[Music] But when it comes to emergencies most People know it is a good idea to have a Little money set aside but they don't Always follow through that's right it Often leaves folks relying on what are Costly Alternatives right borrowing on a Credit card for example but studies show A little incentive goes a long way get This 71 of workers say they would likely Contribute to an emergency savings fund If their employer offered one about 87 Would do so if their employer made Matching contributions I like how that Sounds so what's preventing folks from Doing this anyway well the Nazi Is a behavioral Economist and the Founder and CEO of pension plus Um so so what do you say you know most People will reference that yes it makes Sense to save money it's just Challenging Depending on how you budget so what are The psychological barriers that prevent Folks from doing what's necessary here You know one of the difficulties is just That it's difficult to start saving for Emergencies you have to know where to Open an account what kind of an account And there's always other things in the Way another psychological difficulty It's so much easier to do the right Things in the future like you know we'll Sign up for the gym next month we're
Going to eat properly tomorrow tonight We're gonna have I wouldn't know Anything about that yeah She knows chuckle chuckle Keep going sorry And and it makes it difficult it's also Very difficult to save unless we get the Windfall if suddenly money comes at us Let's say we get the bonus we get the Payways with an Uber driver it's uh Raining and snowing in New York and We're making more money tonight driving People it's easier to save when we have More money and right now we haven't made It easy for people to save whether they Have an employer let's say UPS driver or Whether they're actually working in the Gig economy like the Uber driver Yeah is really fascinating to Look at your work and your research into Human behavior and how it shapes these Financial decisions it can be Overwhelming at first I think for people To think about setting aside a chunk of Money so what is the best way for people To actually get started on that So you see you mentioned the chunk of Money like maybe 150 bucks a month and That tends to be actually very difficult For people but we did a start with Acorns the micro saving app and we found That if we call it five bucks a day Rather than actually 150 bucks a month That way of thinking about it makes
People four times four times more likely To save wow another thing we Experimented with is people are not good With percentages so if we tell people to Save maybe a couple of pennies for every Dollar they make they find it easier to Save than talking about percentages and Decimal points and things of that flavor Fascinating again to hear all of these Things that maybe we can kind of get Past those psychological barriers and Five bucks a day that sounds doable Sounds doable sounds doable Bernardsi thank you so much for sharing Your perspective with us uh really good Information we appreciate it thank you
