TD Ameritrade

Episode 06: Tired? Stressed? Check Your Wallet

 

Transcript:


Allison Schrager: [music] Mike, can I tell you about a stressful time in my life?

Mike Norton: Yes, please.

Allison Schrager: I went to college in Scotland. And I had finished and I was needing to move back to New York and my moving budget, because I'd run out of money, was $150 for a transatlantic move. And I remember just being like, "I don't know how I'm gonna get this to America." And then I found this guy who lived in Glasgow, and he said something in between all the garbled Scottish accent about $100, and he'd come pick it up. And six months later, they showed up and, in very rough shape, but you know, they made it. And I did manage to do a transatlantic move for 100 bucks.

Mike Norton: Are you gonna do your Scottish accent for us now? Or is that ... That just reminded me of, in my, I think similar time in my life, in my first job, I was a paralegal, and they very kindly opened up a 401(k) for me, automatically. And I used to track my 401(k) every single day. And one day I lost literally half of my net worth. And I felt like, ruined. Like it was like the Great Depression kind of story. In retrospect, I had about $200 in my 401(k). So I lost about $100. But again, at the time, it was a huge, huge deal because it really did feel like half of my life savings had gone. And the stress of that was actually really, really hard to deal with.

Allison Schrager: Well, I mean, half your life savings was gone, so I think that stress was justified. [laughter]

Mike Norton: Of course, we can worry and stress about so many things. And literally, there's unlimited number of things that we can worry and stress about, but it does feel like from our stories, and talking to other people that financial stress, worry about money, and stress about money seems to have this really unique, negative effect on us. And that's exactly what we're going to talk about in this episode.

[music]

Mike Norton: I'm Mike Norton, and I'm the host of Talking Green. I'm also a social psychologist at Harvard Business School, and I study the way people behave, and misbehave. On Talking Green we explore how psychological forces drive attitudes and decisions around money and investing. This episode, like every episode, I'm joined by Allison Schrager, an economist, journalist and culture maven. She's the author of the recent book, An Economist Walks Into a Brothel.

Allison Schrager: Hey Mike, today we're talking about the idea of financial wellness and how financial stress affects us all. Emotionally, of course, but also physically. Money stress may make us less healthy. But there are some ways to flip the script and we'll learn how we can use money to improve our health and well being.

Mike Norton: This is Talking Green.

Allison Schrager: An original podcast from TD Ameritrade and T Brand Studio at The New York Times.

Mike Norton: So we are going to chat today about the huge rise in wellness in general, and in particular in financial wellness. But before we get into that, I want to ask you if you know what, I apologize to people listening who actually know how to pronounce it, "hygge" is?

Allison Schrager: I do not.

[laughter]

Mike Norton: My understanding is it's this Danish concept of coziness.

Allison Schrager: Oh.

Mike Norton: So the idea is that your environment is structured in a way that makes you feel, and again, I realize these aren't the right words, but they're not a good translation, sort of like, snugly, [laughs] sort of the way to think of that. If you think of Danish design, it has this sense of kind of, comfort, and kind of, safety, in the design. I think it's interesting to think about that desire that we seem to have for that feeling of being sort of protected and comfy. I think this is the best word in English that we have for that. And how that plays out in our financial lives as well. So what are we looking for that, that comfiness in our financial lives and how does it affect our behavior?

Allison Schrager: Well, I guess the equivalent is a big bank balance. [laughter] Right? 'Cause nothing gives you comfort like knowing you have enough money to pay for stuff.

Mike Norton: What about like a snuggly bank mascot [laughter] that you could take home? No, not as good?

Allison Schrager: Um, but the, I mean that, that is a beautiful concept because financial wellness to me means security. Knowing that you can survive your car breaking down, you needing to fix your hot water heater, relieves a lot of stress. And there's a lot of comfort.

Mike Norton: Hmm. Let's take people who have enough in the bank where if things go wrong, their car breaks down, that they'd be able to cover it. Even though technically, an accountant might say you're okay, they still experience the world as though it's really, really stressful and they don't feel well at all about their finances.

Allison Schrager: Personal finance gets a really bad rap in my opinion. I think everyone thinks it's easy 'cause everyone does it.

Mike Norton: Um-hmm.

Allison Schrager: But, in a lot of ways it's a very complex financial problem. I think harder than almost everything else that goes on in finance.

Mike Norton: Hmm.

Allison Schrager: 'Cause it is very complicated to be this individual who has, gonna have all these shocks coming at you throughout your life, and to figure out how you can finance them.

Mike Norton: I feel like we have no problem connecting the dots between going to a doctor regularly for our physical health, or doing certain activities that are good for our mental health, but it seems like when it comes to money, so rarely do we think, "I should go talk to somebody about my financial health."

Allison Schrager: Yeah. Although to be fair to people, we don't really promote financial wellness. We don't really promote financial literacy. Like, the purpose of personal finance is smooth, consistent consumption across your lifestyle. And never having to experience a huge dramatic drop in your standard of living.

Mike Norton: Can you say a little bit more what you mean by, "smoothing our consumption"?

Allison Schrager: Yeah, so we generally assume in economics, like one of the worst things that could happen to you would be a meaningful decrease in your quality of life, or standard of living. And, we assume that that is, you know, causes you the most pain or discomfort. So the goal of personal finance in, at least in academia, although, and it should be in the real world, but somehow has gotten lost, is that you should have, you have predictable consumption every year of your life and it never falls.

Mike Norton: Um-hmm. And how do you think about, sort of the, we've been thinking, about sort of your own life, your own finances and what's coming down the road for you? How do you think about that in terms of kind of the macro economic context where, on the one hand, it seems now like the economy's going okay, and yet people seem to be reporting a lot of financial stress. So how do we kind of try to interpret the signals from the world and incorporate them into our own feeling of financial wellness?

Allison Schrager: Well, it's an interesting thing. People on paper might have more than ever, but they also are dealing with more risk. And risk is also a cost, right? And managing risk costs money. I mean we have much more what we call "systematic risk," which is this feeling of whenever we have these huge changes and the economy is going through a huge change, with more globalization and technology where there's a risk your job might not exist in 10 years. So even if you're doing okay now, you sense this big existential risk that people didn't have before. And, as well, we have to bear more sources of these risks ourselves, we're le-, less likely to have a defined benefit pension. So, more risk is on you and you're facing these bigger existential risks that are unpredictable. So I think that's why anyway, everyone kind of looks okay right now. They also at the same time have more anxiety.

Mike Norton: Thinking back to this idea of hygge, the, the Danish concept of comfiness, it, it seems like not only in finance but also in every domain of life, everything is followed by the word, "Wellness," now. And that we're support, we're supposed to be, "Well." Where do you think that, that's coming from? It, it's relatively recently that, "wellness," is this word that really matters a lot.

Allison Schrager: I mean, maybe as I said, as the economy is changing, and people are feeling more insecure, and at the same time feeling more of a need to consume more, maybe even what they can't afford, that this feeling of peace and wellness becomes more and more valuable.

Mike Norton: Hmm. [music starts] I wonder if people are buying snugglier clothes and comfier couches, and stuff like that to feel more secure in the world. [laughter]

Allison Schrager: Yeah, I think there's a reason why we feel like we need more hygge in our life right now. Americans are more stressed about life and about money. We're overwhelmed in many ways and it's taking a toll on us physically.

Mike Norton: It's such a powerful feeling of, of wanting to have less stress and be less overwhelmed and I think this financial stress in particular, really seems to be exerting a negative impact on people's well being. I talked with Brigid Schulte about how modern life is compounding these issues and what we can do about it. Brigid is a prize winning journalist, author of The New York Times bestselling, Overwhelmed: Work, Love, and Play When No One Has the Time. And she's currently director of the Better Life Lab in Washington, DC.

[music]

Mike Norton: Brigid, thanks so much for joining us.

Brigid Schulte: Hey, thank you so much for having me.

Mike Norton: So my number one thing when I talk to basically anyone in the world about how they're doing is they say, "I'm stressed." It seems like no matter, [laughter] and no matter what domain, too, it's like, "How's, how's work? How's home? How's life? How's your hobbies?" Everyone says, "I'm stressed. I'm stressed. I'm stressed." Can you tell us a bit about your view of stress and why it seems to be so pervasive?

Brigid Schulte: Yeah, I think it's really a common feeling, particularly in the United States. You know, the American Psychological Association puts out sort of annual stress reports and [laughs] we are an incredibly stressed-out nation. Uh, anxiety levels are very high. The World Health Organization rates us as one of the most anxious countries in the world.

Mike Norton: I love this idea that you have about stress versus overwhelm, because it's, it's not that stress is always bad, right? I mean, sometimes it can be good to be a little stressed, but this idea of overwhelm feels like the one that people are really struggling with.

Brigid Schulte: Yeah, I think that's a really important point is that a little stress is actually really good for us. That actually helps clarify your focus, and, and you do need that. But when you're in that constant state of, like, constant vigilance, constant stress, constantly in that fight or flight, there's been more and more medical research, physical research, to show how it's been tied to, not only poor health and chronic diseases, but you know, but things like inflammation, uh, diabetes, cardiovascular disease, high blood pressure, and even cancer.

Mike Norton: Um-hmm.

Brigid Schulte: But we're also, I spent some time at the Yale Stress Center where they're looking at what is that overwhelm and can-, constant stress doing to the brain? And they're actually finding that people who feel more stressed out, and have been through stressful events, their prefrontal cortex is actually smaller, physically smaller, 20% smaller in volume. And that's critical because that's the part of our brain where we learn and remember and make decisions. It's sort of like the, the human part of us. And so when we're in those kind of overwhelming situations, it's not only bad for our health, we can't even think well.

Mike Norton: Do you think about this role of financial stress, in particular, and, and all the struggles that people are having?

Brigid Schulte: Yeah, I think that financial stress is a huge part of, of all of this. It's tied with uncertainty and precarity, a sense of wellbeing. Time and money is something that we need to think about because both are so critical when you think about wellbeing and, and the good life.

Mike Norton: If we think about a hierarchy of stresses, let, let's say, and there are so many different kinds of, of stresses we can have, from our relationships, to work, to our time, to our money, are they different from each other?

Brigid Schulte: I think when you think about money or financial stress, I, I think one of the things that, that creates so much, you know, so much energy, or, or you know, so much power around it, is that it's, it feels really existential, right? It feels like it's, you know, almost, uh, it's a survival question.

Mike Norton: Hmm. And I think on that, on that macro level, there's this tension between right now versus, as you're saying the, the longer term. What makes us more stressed? Is it kind of, "Can't pay my bills this week?" Or is it, you use the phrase, "the good life," before. Is it sort of that we feel that even if I could pay the bills this week, I still don't feel like I'm building toward a good life for me, or for my family, or for my children?

Brigid Schulte: You've really hit an important point. Human beings, when we think about how we make decisions, we have, what would, what I guess what some people would call, "present bias." Where we are in the moment is very powerful. You know, it's very concrete in this moment. It's hard for us to think in the future. Like, even though I may want to save for retirement in the future, or even though I may have these larger goals for my life, uh, for the good life in the, in the longterm, it's, it's so much more theoretical. It's, it's hard to grasp. And so we tend to focus on the here and now. And that's where things like the behavioral economist work around 401(k)s and flipping from making choices, and decision fatigue, instead, turning it into a default of every time you get a new job or a company offers a 401(k), instead of opting in, the default is you have to opt out. That has completely changed the way people save over the long term.

Mike Norton: Trying to set some rules or guidelines or defaults, in a sense, might be one way to help us stick a little bit better to spending our time in ways that we might prefer and also maybe being a little bit sounder with our money.

Brigid Schulte: Yeah, so that's been really some interesting behavioral science on scarcity, like when you feel money scarcity, or poverty, or when you feel like time scarcity, and this time pressure, that what happens is, uh, you know, it's a phenomenon that they've actually found, they call it, "tunneling." You know, you just think about it, your breath gets shorter. And so you, your, what they found is that, like, our cognitive bandwidth, if you will, shrinks. Our ability to see other options shrinks. And we tend to, like in a tunnel, we're only able to see the things right immediately in front of us, you know, low value tasks, or, you know, low hanging fruit. And so what happens, then, when you're making those kinds of low value decisions, it just perpetuates that feeling of stress and overwhelm, and [deep inhale] you know, that you don't know what's going on. And so one of the most important things, like the first thing to do, is to just break that cycle, to just take that deep breath. You know, uh, the cortisol levels do go down. Three deep breaths do amazing things in your body to calm your stress and cortisol levels down. You know, it brings back some of that cognitive bandwidth. Gets you out of the tunnel, so that you can make those decisions that are good for now, as well as in the future.

Mike Norton: I'm always so interested in the idea that we, the things that we prescribe, for example, for, for children to try to help them be a little bit better in their lives, we never apply them to ourselves, like the the idea that when little kids are angry, we say, "Now take some deep breaths." [laughter] Or maybe, you know, "Go to another room and calm down for a minute before you decide whether you want to punch that person or not."

Brigid Schulte: Right. Right.

Mike Norton: You know, we say these things and then we turn around and we don't apply it in our own lives at all. But in fact, it can really help us to make slightly better decisions.

Brigid Schulte: Yes.

Mike Norton: Is there any chance, and I'm just asking is for a friend, that reducing these levels of stress can cause your, the hair on your head to grow back? [laughter] And it's totally not related to me, but does this, anybody at Yale study that at all? Is there any hope?

Brigid Schulte: You know, I, if they do, I don't know about it. So if, uh, if I find out, I will certainly let you know.

Mike Norton: Maybe the Better Life Lab could kind of get on that for, for, for my friend, excuse me, and we could have another discussion in a few months, Brigid.

Brigid Schulte: I'll see what we, I'll see what we can do.

Mike Norton: Final thoughts on what we can do to solve this problem in just one easy step? That was a joke. [laughter]

Brigid Schulte: Yeah, one easy step, no. But I do, what I do want, the important thing to remember, so many, you know, it's not like stress is ever going to go away. But we learn how to manage it better. Recognize that there are choices that we can make, and really focusing in on what's the most important. And making decisions is tough. I mean the, the root of the word, "decide," comes from like, "kill." You know, you have to kill off other options. And part of the problem is there's so many great options out there. But to recognize that you, you know, you have finite time, you have finite cognitive bandwidth. You can't do everything in a day. You can't do 75 things on your To Do list. What is the one thing you can do? [music starts] What is the one thing at home that's most important, or one relationship that you're going to focus on that day or that week? And I think if we can manage our expectations more, that can go a long way in helping us manage that overwhelm, and busyness.

Mike Norton: Brigid Schulte, thank you so much for joining us.

Brigid Schulte: Hey, thanks so much for having me.

[music]

Allison Schrager: I like what Brigid was saying about all the ways we don't always have control over what's happening to us, day to day, or in the wider world. And that certainly can make us feel vulnerable or overwhelmed. But she also points out ways in which we have more control than we think.

Mike Norton: Yeah, I think this idea that money can be a source of stress, and it is for a lot of us. But we also could use our money in more productive ways to actually relieve stress, and maybe even use money instead of being unhappier, actually be happier by changing the way we spend our money. I spoke with Ashley Whillans who's a social psychologist, and actually colleague of mine here at Harvard Business School, about her research on how shifting the way we spend our money, and also just how we think about our money, can not only reduce our stress, but also improve our health.

[music]

Mike Norton: So, we're gonna talk about your research on happiness and how we can get happier.

Ashley Whillans: Um-hmm.

Mike Norton: But I want, we need to start on something a little bit negative.

Ashley Whillans: Yeah.

Mike Norton: Which is, can you explain to us mainly how to avoid, but also, what is "stink eye"?

Ashley Whillans: Oh, okay. So, you know, I used to be an actor before I was an academic and,

Mike Norton: Like most professors,

Ashley Whillans: Yeah.

Mike Norton: Yeah.

Ashley Whillans: So to be clear, I wasn't a very good actor. So I had to pick another profession after acting was done with me. And uh, my biggest claim to fame is a two second part in the movie, Juno, in which Polly Bleecker says to Ellen Page's character, "Your little girlfriend gave me the stink eye in art class yesterday." And then Ellen Page says, "That's not my girlfriend. That's just the way her face looks. That's just her face." And then there's a two second clip of my face.

Mike Norton: And how did that not then lead to like TV commercials with stink eye in them? You'd think that would have built out to a stink eye career?

Ashley Whillans: It unfortunately did not. But I do sometimes pull that out, you know, while MBA teaching,

Mike Norton: So, moving on from stink eye to something a little more positive, what I really wanted to talk to you about is this idea of money and happiness. And I bet you get asked all the time, "What's the salary at which money doesn't matter anymore for our happiness?" Sometimes people say seventy thousand dollars a year, goes around in the media from time to time. Do you know the exact number? Or is it more complicated than just one single number?

Ashley Whillans: It's more complicated than one number. I think the, the best paper on this was published about a year ago, kind of updating that number. It's much higher than $75,000. Closer, more, to a hundred thousand, one-twenty. So it used to be that once your basic needs were met, money no longer predicts your overall evaluation of your life,

Mike Norton: Um-hmm.

Ashley Whillans: How well you think you're doing generally in life.

Mike Norton: So if you hit a certain salary, like $75,000 or maybe $100,000. Any more money after that isn't really gonna make you that much happier, because your basic needs, food and shelter and healthcare, are being met.

Ashley Whillans: Yeah. Exactly. And the story has shifted a little bit such that it's better to meet more than your basic needs. Meeting your basic needs and, and then some. The question that you're asking is also depends on what we're looking at in terms of the outcome.

Mike Norton: Um-hmm

Ashley Whillans: So there's different facets of happiness that researchers like to look at.

Mike Norton: I see.

Ashley Whillans: So when you're looking at overall evaluation in life, this kind of global sense that you're, you're doing well on average, this is where you get that kind of leveling off. After about this $100,000 point, money no longer predicts greater overall life satisfaction. And if anything, in most countries around the world, when you make a lot of money, overall life satisfaction sort of dips. But, in terms of how much joy you experience on an everyday basis, that actually has really no association with how much money you make. So the amount that you make doesn't necessarily predict how much you laugh or smile on a daily basis.

Mike Norton: I see.

Ashley Whillans: And it's because money, unless, unless you're using it in ways that promote happiness, like social connection or having good positive experiences in your everyday life, actually it doesn't necessarily change the way that you spend minutes, hours, weeks, in terms of all of these kinds of daily activities, these time-use activities, which really do matter for, for happiness.

Mike Norton: And so are we, are we doomed? Is there anything we can do?

Ashley Whillans: Yeah. I think when we think about work/life balance, when we think about freeing up some more of our time, when we think about changing our behavior in ways that are going to have these really dramatic increases in our happiness, we're thinking about things like, quitting my job,

Mike Norton: Uh-hmm.

Ashley Whillans: Uh, leaving my partner. Uh, moving to a completely different country. And our research really suggests that it's small changes around the margins that, that can have powerful and unexpected impacts for happiness. And some of these small changes that kind of allow us to, to have more time, in my research, have pretty significant increases for, for happiness, both the overall evaluation of my life and also how much joy we experience on an everyday basis as compared to how much stress. So some of these small, simple decisions that people can make around the margins to have more and better time are things like, when you're making a consumer decision, be willing to give up some of your discretionary income to have more time, like taking a direct flight, which will get you from point A to point B faster, will cost more money, but will save you those terrible moments in the airport going through security lines.

Mike Norton: Some people may have a, uh, spouse or partner who spends like 11 to 12 days booking each flight trying to find the optimal flight path. And then they feel really good about finding the like, optimal, cheapest flight path. But they've wasted 11 days of your

Ashley Whillans: So,

Mike Norton: Time together. And so people often aren't thinking, "Let me see if I can save time in that flight or something." But they're forgetting that it's taking up time that they might use for other things.

Ashley Whillans: Yeah, exactly. So one way you can actually trick yourself into making better decisions is simply reminding yourself of the opportunity costs.

Even just reminding yourself, "By me doing these three loads of laundry, as opposed to outsourcing them on this really busy weekend, that means I have to do laundry versus doing literally anything else." And even just reminding people they could do anything else other than the laundry with those two or three hours, makes people more likely to want to outsource some of their disliked tasks. So we need to kind of, you know, kind of remind ourselves, we're living in this fast-paced society that really values work and that it's okay to ask for help. It's okay to pay, if that means that you can actually spend more enjoyable time with people that you care about.

Mike Norton: Are there things we can sort of commit ourselves to? You talked a little bit just now about sort of outsourcing,

Ashley Whillans: Um-hmm.

Mike Norton: How do we get ourselves to outsource tasks so that we can use that time for, for something else?

Ashley Whillans: Yeah, so the gig economy has made this increasingly easy and accessible and affordable. So it's kind of getting over the guilt. So we have a lot of data showing that, in general, we feel bad asking for help. We also even feel bad paying someone to help us. So even when there's a market transaction, we feel guilty.

Like, "We can't, we're so busy that we can't keep up with all of the demands in our everyday life that we can't even do our laundry? Like, that's sad. I'm a sad person now."

Mike Norton: I see.

Ashley Whillans: I've had this experience and I study this. I'm like, in the middle of my teaching semester, I see like three weeks of laundry on the floor and I'm like, "Ashley, you, you can do your laundry." And then I just leave it there. And I walk out the door.

Mike Norton: So it's like I, you want to be the kind of person that can handle it yourself.

Ashley Whillans: Um-hmm.

Mike Norton: And that could be a barrier to trying to outsource at least some small tasks, some of the time.

Ashley Whillans: Exactly. Again, I think it's about thinking about the opportunity costs. We're really bad at spontaneously thinking about what we're not doing in the moment of doing.

Mike Norton: So, we've been talking a lot about using money to buy yourself better time in lots of different ways. One of them is definitely outsourcing, as we already discussed. But there's also lots of ways that spending money doesn't seem to pay off in much more happiness. And we know that the biggest category is buying stuff for yourself.

Ashley Whillans: Yeah.

Mike Norton: And the problem is it feels so good to buy stuff for yourself in the moment. Like, every new product we buy we're so, so happy about buying it. But all the data shows that that wears off so quickly, and then we end up exactly back where we were before. Not only the small purchases like, you know, buying new clothes and buying new music, and things like that, but even the biggest purchases we make. So, the size of our house has no relationship to how happy we are with our life. Or, how nice our car is has no relationship to how happy we are with our life. Any other ways we can think about using our money to actually be happier?

Ashley Whillans: Yeah. So another line of research says a really profitable path to greater happiness through our spending is by spending money on others. So using our money to help those in our communities and, and in our social networks. And so some of the research that I've, I've done, uh, I know you've done lots of this research, uh, but some of the work that I was involved in looked at not only how helping others has happiness benefits, but also how it can protect against these stressful feelings that I've been talking about, that we all experience so much in our everyday lives.

Mike Norton: And how does that work? So, so, how do you show that people, is it just that helpful people are kind of healthier people?

Ashley Whillans: Yeah. We recruited participants, um, for an eight week long study and we, we gave them three payments of $40 that they could spend on themselves or that they could spend on others. And then we tracked their stress levels and their physical health over the course of the study. And I think it's worth pointing out that we recruited a sample that we thought would benefit most from pro social spending, which are older adults who are experiencing, kind of lower quality of life. And what we found is that these older adults with high blood pressure who were randomly assigned to spend money on others over the course of the study showed a significant reduction in systolic and diastolic blood pressure, two major indicators, over the course of the study that were similar in magnitude to starting a new aerobic exercise program. So they're pretty striking findings. People were protected from the negative experience of stress in the context of their everyday lives. And helping others has these kind of protective effects, or what researchers call, "stress buffering effects," because it, helping others makes us feel in control and competent. We can see the positive impact that we're making in the world and it helps us feel capable.

Mike Norton: Some of the research you talked about is that when we use our money to spend on others or to change our time, some of it is that it kind of improves things for us. And then another part of it seems like it, it buffers the bad things away from us, so that stress doesn't hit us as much as it might otherwise. So people are so worried about their time, they're so worried about their money, and stressed. Are those kinds of stress the same? Is, is stressing about money, worse or more important, or something that we should really try to cope with first?

Ashley Whillans: Yeah. So I have some data suggesting that money stress, being really concerned about our finances, does have more of a detrimental effect than, than maybe being time stressed, or, or worrying about how we're going to get everything done in a day. So, this feeling of, one, financial insecurity, so just feeling like you don't have enough, regardless of how much money you actually have, can have really negative effects for stress and, and wellbeing. And people who base their self worth on their finances are really stressed out by, you know, small, simple decisions around time and money, and wellbeing.

Mike Norton: It sounds like there's at least two components to this, this sense of money stress that can be so, so detrimental. And one is feeling that we don't have enough, which, which some people don't have enough, but it also sounds like it almost doesn't matter how much you have. Some people still are always going to feel like they don't have enough, even if they had millions of dollars and they'll be stressed. And then the other component seems to be feeling that we don't sort of have as much as others, kind of the, "I need to be, my self esteem is all about having like a slightly, you know, larger house than my neighbor." Or whatever it might be. And those two things combined, which many people experience, of course, it seems like maybe that's why this money stress can be so impactful on our wellbeing.

Ashley Whillans: Yeah. And, and we actually have data showing that people at the very top end of the distribution in most countries around the world are less happy. Their reference points changed. Their neighbors have larger yachts and larger homes than they do. Or maybe they're looking to, to even people with higher levels of wealth to compare themselves to, which undermines even their happiness.

Mike Norton: Now, what I've done in that situation is I just buy more yachts. So rather than compete on size of the yacht, right, you just diversify and have yachts in various marinas.

Ashley Whillans: I think that's a good strategy. Yeah. You know, you shift to, to a category that you can win. [music starts] I think. I think that seems like a healthy coping response to that.

Mike Norton: Ashley Whillans, thanks so much for joining us.

Ashley Whillans: Thanks so much.

[music]

Allison Schrager: Hey, Mike, after talking to Brigid and Ashley, how optimistic do you feel about the future of the human race?

Mike Norton: I think I would say five out of seven.

Allison Schrager: That's not bad.

Mike Norton: But I'm not, I'm not really sure what the, what the scale is. But I feel there's some bad news. But there's also some good news. So we're, we're not like a one out of seven. But we're not a seven out of seven. So I feel like five is good, like some stress is necessary. It's good that we have it. It motivates us to do stuff. But too much stress is kind of detrimental and can have really bad effects on our health, but also on our decision making, which then can have effects on our finances, which then has more effects on our well being.

Allison Schrager: So you know, some stress is good. But it's also important to do some meditation.

Mike Norton: If you can find the time. [laughs] I think meditation is so fantastic. But I do think for Ashley thinking about how can we use money to help us have better time. So instead of being stressed about money all the time thinking about money as a resource to change what we're doing. Thinking about the opportunity cost of the choices we make, and using our money to make better choices, so that we can spend time in ways that give us peace of mind, make us spend more time with our friends and family, and improve our quality of life.

Allison Schrager: Or you could buy an app that helps you meditate.

Mike Norton: And it only takes a couple seconds to download.

Allison Schrager: Yeah, and probably only $1.99.

Mike Norton: Of course, one of the curses with that is you think that you will, when you make those changes, you'll constantly keep using that app or making that decision every day that will make your life better off. But we're also really present-biased. So we might have these lofty plans for later in the future. We might think we're making great decisions that will change our life. But we often slip down the road. So I think both Brigid and Ashley talked about putting things in place right now that make sure that we'll stick to our different behavior and our new goals going down the road.

Allison Schrager: Yeah, like my meditation app zaps me with a little volt of electricity if I don't meditate every day.

Mike Norton: Yeah. And also I think zaps your loved ones as well. So you have even more guilt, that you didn't do the good thing. It's a good idea for a product actually. [laughter]

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Mike Norton: The last thing I thought that was so interesting that Ashley talked about was this idea that we often think of stress as emotional or psychological. And of course it is that. But so much research says actually that it's physical as well, that stress has these negative physical consequences on us. And, and her research showing that, that giving money to others, that spending on others, that being generous, can actually improve heart health. I think it's such an interesting example of how the decisions we make with our money really end up influencing us in our lives overall. And that we're not sort of helpless, that we can actually change what we do with our money, and how we think about our money, and end up being better off.

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Allison Schrager: Talking Green is an original podcast from TD Ameritrade and T Brand Studio at The New York Times. Learn more about financial wellness at NYTimes.com/TalkingGreen.

Mike Norton: This was the last episode of season one. Subscribe to listen to the rest of the season and to make sure you don't miss out on future episodes. I'm Mike Norton.

Allison Schrager: And I'm Allison Schrager.

Mike Norton: Thanks for listening

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