Sarah is a financial therapist and the founder of my Bulletproof budget. She helps online business owners create simple budgets to help them create security in their lives and a variable income and grow their businesses simultaneously. One of the main tools she uses to help is called behavioral economics.
We’re going to cover it in the interview for those of you who don’t know what it is, but I can tell you it’s used behind the scenes in many aspects of your life, sometimes without you even knowing it. One example is banks that started using behavioral economics to shape how they offer products and services to customers.
But there are many more. So I hope you find this interview interesting, and we’re going to learn a lot more as we go along.
A Little Background about Sarah Blanchfield 0:50
What is a financial therapist 5:58
Money Myths and red flags 8:27
How does someone begin to break the “spend more than you make cycle”? 10:05
The financial and budgeting advice has to be tailored to each household 13:19
Behavioral economics and how it relates to finance 14:23
How to best use behavioral economics to help with your finances 20:38
Decision Paralysis 26:52
Couples and finance 28:17
mybulletproofbudget.com and how Sarah’s company can assist 30:57
“So your behaviors are an outflow of your beliefs about things. And so by changing your internal belief structure, you change your behaviors. So many people are focused on changing the habit, which is very external. But if you still believe that your money is all gonna go away real soon and or that you deserve a reward and that reward has to be monetary, or you’re trying to meet emotional needs by buying things at the store, which we all do.
So no judgment, then you don’t know how to accommodate that. There’s nothing wrong with giving yourself a treat for working hard, but you can build that into your budget. You can create structures that support you in the ways that you need if you know what needs those are fulfilling for you. But most people are not discussing this.
They’re not thinking about why they’re making those financial decisions. They’re just trying to follow the general advice of the gurus that saving is good and spending is bad and you need to pay off all of your debt, whether it really works for them or not.”
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