her logo and made some like stickers that she can put on like things she mails out and that took time and it

Starting point is 00:27:14 wasn't the most expensive thing but I hope it was thoughtful and she thought it was quite good. Yeah and for her though if she wants to sacrifice it's a different story and of course being thoughtful is great but for her though, if she wants to sacrifice, it's a different story. Of course being thoughtful is great. But for her, if she spends a bunch of money, I know that wasn't easy for her. That's like a real sacrifice that hurt. So that is very flattering when she, if she were to give me a new iPad, well, that's something.

Starting point is 00:27:40 So yeah, it's all about giving gifts with the understanding of what the other person knows about you and what they see as a sacrifice. And so that took me a little while to get my head straight. So I think it's a pretty happy relationship because in large part, we've navigated carefully these vast differences between us. So for someone who's listening and maybe they're not doing in a balanced way that you guys

Starting point is 00:28:07 do, what are the most significant ways in which money matters can negatively impact romantic relationships? Sure. I think there's a lot of concern out there about financial infidelity. I see a lot of stories about this and couples can be on edge about I don't know everything that you're doing. I think that tends to be overblown. A lot of what gets categorized as financial infidelity or is like harmless things. So most of the problems that couples get into are decisions made right out in the open.

Starting point is 00:28:42 A remodel that you can't afford, or like the new Tesla you bought, or just very obvious things. So I wouldn't worry so much about the hidden spin. It can happen, and it can be devastating, but usually that's not what's going to hurt the couple. You want to find ways to be collaborative on the big stuff and be basically in a state of ignorance is bliss on the little stuff. Yes, you do need to have high-level discussions about shared goals and plans and what vacations do we want to take and if we have a little wiggle room, how do we want to invest this extra money? Those are all good and necessary.

Starting point is 00:29:26 But you do need some autonomy also. You need some individuality. And so that's where I think the separate accounts can be useful. But I would look at how the money is flowing within the households, go to the bank, rearrange the accounts if you need to. It's important. If assuming you're all in and things are going, the book is really aimed at couples where things are going good, but they could be better.

Starting point is 00:29:52 If things are rocky, like very rocky, I wouldn't necessarily say, oh, go for a joint account because you have to protect yourself. The things are generally good. Yes, rearrange how the money flows within the house. I think that's, and we have experimental evidence like this really matters for couples and it helps the earlier you do it. But even if you've been together for a long time, learning about the other partner, learning about the gifts, I know it sounds like, oh, gifts, how important could that be? Really, it is really important. So if you can just learn about your partner and learn to be a better gift giver, that alone will help the relationship. There are other fundamental problems that maybe

Starting point is 00:30:37 there are different books for about like lack of income and things like that. And I don't have a lot of tips on what to invest in or how to get rich. And there are good people for that out there. But mine is more about taking what you have and doing things in a happier way. Well, thank you for sharing that. And I wanted to go back to tightwads and spend thrifts again for a second. You bring up four basic principles in the book of how tightwads can learn to loosen up. Can you go through those and how to setting up a relevant mental account far in advance of purchases help a tightwad? Yeah, no, I like that one a lot.

Starting point is 00:31:14 So the idea there is that tightwads need to pre-commit to having some fun, to indulgence. If they are just put on the spot and asked to consider, do I have the money to afford this? They will find many ways to say no in the moment. We spent first, we're very gifted at finding the money in the moment, but tightwads, they need to warm up to the idea of spending the money. They need to make a plan, a budget, I like spending plan better than budget. So it's just ear marking the spending money in advance, well in advance, and getting used to the idea

Starting point is 00:31:57 that there is some money that I will be spending on fun things. And so when I encounter that in the world, weeks or months later, it's there. I don't have to look for it. And yes, it left to our own devices in the moment the tightwad will struggle to find the money. But this is a place we usually think of budgeting as ways to restrict spending, but you can

Starting point is 00:32:24 actually use budgeting to loosen spending. So I think that can help tightwads if they plan in advance. I am going to spend some money later. That's often what they need. So I strongly recommend that for them. And then I wanted to turn it to spend thrift. Because I think one of the things that happens with them is they don't learn from their past spending mistakes. And I was hoping you might discuss the story of Sammy Davis Jr. who you discussed in the

Starting point is 00:32:52 book as a way to illustrate this. I love Sammy. Yeah, Sammy is my Spend Thrift muse. I think he took it a little too far, but he really did wrestle with this question of when do we get to eat drink and be married. Do we save it all for the very end or can we spread out the joy throughout life and use money to enjoy life? He made a lot of mistakes, a lot of overspending mistakes like I like the story of where his tax advisor is like

Starting point is 00:33:21 please stop spending. This is really desperately bad. I need to know that you understand this. And he says, yes, I do. Thank you. I really appreciate it. And then he goes get some gold lighter engraved with his name. Thank you for the advice about not spending.

Starting point is 00:33:34 So no, Sammy. But Sammy Davis, he made a lot of mistakes. And he had a hard time learning from those mistakes. Part of the issue was that the mistakes were very pleasurable in the moment. And so that makes it hard to learn. But part of it was he was used to making mistakes. And when we're used to making mistakes, it's hard to learn from them. A mistake is educational when it surprises us, when it's unexpected. But an expected mistake, for example,

Starting point is 00:34:07 if I go into a situation and I expect a stumble and do poorly, and then I do, there's not really a big learning opportunity there. Everything went as planned. But when you make an unexpected error, that's when you learn. But spend-terrifts and tightwads, frankly, expect to make a lot of mistakes. And so it's hard to learn from those mistakes when they're just kind of part

Starting point is 00:34:31 of everyday operations. Okay, and I know one thing that causes a lot of stress for people is the psychological effects of debt. How does debt overall impact our psychological well-being and what steps can individuals take to mitigate this stress? Yeah, debt is it can really eat away at well-being both kind of your overall psyche and just your cognitive functioning. There's evidence from like test taking with kids when they're growing up in a household with a lot of debt and a lot of struggle like they do worse on growing up in a household with a lot of debt and a lot of struggle. Like they do worse on math questions that involve money because it just comps all these bad thoughts about these struggles at home.

Starting point is 00:35:10 There's different approaches to paying down debt that have been proposed. Some people like me and my co-authors and older paparazzi, we say, pay attention to interest rates, go after the one with the highest interest rate, try to chip that down. Other people say, well, just aim at the smallest balance, pay that off, and build some psychological momentum. We like crossing things off the list. And so if you can do that one account at a time, that can be helpful, the debt snowball method.

Starting point is 00:35:42 I have critiqued that in the past, but I do think there are some people where if they're really in a bind, if they're really struggling, I do think the snowball could be perfectly reasonable just to feel like you're making progress. And that is essential to keeping at it. But if you're in a somewhat comfortable position, I would say look at the numbers, go pay off the thing with the highest interest rate,

Starting point is 00:36:14 devote your most of your efforts there, take a very mathematical approach. But if you're really feeling underwater and looking for kind of hope, really feeling underwater and looking for kind of hope. I do think crossing debts off the list is a is a reasonable approach. So it's again this is for people who can't pay off everything, but they can make a little more than the minimum payments. They have some choice about where to allocate that little extra effort. Okay. And last year one of my favorite episodes I did was with Bob Waldinger, who currently leads the Harvard study of adult aging. And so it was interesting for me to talk about happiness and what causes happiness. But there's definitely a correlation for people

Starting point is 00:36:59 between money and happiness. How do your research find that relationship with money impacts or overall happiness and life satisfaction? Yeah, no, it helps. Money helps, for sure. Certainly once you reach a certain threshold and people have argued about that threshold, or maybe it's linear up to a threshold and then flattens out a bit after that.

Starting point is 00:37:23 But I think the message of my work is that you can have a lot of money and be unhappy with how you use it. A lot of tightwads fall into that category. So they look good on paper, but they kick themselves for going to the bad restaurant for their anniversary or not taking the vacation or taking a worst vacation they should have and not accumulating the life experiences and memories that they could have and would have led to a richer happier life. are people who don't have a lot of money, but are spending it in ways that maximize happiness, like they're doing a lot with a little. And so that's very possible too. So it's not just about the amount that you have. It's also about, are you using it in ways that maximize happiness? Okay. And I know when it comes to that, there are also hidden influences. I saw Jonah Berger gave you a acknowledgement for your book,

Starting point is 00:38:29 so I'll dive a little bit into invisible influences. What are some of the less obvious factors that influence our financial decisions, some of these things that may be invisible to us, and how can we become more aware of them? Sure, I think the book would help with that, kind of tuning in to some of these items. So retailers, businesses, they are skilled at

Starting point is 00:38:52 making spending as painless as possible. And Amazon, they're the artist in this space. I'm talking one click ordering. I'm talking Amazon ghost stores where you just walk in, collect your items and walk out. There's no checkout process. They just scan you and they know what you bought. They charge you later. And so you want to take tension, attention away from the money leaving your possession. And retailers are there's so many different ways to do this. There's a

Starting point is 00:39:22 Department Store chain in the Midwest, Vaugh Von Mar, the Nordstrom of the Midwest. And their salespeople are so skilled at making small talk at the register. I go up, now when I go in, I have to think before I get to the register, okay, what am I doing this weekend? Cause I know they're gonna ask. It's gonna be a conversation.

Starting point is 00:39:41 And so I go up there and I have my items and they engage me in discussion. And before I know it, I'm just holding it back. I don't remember paying for it or what happened. It's just all a blur. It's like a magician. Look over here. And so that is meant to reduce the pain of pain. And so if you are someone who needs to reel in your spending,

Starting point is 00:40:05 it's incumbent upon you to make spending more visible and more obvious in your own mind. And for example, what I had to do when I was in grad school and money was very tight, I turned myself into a temporary tightwad. I would train myself to only spend in cash whenever possible. Go to the ATM, I would experience pain at the ATM because I'd get my receipt and enter that into an Excel file and notice the deduction in my account. So pain there and then I had pain when I would spend the cash. So double pain, all these speed bumps I would put up. I used to be like, if I couldn't

Starting point is 00:40:43 pay with cash or I'd do debit and I'd get the receipt and take it home and enter it into my Excel file. Because I knew I could do it better than the bank. I have a faster view of my account. And so it was just about making it very salient, the money I was spending. And that's not a recipe for the most fun life. It was a recipe for survival, and it did help me survive.

Starting point is 00:41:09 And that's not a way I would recommend for anyone who's comfortable right now. But it is just illustrative of the fact that this attention to money is a dial that marketers are turning. They're turning it down all the way down. And we can turn it up a little. Some of us can turn it up a lot, but we can do things that make it more

Starting point is 00:41:30 obvious kind of what we're spending. Okay, and I want to end on the conclusion of your book, which is to me a very fun topic. And it's answering the age old question, should we marry for love or for money? And you write in the book, and I like these statistics, that if you Google the phrase, never marry for love, it returns about four times as many search results as never marry for money. And then a 2018 Merrill Edge survey reported

Starting point is 00:41:56 that the majority 56% of Americans say they prefer a partner that provides financial security more than head over heels love. So it appears that the answer would be more people marry for money than they do for love, but what would your answer be? I was shocked to see all that. I was wondering, many of the people who married for love are off having fun. And the people married for money are writing these advice columns. I don't know, but there's certainly wisdom behind both of these phrases, Mary for love, Mary for money. I get it. But I think there's big mistakes

Starting point is 00:42:32 with those approaches. Oh, I'm going to marry for money. What does that mean? Is it that easy? If you don't have money, is it so easy to marry someone who has a bunch of money? Are they welcoming you into their society and saying, Oh oh yeah, come hang out with us. No, it's hard. We tend to run around with people with similar socioeconomic characteristics. There's not a lot of kind of mixing between different social classes,

Starting point is 00:42:54 at least not as much there used to be. And even if you do find someone who's rich, are they super eager to share it with you? Are they gonna see it as, oh yeah, this is totally our money. Yeah, let's share all this, maybe. But maybe not. So practically, I think marrying for money is like hard to do. Even if it did work out, it's no recipe for a happy relationship. Because like we said, you can have all the money and still feel not so great. You can't just marry for love either. Love is totally necessary. There's different types of love. There's like the passionate love at first and then there's like the more companion at love just

Starting point is 00:43:28 like it's nice to have someone around to talk to and watch the Super Bowl with. That's fun. Those are both totally necessary. But you could have both, even if you have both love and money, that's not enough. It's a both-and situation. You need a reason about love and money. And you need a reasonable amount of psychological similarity. We need to have somewhat similar values, interests, goals, plans for this thing to work. There's a story I tell in there about someone who they were in love. Everything looked good. Love money, it was all fine. But he wanted to live on a farm and raise like a bunch of kids. And she wanted to live in the city and maybe have one kid, maybe zero. And these were very strongly

Starting point is 00:44:15 held interest of theirs. And there was no, if they would have stayed together, it would have been a miserable experience. So they both went their separate ways and he lived on the farm and he had a bunch of kids and he's happy and she's in the city, one kid, she's happy. So you need that similarity. It doesn't have to be identical. You don't want to clone. That's no fun, but you have to have somewhat similar interest and values also on top of the love, on top of the money. So when I'm laying out in that chapter, it's like it's a really high bar in terms of who you want to marry. You have to have all these things go right, which is it's hard to find that

Starting point is 00:44:51 person, but I think it is essential. Okay, and then Scott, if a listener wanted to learn more about you and the work that you do, where is the best place for them to go? Sure. Well, I think in my website, scotrick.com would be a good place. Scott linked to the book and linked to all the papers that the book is based on. And yeah. Or they can attend the University of Michigan

Starting point is 00:45:14 Ross School of Business and meet you there as well. Go blue, my door's open, yeah. Okay, well, thank you so much for being on the show today. It was such a pleasure to have you and congratulations on your book. I was a big thrill. Thank you so much for being on the show today. It was such a pleasure to have you and congratulations on your book. I was a big thrill, thank you so much. I thoroughly enjoyed that interview with Dr. Scott Rick and wanted to thank Scott and St. Martin's Press

Starting point is 00:45:32 for having him appear on today's show. Links to all things Scott will be in the show notes at passionstark.com. Please use our website links if you purchase any of the books from the guests that we featured here on the show. All proceeds go to supporting the show. Videos are on YouTube, but both John and Rommiles are our main channel on PassionStark Cl show. All proceeds go to supporting the show. Videos are on YouTube, if both John or Miles are main channel

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Starting point is 00:46:30 Access Hollywood and most recently hosted Miss Universe 3. We discuss not only Maria's career highs, but also the lows in her life. How she helped her mom battle through a brain tumor, her own experience with brain tumor, And lastly, her fight to overcome pain-credit cancer. We have to take a lot more ownership over the healthcare situation in our lives because the doctors are overwhelmed. You know your body better than anybody at the end of the day. You have to keep fighting for answers. You have to keep pushing. If something isn't feeling right, you've got to keep going and getting a new doctor if your doctor is maybe gaslighting you. And that's happened to me too. You just have to keep pushing. If the pain persists, so should you, you got to keep looking. Remember that we rise by lifting others. So share this show with those

Starting point is 00:47:14 that you love and care about. And if you found today's episode on tight wads and spend thrifts, entertaining or educational, then definitely share this episode with those who could use its support. In the meantime, do your best to apply what you hear on the show so that you can live what you listen. In the meantime, do your best to apply what you hear on the show so that you can live what you listen. Until next time, go out there and become Passion Star. you

Passion Struck with John R. Miles - Dr. Scott Rick on Should You Marry for Love or Money? EP 398

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