Why your friends don’t save money, eat healthier, or clean their garages

Ramit Sethi

I just wrote a monster guest post at Get Rich Slowly. Here’s an excerpt:

“…This is a common phenomenon: As Laura Levine of the Jump$tart Coalition told me, and I paraphrase, ‘Bob doesn’t want to attend his 401(k) seminar because he’s afraid he’ll see his neighbor there…and that would be equivalent to admitting he didn’t know about money for all those years.’

They also don’t like to attend personal-finance events because they don’t like to feel bad about themselves.

Yes, we should max out our 401(k) employer match, but billions of dollars are left on the table each year because we don’t. Yes, we should eat healthier and exercise more, but we don’t.

Why not? Why wouldn’t we do something that’s objectively good for us?”

Read the full article: Why your friends don’t save money, eat healthier, or clean their garages

* * *
PS–I chose the title to be about “your friends” instead of “you” strategically. The first person who can name two psychological principles for why I might have done this gets a free copy of my book. Real, peer-reviewed psychological theories, not what you saw on Dr. Phil. [Note: Someone already won!]

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  1. Samantha

    They may have technical names, but two reasons to use “your friends” instead of “you” would be 1) “you” immediately puts people in defensive mode, so they will argue that you are wrong, that they don’t fit the description, instead of listening to the information, and 2) pointing out things “your friends” do as silly or in a negative context subconsciously encourages the listener to want to do the opposite, to be better than others.

    • Ramit Sethi

      Samantha! You’re actually exactly right. But I’m looking for the names of theories that would describe this. There are a few possibilities, for those who’ve studied psych…

  2. lucho

    Because I don’t want to admit to myself I have those problems, so I might not want to read if it was about “me”
    and you don’t want to make me feel bad about myself

  3. adora

    1) Avoid accusation.
    2) Indicate the problem as Social Norm.

  4. Shoji

    Mirror technique or third person technique.

  5. Ross

    One psychological principle would be the reverse halo effect if the article was written with “you” instead of “your friends” people take the one negative thing in their own lives and classify themselves as a “bad person”. Also an individual may think that other parties will classify them this way this third party finds out some trait or skill the individual is lacking.

    The other would be the psychological principle of projection. It is easier for most individual to project their problems onto another person (even sometimes imaginary) rather than going through the process of introspection. Projection separates the person from their problem, but does not disassociate them completely. On the other hand it takes a mentally stronger person to be able to discover their faults through introspection.

  6. Joe

    1) Compartmentalization

    2) Projection Bias

  7. Ken

    Theories are in *’s.

    Firstly, positioning the title like this prevents *cognitive dissonance* within the individual. By insinuating that the reader performs an action that defies their own personality or logic, this cognitive dissonance could cause negative emotional feelings in the reader. By directing the idea at someone else, the reader is able to take in the information and utilize it while avoiding having to actually “confront” their misplaced behaviour.

    The second theory this plays on would be *actor-observer effect*. If the reader were thinking this article referred to their own inability to invest/exercise/etc. properly, they would simply dismiss the argument to external factors (ie. “Oh, I just don’t have time right now because of work. Next week I’ll be back on the treadmill”). By viewing it as people other than themselves, they instead focus on the internal motivations behind the lack of action, and are less likely to dismiss the arguments.

  8. Sean

    Commented over on GRS already, but just wanted to say… great article! Best PF article I’ve read in a long time.

    • Ramit Sethi

      Thanks for the great comments. The winner over on my Twitter account is @modite w/social comparison theory and attribution theory.

  9. Josh

    I would like to state, since we are being picky, that the offer was “Anyone who can name two psychological principles for why I might have done this gets a free copy of my book.”, not just the first person.

    Social Comparison Theory and Attribution Theory 🙂

    • Ramit Sethi

      Corrected that in the blog post above : )

  10. finance deals

    Do you think there is a correlation on how clean a person’s house is by how clean they keep their garage? No way…. hubby cleans the garage….. I clean the house. Not that men aren’t good housekeepers in general, but mine isn’t the best at it. But I’m not embarrassed to leave the garage door open.

  11. Alex R

    Sounds a bit like the Fundamental Attribution Error. Or in the words of the late George Carlin “Why is it that their stuff is shit and your shit is stuff?”

  12. Anshu

    I so hear you in this post. As I was going through each of the examples you’d given, I was recalling incidents that happened to me because of those barriers. I pay close attention to not wasting any food, but there have been countless times when I let fruits or veggies rot in my fridge, just because they needed to be washed before I could eat/cook them. Now I try to wash the fruits as soon as I bring them home. Once they’re sitting on the counter, ready to be eaten, even my usually fruit-averse husband gets tempted to eat some. Yeah, we all should watch out for the barriers in our life, and try to get rid of them.

  13. Dean J

    “They also don’t like to attend personal-finance events because they don’t like to feel bad about themselves.”

    That’s *amazingly* arrogant.

    I’d guess two reasons that don’t seem to get airplay.
    1. They care less than you do about the event, which isn’t unreasonable.
    2. They don’t trust the advice of folks who do seminars, which isn’t unreasonable.

    Wow, did your post come across as being a dick.

    • Ramit Sethi

      Dean, I agree that your reasons are also potential reasons why people don’t show up. But that doesn’t negate what I said, especially since I’ve spoken to many audiences on personal finance, and I know many other PF speakers who agree with exactly what I said. And while I’m perfectly happy to debate this, it’s really not polite to call anyone “a dick.” This is your warning — another ad hominem attack and you’re outta here.

  14. Julie

    I found this article very helpful! I’ve been meaning to carve a new design out of wax but my barrier is that the wax is so hard it’s a pain to cut. You just gave my the motivation to do it. I’m sorry that people have to feel so threatened by a new set of ideas. I am glad you put yourself out there.

  15. Fred

    “why your friends don’t…” is indeed a great title. Why is indeed a good question. Even though the contest is over, here’s my take: 1. avoids defensive reaction, 2. social comparison theory, in that it suggests you can outperform your friends/peers, which is a human desire, 3. attribution theory (in that the title typecasts your friends as incurable overspenders, etc., while the truth is more nuanced – do I get that right?)

  16. Danielle

    This article sparked a good discussion with my husband, so thanks!

    I will start to think about the goals I want to reach in terms of what barriers are in my way!

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