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Improving your Habits with Choice Architecture

Posted on by by Posted in Achieving Goals, Book Recommendations, Financial Decisions, Health Decisions, Performance, Academic Achievement, Procrastination, Productivity, Time Management

Choice Architecture Coaching to Improve Habits Picture credit: Ben Deavin

What is choice architecture, and how can we use it to improve our own decisions?

Choice architecture is the art and science of how to present choices to decision makers. The way a choice is presented to us has a much bigger influence on our behavior than we may realize. For example, children eat more fruit when fruit is placed in more prominent positions in a school cafeteria. Or, people are more likely to enroll in retirement savings plans if the employer makes that plan the default option – which is the option that happens when you do nothing. Similarly, people eat less when the default serving size is smaller.

Two recent books shine a light on choice architecture, and on how it affects our decisions:

Eric Johnson’s The Elements of Choice (2021) offers a guide to creating effective choice architectures. The designers of decisions need to consider all the elements involved in presenting a choice: how many options to offer, in which order to present those options, whether to organize them into categories, how much information to provide, whether to make one of them a “default”, etc. We don’t appreciate those factors enough, and we’re often unaware of just how much they influence our choices every day.

With Nudge: The Final Edition (2021, a revised version of their 2008 bestseller), Richard Thaler and Cass Sunstein advocate what they call “libertarian paternalism”. This is the idea that it is both possible and desirable (in particular for public institutions, but really for any well-meaning choice architect) to affect people’s behavior for the “better”, while also respecting their freedom of choice. They argue that consumers and citizens should be nudged to help them make the kinds of choices that they would most likely also naturally prefer, if they were making “optimal” (or rational) choices for themselves. What is optimal is not the same for every individual, but I generally define it as the choice that is most aligned with the person’s values.

Both of these books are geared mostly towards “curators” of other people’s choices: for example, the staff of a school cafeteria who gets to decide where to place the fruit, or the employers who present retirement savings plans to their employees. My interest lies more in helping people improve their own choices, but the findings of both books are highly relevant for that. In fact, Eric Johnson concludes his book by advising us to apply the golden rule: “Design for others as you would like them to design for you”. Given that we actually often find it easier to make good decisions for others than for ourselves, I would like to turn this around: “Design for yourself as you would design for others.”

How can you use the tools of choice architecture to improve your own behaviors and habits?

Here are some examples of how you can apply the elements of good choice architecture to your own choices, to help you to improve your habits and change your behaviors in positive ways. It may all sound too simple, and chances are you’ve heard it all before. However, it really does make a difference – in fact, food choices seem to be particularly responsive to choice architecture interventions. Perhaps more generally, choice architecture interventions may be an effective tool for changing habits that are notoriously difficult to change.

1. Defaults:
Set defaults for yourself that reflect your long-term goals. For example: would you like to save more money? If so, enroll in an automatic savings plan, where some amount of your income will automatically be transferred to a savings account. (Increase that default amount beyond your comfort zone if you want to save more aggressively.) Would you like to eat more healthily? Stock your fridge and pantry with healthy options, and move the unhealthy options out of sight and out of easy reach. Do you want to get in the habit of going for a walk first thing in the morning? Get your walking clothes ready the night before, so that dressing in those will be your easiest option in the morning.

2. Primacy effects:
When we’re facing many options, we’re more likely to choose those we see first. How can you make this effect work in your favor? For example: would you like to eat more salads instead of other dishes when you eat at a restaurant? If so, make it a habit to always study the salad section first. You’ll be more likely to find something attractive among the things you read and imagine first.

3. Expecting errors:
Choice architecture has the most impact on vulnerable groups. You may not think of yourself as belonging to a vulnerable group. However, aren’t there times in all our lives when we’re more vulnerable to making bad choices? Maybe early in the morning, or late at night when we feel tired? Maybe after the first or second glass of wine? Be aware of what your weak moments are, and design your choices for those situations with even more care and intention.

If you would like help in applying choice architecture tools to your own live, I’d love to hear from you. I’d be excited to help you design and carry out your own interventions to make your life easier and better.

Contact Ursina Teuscher about choice architecture and coaching

by Ursina Teuscher (PhD), at Teuscher Decision Coaching, Portland OR


Summer Reading List 2019

Posted on by by Posted in Achieving Goals, Book Recommendations, Career Development, Financial Decisions, Procrastination, Productivity, Time Management, Risk and Uncertainty

Summer Reading List: Ursina's Book Recommendations on Creative Decision Making and Goal AchievementSomehow it became a summer tradition of this blog: here’s my latest list of book recommendations (you can see the lists from previous years here). As usual, they all have something to do with creative decision making and goal achievement. The first is a novel, the rest is non-fiction:

Wood, Benjamin (2016). The Ecliptic. A Novel. 

More than the plot, it was the premise and setting that had me hooked from the start: an isolated artists’ colony on a small island – its anonymous residents lingering for years, all expenses paid. Relieved of their own ego and the burdens of everyday life, they should be free to create their next masterpieces. Needless to say, it doesn’t work out quite so smoothly for everyone. You can start reading here.

Two excerpts highlight why this book fits this particular reading list and the topic of my blog. Here’s the voice of the protagonist Elspeth, a Scottish painter: “Any guest who could not wait to talk about the project he was working on was usually a short-termer — that was our evaluation. Anyone who proclaimed his own genius was a fraud, because, as Quickman himself once put it, genius does not have time to stand admiring its reflection; it has too much work to get finished. We never sought out the company of short-termers. We left them to work and find their clarity alone, while we got on with jabbing at our own unwieldy projects. None of us seemed to recognise the fact that our separation from the others was, in fact, a tacit declaration of our own genius — and, thus, it surely followed that we were the biggest frauds of all.”

And the voice of her mentor: “Actually, it reminds me of the work I did when I was drinking — heavily drinking. Your thoughts are leaking out of so many different places you can’t hold them. There’s no control, no discipline. Everything’s just streaming out of you and you can’t stop it. I understand what that feels like, believe me I do. Feels like freedom but all you’re really doing is shutting things out. It leads you nowhere good.”

James Clear (2018). Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones.

Of all the books on habit changes I’ve read so far, this might be the most practical yet. It focuses on small improvements and makes a compelling argument that in the case of habits, thinking small produces the biggest results over time.

Some of the take-home points:

  • Habits are the compound interest of self-improvement.
  • The most effective way to change your habits is NOT to focus not on specific goals. Focus on your system instead. “You do not rise to the level of your goals. You fall to the level of your systems.”
  • Four rules to build better habits: (1) Make it obvious, (2) make it attractive, (3) make it easy, and (4) make it satisfying. (The opposite rules apply to extinguishing bad habits.) The book goes into many examples and methods on how to apply each of those rules.
  • The greatest threat to success is not failure, but boredom. As habits become routine, they become less interesting and less satisfying. It is therefore essential that we keep improving our systems. For that we need to remain conscious of our performance with reflection and review.
  • Success, therefore, is not to reach a specific threshold or goal, but to keep improving our systems.(Conveniently enough though, this is also the best strategy to reach any specific goals.)

You can look into the first part of the book here.

Annie Duke (2018): Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts.

As a former World Series of Poker champion, Annie Duke shares a convincing perspective of how important it is to cope well with uncertainty, if we want to make better decisions. As opposed to most of us, professional poker players are comfortable with the fact that great decisions don’t always lead to great outcomes and bad decisions don’t always lead to bad outcomes, and they are unafraid to scrutinize and review their own decisions (the processes, not the outcomes!) rigorously, because they know this pays off hugely in the long run.

Annie Duke’s advice is that we need to let go of our need for certainty, and instead make it a practice to accurately assess what we know and what we don’t. One way to committing to this practice is to find a peer group that can help you build a non-confrontational, non-threatening decision review team. If you want to read a sample, here’s a preview.

Vicki Lind, Tifini Roberts, and Leslie Yeargers (2019). Landing a Job Worth Having.

This is a new handbook written by three of my colleagues at Vicki Lind & Associates. It is full of very practical tips and resources, from searching for the right position to negotiating your salary. The authors guide you through all these steps:

  • Assessing what type of job you want
  • Using job boards and social media to find those jobs
  • Building a network of contacts to put you in front of hiring managers
  • Crafting resumes and cover letters to get you interviews
  • Interviewing with confidence and build great references
  • Negotiating a compensation package that matches your worth

Summer Reading List 2019: "Landing A Job Worth Having" by Vicki Lind, Tifini Roberts and Leslie Yeargers

by Ursina Teuscher (PhD), at Teuscher Decision Coaching, Portland OR


Summer Reading List 2018

Posted on by by Posted in Achieving Goals, Book Recommendations, Career Development, Financial Decisions, Group/Interactive Decisions, Conflict Resolution, Health Decisions, Procrastination, Productivity, Time Management, Risk and Uncertainty, Strategic Planning, Business Decisions, Organizational Development

New Summer Readings: Books on Decision Making and Goal AchievementAnother hopefully long and beautiful summer is coming up, and my intention is to spend a lot of it productively: reading. Preferably in a hammock. If you feel the same, here comes my new list of book recommendations about decision-making and goal achievement.

Dan Ariely and Jeff Kreisler (2017). Dollars and Sense: How We Misthink Money and How to Spend Smarter. I’ve always enjoyed Dan Ariely’s self-deprecating sense of humor, and in this collaboration he found a great match in Jeff Kreisler. Even though I was familiar with most of the concepts they discuss, this book not only kept me entertained, but also highlighted very clearly (and sometimes painfully) the irrationalities around money that I still allow into my life. Read a sample here.

Chris Guillebeau (2017). Side Hustle: From Idea to Income in 27 Days. A practical step-by-step guide of how to create and launch a profitable part-time business. You can look into it here. Chris Guillebeau’s approach is very much no-nonsense, no fluff, no jargon – from brainstorming, shaping and selecting ideas, to launching, tracking and refining your game. While some steps would likely take more than his suggested hour per day, and while I’m not confident that I would have the discipline to follow all his steps in sequence, I do think it would make sense to do just that.

Bryan Dik and Ryan Duffy (2012). Make Your Job a Calling: How the Psychology of Vocation Can Change Your Life at Work. This book explores the powerful idea that almost any kind of occupation can offer any one of us a sense of purpose and thereby satisfaction. The authors define the idea of calling (both from a spiritual and secular perspective), review research on and provide tips for finding a calling at all stages of work and life. They also point out some dangers of pursuing a higher purpose. Here’s a preview.

Greg McKeown (2014). Essentialism. The Disciplined Pursuit of Less. Sure, we all know the importance of prioritizing and focusing, but here Greg McKeown reminds us that living and working as an “essentialist” requires sacrifices. It requires a willingness to give up a lot to gain something of much more value. The author shows how to apply this concept in work as well as leisure and family life, with a special focus on leadership. Mostly through my clients, I know there are too many high-achieving professionals at the verge of burn-out with too many tasks to juggle. For their sake, I hope the message of this book will be heard and will find the necessary traction in our organizations. Check out the beginning here.

Glenn Livingston (2014). Never Binge Again: Reprogram Yourself to Think Like a Permanently Thin Person. Stop Overeating and Binge Eating and Stick to the Food Plan of Your Choice! While I usually recommend books that are based more on data and science, this one is different: its arguments use simple examples that are nonetheless convincing. It makes us realize there are plenty of rules we are perfectly capable of following, where we don’t think of our will-power as limited. For example: I never eat food from a stranger’s plate in a restaurant; I never shoplift; I never pick a fight with strangers. Why, then, do I think that I am powerless over certain food choices in certain situations? Powerless to say NO to the free cookies on a tray, or to the unsupervised half-empty box of donuts? According to this book, it is a simple matter of getting total clarity of what you truly want, and what you don’t want (e.g., when, and it what situations, you want to eat certain types of food), putting those rules into writing, and then sticking to them. Because you know you want to, and you know you can. Friendly rules, but no more permission to screw up, ever again.
(“Trigger foods”? We’re not guns. It’s just a metaphor, and perhaps not such a helpful one, I’ve come to think. There is no actual trigger that has the power to release an uncontrollable sequence of actions in us. At any moment, we can – and will – change our behavior, based on new information and our new preferences. So we just need to get our preferences straight.)
Here’s a preview, but it’s actually a free e-book anyway. Written by a coach, it accordingly comes with some promotion of his coaching. Read it for the message, not if you’re looking for a literary masterpiece.

Laurence Gonzales (2004). Deep Survival: Who Lives, Who Dies, and Why.
I’m not sure how long this book had been lying on our coffee table when I heard it was the 2018 winner of the Eric Hoffer Award Montaigne Medal. I admit this was the reason I picked it up again this year with renewed interest. I found it for the most part a captivating read, although sometimes frustrating with lots of names in personal stories, which were chopped up across chapters – starting, stopping and taking up again later with no transitions, punishing me for skipping earlier parts. (That may be my problem – I resent non-fiction that forces me to read it as if it were a novel.) More importantly: I took issue with the oversimplified message of “mind over matter”, which I find cynical in the light of those who didn’t survive. Many of his conclusions also suffer from quite literal “survival bias” – not a pun, but a serious problem in his reasoning, although with this topic admittedly a difficult one to avoid. At the very least it should be acknowledged as a limitation. That said, I did learn some interesting lessons about dangers in unexpected places and how to (not) face them. Start reading here.

Brad Borkan and David Hirzel (2017). When Your Life Depends on It: Extreme Decision Making Lessons from the Antarctic.
Also a book about decision-making in extreme life-and-death situations, this one takes a more systematic approach, and offers more substantial and original content, despite being based on an older history: it takes us back to the very first expeditions of early explorer teams to the Antarctic in the early 1900’s. The authors analyze the decisions made by several competing teams and discuss fascinating questions about leadership, as well as followership, under these extreme conditions. Look into it here.

by Ursina Teuscher (PhD), at Teuscher Decision Coaching, Portland OR


Valentine’s Special: Chocolate and Coaching

Posted on by by Posted in Achieving Goals, Coaching Practice, Financial Decisions, Health Decisions

I’m offering a new coaching package for couples. Could you use some help improving your shared time management, figuring out priorities, getting better organized together? If you sign up for your first exploratory Strategy Session before Valentine’s Day, you’ll receive a box of the world-famous Teuscher Champagne Truffles at our first meeting.

Read more about the couples coaching program and schedule a first session here.

Couples Coaching Valentine Special
And no, you’re not the only one wondering: people keep asking me whether I’m related to the “Chocolate Teuschers”. Sadly, not that I know of. But that won’t stop me from loving them, and from using their most delicious treats to get us all started on a sweet note.

by Ursina Teuscher (PhD), at Teuscher Decision Coaching, Portland OR


Consumer Decisions: Should we Invest into Possessions or Experiences?

Posted on by by Posted in Financial Decisions

If your finances are limited at all as a consumer, you are constantly faced with the decision: how should you spend your money in order to get the most lasting happiness and satisfaction from your purchases? 

With the holidays and the gifting season coming up for many, this is a particularly important question, because you may be spending money on others, not just on yourself.

Consumer Decisions: Possessions or Experiences?

Photo by Duncan Rawlinson

Should we buy possessions or experiences?

A lot of research shows that spending our money on experiences, such as vacations and concerts, makes us happier than buying material possessions, like clothes and electronic gadgets. For experiences, we’re also more likely to regret inaction, that is the decision NOT to buy, as a missed opportunity. For material purchases on the other hand, we’re more likely to regret action by feeling buyer’s remorse afterwards.

A very recent study shows that we like to delay gratification more if the rewards are experiences, rather than material goods. In other words, when we buy things like clothing or gadgets, we want to use them right away. But when we pay for experiences, like vacations or meals out, we don’t mind some waiting before the event. You might say this makes sense, because once we have the material possessions, we can keep them, so why not get them sooner rather than later?

However, somewhat counterintuitively, the happiness we derive from material goods doesn’t actually last that long. One study asked people how happy they were with material and experiential purchases. Initially, their happiness with those purchases was ranked about the same. But over time, people’s satisfaction with the things they bought went down, whereas their satisfaction with experiences they spent money on went up.

Isn’t it strange that the happiness we get from a physical object, which we can keep for as long as we want, lasts less than the happiness we get from an experience?

Why do experiences make us happier and keep us satisfied for longer?

In the long run, it is perhaps obvious that most material possessions, being physical objects, lose some of their initial value, such as by wearing out, breaking down, or going out of fashion. But even before that, one problem with material things is that we adapt very quickly to them, because of the very fact that they stay with us. In general, we seem to adapt much more quickly to new things and situations than we expect – for better and for worse. Therefore, the very durability of a possession eventually robs it of its power to make us happy – and faster than we think. Experiences on the other hand, being intangible, not only suffer no such decline, but often get romanticized as they live on in our memories and our stories. They therefore often increase, rather than diminish, in value.

There are several other explanations why experiences make us happier and keep us satisfied for longer than possessions.

With this in mind, Happy Thanksgiving!

by Ursina Teuscher (PhD), at Teuscher Decision Coaching, Portland OR


Selected References:
Boven, L. V., Campbell, M. C., & Gilovich, T. (2010). Stigmatizing Materialism: On Stereotypes and Impressions of Materialistic and Experiential Pursuits. Personality and Social Psychology Bulletin, 36(4), 551–563.
Caprariello, P. A., & Reis, H. T. (2013). To do, to have, or to share? Valuing experiences over material possessions depends on the involvement of others. Journal of Personality and Social Psychology, 104(2), 199.
Carter, T. J., & Gilovich, T. (2010). The relative relativity of material and experiential purchases. Journal of Personality and Social Psychology, 98(1), 146–159.
Carter, T. J., & Gilovich, T. (2012). I am what I do, not what I have: The differential centrality of experiential and material purchases to the self. Journal of Personality and Social Psychology, 102(6), 1304.
Carter, T. J., & Gilovich, T. (2014). Getting the Most for the Money: The Hedonic Return on Experiential and Material Purchases. In M. Tatzel (Ed.), Consumption and Well-Being in the Material World (pp. 49–62). Springer Netherlands.
Chatterjee, S., Rai, D., & Heath, T. B. (2016). Tradeoff between time and money: The asymmetric consideration of opportunity costs. Journal of Business Research, 69(7), 2560–2566.
Kumar, A., & Gilovich, T. (2016). To do or to have, now or later? The preferred consumption profiles of material and experiential purchases. Journal of Consumer Psychology, 26(2), 169–178.
Mogilner, C., & Aaker, J. (2009). “The Time vs. Money Effect”: Shifting Product Attitudes and Decisions through Personal Connection. Journal of Consumer Research, 36(2), 277–291.
Rosenzweig, E., & Gilovich, T. (2012). Buyer’s remorse or missed opportunity? Differential regrets for material and experiential purchases. Journal of Personality and Social Psychology, 102(2), 215–223.
Van Boven, L., & Gilovich, T. (2003). To Do or to Have? That Is the Question. Journal of Personality and Social Psychology, 85(6), 1193–1202.


Decision Skills Matter

Posted on by by Posted in Financial Decisions, Health Decisions, Intuition, Risk and Uncertainty

To what extent do decision skills matter in real live? Do these skills actually lead to better decision outcomes and fewer unpleasant life events?
Decision Skills Matter
Or, more specifically: do people who perform better on hypothetical decision tasks also make better real-world decisions, to the extent that they experience better outcomes over the course of their lives?

Let’s take a step back. Based on all the different theories of what counts as a “rational” choice, we know that some people perform better in the kinds of choices that are typically presented in research studies. There are people, for example, who are less affected than others by the way information is presented to them (in other words, they are better able to resist framing effects). Or, while most people are overconfident most of the time, some people actually have a pretty accurate level of confidence into their own judgments. There are also people who are better able to abandon a bad plan that involves sunk costs, while others are more prone to keep throwing good money after bad. We also know that these decision skills are related to other cognitive abilities, and that they can be taught and improved with explicit instructions and practice. (Check out the list of references below for just a sample from a large body of research.)

The question is though: do people who perform better on those sorts of tasks also make better real-world decisions? And most importantly, can those better decisions be measured by better outcomes? Are “skillful” decision-makers, as defined by those measures, perhaps better able to avoid bad life events?

Apparently, the answer is a robust YES, across different ways of measuring the quality of decisions and the quality of decision outcomes.

For example, in one study, the researchers gave people hypothetical tasks to measure their decision skills. The test they used is called A-DMC, for Adult Decision Making Competence, and it measures skills such as resistance to framing effects, ability to disregard sunk costs, over- and under-confidence, or the ability to process complex information in a decision.

The researchers then asked people about a variety of stressful life events that could result from poorly made decisions. The events ranged from serious (declaring bankruptcy, being diagnosed with Type 2 diabetes) to minor (getting blisters from sunburn, throwing out groceries you bought because they went bad). Other examples of stressful life events included missing a flight, getting kicked out of a bar, having your driver’s license revoked, or having spent a night in a jail cell.

It turned out that people who performed better in hypothetical decision tasks (as seen in high A-DMC scores) were indeed less likely to have experienced such negative life events.

Other research has also linked performance on decision-making competence tasks to better real-life outcomes, such as fewer suspensions among students.

It is important to note that not everyone is dealt the same hand when it comes to avoiding stressful life events. For example, people from disadvantaged socio-economic backgrounds are exposed to more negative life events. Also, poor decision outcomes are more common among younger people. However, the relationship between decision-making competence and better decision outcomes was still significant even after the researchers controlled their analysis for socio-economic status and age.

Granted, even the soundest decision-making processes cannot guarantee good outcomes. Given all the uncertainties in life, unpleasant surprises are often inevitable, even to skilled decision makers. However, what these studies confirm is that across time, people, and decisions, good decision processes predict good decision outcomes on average.

After knowing this, it bears repeating: decision-making competence can be taught and improved. Several independent research groups across different countries, using different types of interventions at schools, have shown clear improvements in decision skills as a result of targeted decision education.

by Ursina Teuscher (PhD), at Teuscher Decision Coaching, Portland OR

Selected References:
Blais, A.-R., Thompson, M. M., & Baranski, J. V. (2005). Individual differences in decision processing and confidence judgments in comparative judgment tasks: The role of cognitive styles. Personality and Individual Differences, 38(7), 1701–1713.
Brady, S. S., & Matthews, K. A. (2002). The influence of socioeconomic status and ethnicity on adolescents’ exposure to stressful life events. Journal of Pediatric Psychology, 27(7), 575–583.
Bruine de Bruin, W., Parker, A. M., & Fischhoff, B. (2007). Individual differences in adult decision-making competence. Journal of Personality and Social Psychology, 92(5), 938–956.
Del Missier, F., Mäntylä, T., Hansson, P., Bruine de Bruin, W., Parker, A. M., & Nilsson, L.-G. (2013). The multifold relationship between memory and decision making: An individual-differences study. Journal of Experimental Psychology: Learning, Memory, and Cognition, 39(5), 1344–1364.
Jacobson, D., Parker, A., Spetzler, C., Bruine de Bruin, W., Hollenbeck, K., Heckerman, D., & Fischhoff, B. (2012). Improved learning in U.S. history and decision competence with decision-focused curriculum. PloS One, 7(9), e45775.
Levin, I. P., Gaeth, G. J., Schreiber, J., & Lauriola, M. (2002). A New Look at Framing Effects: Distribution of Effect Sizes, Individual Differences, and Independence of Types of Effects. Organizational Behavior and Human Decision Processes, 88(1), 411–429.
Lui, V. W. C., Lam, L. C. W., Luk, D. N. Y., Chiu, H. F. K., & Appelbaum, P. S. (2010). Neuropsychological performance predicts decision-making abilities in Chinese older persons with mild or very mild dementia. East Asian Archives of Psychiatry, 20(3), 116–122.
Marin, L. M., & Halpern, D. F. (2011). Pedagogy for developing critical thinking in adolescents: Explicit instruction produces greatest gains. Thinking Skills and Creativity, 6(1), 1–13.
Parker, A. M., Bruine de Bruin, W., & Fischhoff, B. (2015). Negative decision outcomes are more common among people with lower decision-making competence: an item-level analysis of the Decision Outcome Inventory (DOI). Cognition, 6, 363.
Parker, A. M., de Bruin, W. B., & Fischhoff, B. (2007). Maximizers versus satisficers: Decision-making styles, competence, and outcomes. Judgment and Decision Making, 2(6), 342–350.
Reyna, V. F., & Farley, F. (2006). Risk and Rationality in Adolescent Decision Making Implications for Theory, Practice, and Public Policy. Psychological Science in the Public Interest, 7(1), 1–44.
Stanovich, K. E. (1999). Who Is Rational?: Studies of Individual Differences in Reasoning. Psychology Press.
Stanovich, K. E., Grunewald, M., & West, R. F. (2003). Cost–benefit reasoning in students with multiple secondary school suspensions. Personality and Individual Differences, 35(5), 1061–1072.
Stanovich, K. E., & West, R. F. (2008). On the relative independence of thinking biases and cognitive ability. Journal of Personality and Social Psychology, 94(4), 672–695.
Teuscher, U. (2003). Evaluation of a Decision Training Program for Vocational Guidance. International Journal for Educational and Vocational Guidance, 3(3), 177–192.

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Upcoming Workshop: Business Vision

Posted on by by Posted in Financial Decisions, Strategic Planning, Business Decisions, Organizational Development

Workshop: Business VisionMy next workshop is targeted to small business owners, solo-preneurs, people in private practice, or those interested in starting a business. It will be an intensive session to hone your business vision and mission.

The workshop is limited to a small number of participants to allow for a very personalized and interactive approach. We will work together to systematically explore your vision and purpose as a business, and to clarify your intention, values and goals.

As a take-home gift, you will receive a little guidebook for strategic planning. The guidebook goes beyond the contents of the workshop. It can serve as your own resource later on if you choose to develop a more detailed strategic plan based on your core vision.

If you know of people who are either thinking of starting a business or are running their own small business or private practice, I would love it if you could forward this announcement.

Workshop: Business Vision

Time:
Thursday, May 26, 4pm – 7pm

Location:
522 SW 5th Ave, Conference Room 7th Floor
Portland, OR 97204

You can see the full announcement and register here.

by Ursina Teuscher (PhD), at Teuscher Decision Coaching, Portland OR

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Numerical Skills for Financial Decisions

Posted on by by Posted in Financial Decisions, Health Decisions, Risk and Uncertainty

Relatively few people own private long-term care insurance, even though long-term care is one of the largest financial risks currently facing older people. A new study suggests that poor numerical skills may explain a part of that phenomenon: people with better numerical skills (even after controlling for education and cognitive function) are more likely to hold long-term care insurance.

Given the complexity of this particular financial decision, it is not surprising that a lack of numerical skills would create barriers. Assessing the value of a private long-term care insurance policy involves a variety of calculations, such as determining the probability of needing care, evaluating the likely lifetime expense of premiums against the payments one could expect to receive, and comparing the costs and benefits of insurance against other strategies to manage the same risks. It is easy to feel overwhelmed by all this. A lack of skills to deal with all those numbers would certainly prevent people from making the best decisions for themselves.

As for so many problems, investing into education seems a good idea if we want to empower everyone to prepare well for their own future. In addition though, I think it’s important to directly offer people help with some of those complex decisions processes.

What do you think? How do you navigate such a complex financial decision? 


Reference:
McGarry, B. E., Temkin-Greener, H., Chapman, B. P., Grabowski, D. C., & Li, Y. (2016). The Impact of Consumer Numeracy on the Purchase of Long-Term Care Insurance. Health Services Research, n/a–n/a (article first published online: 22 JAN 2016). http://doi.org/10.1111/1475-6773.12439

by Ursina Teuscher (PhD), at Teuscher Decision Coaching, Portland OR


Featured Video: Raise Your Children As Entrepreneurs

Posted on by by Posted in Career Development, Creative Thinking, Financial Decisions, Procrastination, Productivity, Time Management

Entrepreneurial skills are not a part of traditional education, even though they are important if we want to empower more people to make an independent living in a world where not everyone can find a good job.

In this TED talk, Cameron Herald argues that we should encourage and foster those skills in children. He makes a case that entrepreneurial traits occur quite naturally in children and can be encouraged and reinforced in playful ways. He gives many practical suggestions how parents can help their children develop those skills. For example, rather than giving children allowances and thereby getting them used to expecting a regular paycheck, children could be paid for specific projects.

Many important traits could be developed in that way, including such big ones as creativity, social skills, a proactive attitude towards working, and an understanding of what it means to create value for others.

by Ursina Teuscher (PhD), at Teuscher Decision Coaching, Portland OR


Poll Results: My Readers’ Guesses on Retirement Savings

Posted on by by Posted in Achieving Goals, Financial Decisions

Thanks to all of you who submitted your guesses on retirement decisions!

You can still access the poll, and read the original post.

We always hear that people are not saving enough money in this country, and I was therefore curious to find some actual data on how people are doing with their retirement savings. But I was also curious as to how my readers would estimate the numbers. Here are the results of my little poll and my search:

Poll results. My readers' guesses on retirement savings

Poll results. My readers’ guesses on retirement savings, compared to data from the U.S. Census Bureau.

My readers’ guesses are shown in red, and the correct answers according to the U.S. Census Bureau in blue.

Sadly, it turns out you all were not nearly pessimistic enough! The actual data look a lot bleaker than my average reader’s guess. As many as 80% of Americans aged 30-54 believe they will not have enough money for retirement; 38% don’t save anything at all, and only 4% of those who started working by age 25 have an adequate capital for retirement by age 65. Those numbers should scare all of us, whether we are in the fortunate few percent or not.

Income and inheritance inequality aside, what can help people save more money and make the best financial decisions for themselves?

One of the many possible answers is – as so often – education. Financial illiteracy is widespread among older Americans, and financial knowledge and planning are very much interrelated: people with more financial knowledge are more likely to plan and to succeed in their planning. Also, those who do plan are more likely to rely on formal methods, such as retirement calculators, seminars, and experts, and less likely to rely on family or friends. A different study showed that well-informed people are also far more responsive to pension incentives than the average person. In addition, researchers keep discovering more and more thinking traps we tend to fall into when making financial decisions. Once we know those traps, we can better avoid them.

Oh, and there’s a new app. Of course there would be. I have not tried it myself, but I have many reasons to believe that an app like this one could truly help people save: it turns “saving” into a more tangible action, it adds accountability, it has the character of a game, and it allows you to set rules (such as “whenever I buy coffee, I also put 1$ in my savings account”). In other words, it can trick you into making the decisions that your ideal self would make.

by Ursina Teuscher (PhD), at Teuscher Decision Coaching, Portland OR

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