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Simplify Finance: Dan Ariely On What We Get Wrong About Money

In this episode of Simplify, Caitlin talks to behavioral economist and bestselling author Dan Ariely about how to get better at saving and spending money.
by Natallia Darozhkina | Aug 30 2018

We all buy things we don’t need. Sales, discounts, and special offers make us feel like we’re bagging bargains, when in actual fact, we’re just accumulating stuff. And modern conveniences make it ever easier to spend our shekels instead of saving them.

In this episode of Simplify, behavioral economist and cognitive psychologist Dan Ariely explains why we make irrational financial decisions and teaches us how to better manage those impulses. Based on extensive research and numerous global studies, Dan shows what exactly matters in personal economics and how we can get better at saving.

“One of the big lessons from behavioral economics is that the environment matters.”
Dan Ariely

Listen to this episode to find out what you should keep in mind next time you want to make that impulse purchase, and learn new methods to help you reach your next savings goal.

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Who’s Dan Ariely?

Dan Ariely

Dan Ariely is a professor of psychology and behavioral economics at Duke University and a founding member of the Center for Advanced Hindsight. He is the author of The New York Times bestsellers Predictably Irrational, The Upside of Irrationality, and Dollars and Sense. In his research, he explores the forces that influence human behavior and why rational people do irrational things.

Dan Ariely’s recommended reads

Michael Pollan’s book explores the murky past of psychedelic drugs like LSD and psilocybin and aims to uncover why these substances got such a bad name despite having almost no negative side effects. The author tests a variety of these drugs personally, shares his observations of their effects on others, and reveals how they can positively impact a broad range of people, from those with physical and mental illnesses, to those who simply want to be more creative and productive.

Comment from Dan: “So far it seems like a solid piece of research. And really interesting––and I know from interviews with him that he starts by, you know, being more against psychedelic drugs, and end up being more in favor of them. And I’m looking forward to kind of understanding his journey in a better way.”

Extra credit reading

If you would like to learn more about behavioral economics and how to shape financial habits, check out this book list composed by Ben and Caitlin!

I Will Teach You To Be Rich takes a straight-talking and amusingly cocky approach to smart banking, saving, spending and investing. You don’t need to be an expert to become rich, you just need to have a plan and know a few tricks. Sethi will teach you the benefits of saving as early as possible and setting up automatic investments so you can sit back and let your money work for you.

Daniel Kahneman’s Thinking, Fast and Slow – a recapitulation of the decades of research that led to him winning the Nobel Prize – explains his contributions to our current understanding of psychology and behavioral economics. Over the years, Kahneman and his colleagues, whose work the book discusses at length, have significantly contributed to a new understanding of the human mind. We now have a better understanding of how decisions are made, why certain judgment errors are so common, and how we can improve ourselves.

The Power of Habit explains how important a role habits play in our lives, from brushing our teeth to smoking to exercising, and how exactly those habits are formed. The research and anecdotes in The Power of Habit provide easy tips for changing habits both individually as well as in organizations. The book spent over 60 weeks on The New York Times bestseller list.

Drunk Tank Pink probes the hidden psychological and social influences that shape the way we see, think, feel, and act in the world.

What’s Simplify?

Simplify is a podcast for anybody who’s taken a close look at their habits, their happiness, their relationships, or their health and thought “There’s got to be a better way to do this.” We talk to bestselling writers, productivity wizards, sex geniuses, and happiness experts to find it for you.

Simplify is made with love by Blinkist. Click here to try Blinkist free for 14 days with the voucher code: broccoli

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Talk to us!

We want to hear from you! Reach us at [email protected].

If you want to say hi to Ben and Caitlin in the meantime, you can find them on Twitter: @bsto and @CaitlinSchiller.

Who made this?

Your hosts are Caitlin Schiller and Ben Schuman-Stoler.

Research and production assistance by Nat Darozhkina and Terence Mickey, sound and editing by Ben Jackson and Ody Constantinou.

Thanks to Nico Guiang for our awesome intro and outro music. Listen more on Soundcloud or check him out on Facebook.

Got links?

Dan Ariely’s website:

Read the transcript here!

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