Feed the Pig Before You go Broke!
Wednesday, May 18th, 2011
We are clearly a nation of spenders not savers in the US. You can see that at both the national level (current federal debt = $14.7 Trillion) and the individual level (total personal debt = $16.7 Trillion). Our total debt (federal, state, local, household) is some 55.7 Trillion dollars! At the individual level this is primarily a behavior change challenge. I need to spend less and save more. It is very similar to losing weight. I need to eat less and be more active.
Consciously changing behaviors takes a lot of effort. We must learn what works from experience. This means trying a lot of small experiments with ideas that have proven practical for others. We must fail many times before unlocking the simple tactics that work for our specific circumstances. Learning to change behaviors from experience is a major cognitive design challenge. One way to meet that challenge is to be sure to provide a fresh supply of small steps that aspiring changers can try. Each step should be an easy but potent way of experimenting with the desired new habits.
A good example is the attempt by the American Institute of Certified Public Accounts to help us develop the saving habit. They created a website called Feed the Pig that includes a section on savings tips. These tips cover everything from buying makeup to dining out and using premium cable. Note how they are structured:
Each tip offers three experiments you can try. This is a good way to stimulate the personal learning from experience that is so essential for effective behavior change.
