6 Ways to Feel Better About Your Money in 2019

By Charlotte Cowles

@charlottecowles

The Cut’s financial advice columnist Charlotte Cowles answers readers’ personal questions about personal finance. Email your money conundrums to [email protected]

Photo: Mirrorpix via Getty Images

It’s time to throw in the towel on 2018. We tried our best, right? I, for one, got nowhere near the bar I set in 2017, when I socked away a baffling 30 percent of my income. This year, however, I was not quite so thrifty. On the upside, I’m satisfied with where my money went: I took a long trip to South America last spring, donated to great political candidates last fall, and paid some annoying but necessary medical bills last summer. But still. I’d like to get back on the wagon, or at least more disciplined.

Where to start? I know all the things I’m supposed to do — be better about automating my savings, stick to a budget, etc. — but I’m not feeling particularly inspired or motivated. Many people take a rip-off-the-Band-Aid approach to January, but I’d rather ease my way in. Plus, that’s what research says you should do: Make small, manageable behavior changes rather than a punitive overhaul. So I asked a bunch of my favorite money experts — financial planners, psychologists, investment advisers — to send me their best, most painless advice for starting fresh in the new year, regardless of how your bank account currently looks. Here’s what they said.

1. Break up your habits, even just for a little while.

“If you normally put everything on a card, try going cash-only for a week to see how it affects your behavior,” says Amanda Clayman, an L.A.-based financial therapist. “Or, if you hate talking about money, challenge yourself to haggle down a price for something.” The point is to try something new in a playful, low-stakes way so that you can shake up your routine (or get out of your rut).

Personally, I’m toying with the idea of attempting the “envelope method”: instituting a weekly spending limit, and then dividing that amount — in cash — between envelopes labeled with the days of the week. If I want to spend more on any particular day, I have to “save up” cash from other days to cover it. I’ve already labeled the envelopes, which are sitting on my desk. Baby steps.

2. Make yourself an inspiration board — no, really.

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This sounds so cheesy, but that’s why I love it. Dr. Brad Klontz, the co-founder of the Financial Psychology Institute and a professor at the Creighton University Heider College of Business, recommends the following steps: 1) Identify three top financial goals; 2) Get some poster board, glue, scissors, and art supplies, and make a visual representation of those goals; 3) Put the poster someplace where you’ll see it every day, like your desk or your kitchen, and/or take a photo of it and make it the wallpaper on your phone. “Last year, we studied people in five different cities who did this, and their savings rates increased by 73 percent — no joke,” says Dr. Klontz.

And even if it doesn’t work, it does sound sort of fun, right?

3. Pair up with someone who’s equally interested in getting their act together.

I know, every annoying “How to Stick to Your New Year’s Resolutions” article always recommends a “buddy” to “hold you accountable.” The thing is, they’re right — especially when it comes to finances. You don’t need to enlist someone to check your bank statements and nag you about that shirt you just bought; instead, just finding a person to talk to helps destigmatize the subject more generally. And it works: According to a 2016 survey by LearnVest, 74 percent of respondents were more likely to stick to a financial resolution if they discussed it with others, says Alexa von Tobel, the CEO and founder of LearnVest and chief digital officer at Northwestern Mutual. Her recommendation: “Find a ‘money buddy’ who you’re around often — your partner, a family member, or a friend — and check-in with each other as you both move toward your goals.” Even better, find more than one. It takes a village, I say.

Also of note: You don’t need to partner up with someone who’s better with money than you. In fact, a recent study found that people with low financial skills tended to learn more and improve their money decisions if they sought advice from peers with similar levels of financial knowledge. This backs up my personal theory that it’s better to get financial advice from someone you can relate to (and is already in your life) rather than a whiz who’s ten steps ahead.

4. Think about who else might get your money someday, and put it on paper.

It’s Thursday. Do you know where your beneficiaries are? If you’re anything like most people, you probably aren’t sure. (A beneficiary is whoever receives your retirement savings and/or life insurance policies if you die.) It’s a morbid subject, yes, but don’t underestimate how on-top-of-it you’ll sound when you call up your brother and say, “Hey, just letting you know, I’ve put down your name as my secondary 401(K) beneficiary.” It’ll also make you feel generous, in a weird way, and remind you that your money management — good or bad — always affects your loved ones.

Best of all, this process takes about two minutes (or maybe a little more if you need to track down your login information — but look, you’ve been meaning to do that too). “I always remind my clients to take the time to make sure their provider has things set up how they want,” says Pari Hashemi, a Philadelphia-based financial adviser. “Too many people forget to update that information after they get divorced, have a child, or lose a family member” — and inadvertently leave their money to an ex-spouse or no one at all.

5. Cut out unnecessary clutter — extra credit cards, and subscriptions or memberships that you don’t use often.

“Close down any store credit cards and cut them up,” says Manisha Thakor, the VP of financial education at Brighton Jones. Yes, this may temporarily ding your credit score (closing a credit card does that, for counterintuitive reasons explained here), but it’s like cleaning out your closet — making a mess is part of the process. And the result will be worth it: “It’s best to keep your financial life simple,” explains Thakor. “Store cards in particular tend to have very high penalty interest rates if you’re the tiniest bit late on a payment. Don’t be enticed by the 10 percent off your purchases.” She recommends having one primary credit card and one as a backup — chop the rest. “Unless you are right about to buy a home or a car, it’s fine for your credit score to take a temporary dip while you clear your credit-card clutter,” she says.

While you’re at it, look at your other recurring charges — Hulu, magazines, the Tidal subscription you signed up for just to get Beyoncé’s new album — and do some weeding. You can even use online tools like Trim and ClarityMoney to ferret out “gray charges” (like those mentioned above, or that mysterious $2.99 that shows up on your bill every month for reasons you can’t remember) and help you get rid of them. There may be a cancellation fee, but like the credit-score penalty, it’s a temporary annoyance that’ll pay off in the future.

6. Do the “Three Things” exercise to become more aware of your spending habits.

Psychologist Sarah Asebedo, who is also the president of the Financial Therapy Association, recommends the following: “For at least one week, identify three good things that happen in your life every day. Write them down, along with how you felt about them and what led to them happening.” Research has shown that this exercise boosts your overall psychological health and decreases symptoms of depression (which we can always use in the dead of winter). Then, to layer on a financial component, Asebedo advises adding three good financial things to your list as well. “We often focus too much on the negative, especially with money. Recognizing the good things, even if they’re very small — like resisting an impulse buy — matters a lot for habit development over the long-run,” she says. The objective is to train yourself to pay more attention to links between spending money and your general well-being. Touchy-feely stuff, I know, but hey — it costs nothing to try.

• Source: https://www.thecut.com/2018/12/how-to-be-better-with-money-in-2019.html

The Spacing Effect: How to Improve Learning and Maximize Retention

Reading Time: 12 minutes

We are not taught how to learn in school, we are taught how to pass tests. The spacing effect is a far more effective way to learn and retain information that works with our brain instead of against it. Find out how to use it here.

“Every perception is to some degree an act of creation, and every act of memory is to some degree an act of imagination.”

— Gerald Edelman, Second Nature: Brain Science and Human Knowledge

The most important metaskill you can learn is how to learn. Learning allows you to adapt. As Darwin hinted, it’s not the strongest who survives. It’s the one who easily adapts to a changing environment. Learning how to learn is a part of a “work smarter, not harder” approach to life—one that probabilistically helps you avoid becoming irrelevant. Your time is precious, and you don’t want to waste it on something which will just be forgotten.

During the school years, most of us got used to spending hours at a time memorizing facts, equations, the names of the elements, French verbs, dates of key historical events. We found ourselves frantically cramming the night before a test. We probably read through our notes over and over, a gallon of coffee in hand, in the hope that the information would somehow lodge in our brains. Once the test was over, we doubtless forgot everything straight away.¹

Even outside of formal education, we have to learn large amounts of new information on a regular basis: foreign languages, technical terms, sale scripts, speeches, the names of coworkers. Learning through rote memorization is tedious and—more important—ineffective. If we want to remember something, we need to work with our brains, not against them. To do that, we need to understand cognitive constraints and find intelligent ways to get around them or use them to our advantage.

This is where the spacing effect comes in. It’s a wildly useful phenomenon: we are better able to recall information and concepts if we learn them in multiple, spread-out sessions. We can leverage this effect by using spaced repetition to slowly learn almost anything.

It works for words, numbers, images, and skills. It works for anyone of any age, from babies to elderly people. It works for animals, even species as simple as sea slugs. The effect cuts across disciplines and can be used to learn anything from artistic styles to mathematical equations.

Spaced repetition might not have the immediacy of cramming or the adrenaline rush of a manic all-nighter. But the information we learn from it can last a lifetime and tends to be effectively retained. In some ways, the spacing effect is a cognitive limitation, yet a useful one—if we are aware of it.

In Fluent Forever: How to Learn Any Language and Never Forget It, Gabriel Wyner writes:

Spaced repetition…[is] extraordinarily efficient. In a four-month period, practising for 30 minutes a day, you can expect to learn and retain 3600 flashcards with 90 to 95 percent accuracy. These flashcards can teach you an alphabet, vocabulary, grammar, and even pronunciation. And they can do it without becoming tedious because they’re always challenging enough to remain interesting and fun.

In Mindhacker, Ron and Marty Hale-Evans explore further:

Our memory is simultaneously magnificent and pathetic. It is capable of incredible feats, yet it never works quite like we wish it would. Ideally, we would be able to remember everything instantly, but we are not computers. We hack our memory with tools like memory palaces, but such techniques required effort and dedication. Most of us give up, and outsource our memory to smartphones, cloud enabled computers, or plain old pen and paper. There is a compromise…a learning technique called spaced repetition which efficiently organizes information or memorization and retention can be used to achieve near perfect recall.

“If you wish to forget anything on the spot, make a note that this thing is to be remembered.”

— Edgar Allan Poe, Marginalia

The Discovery of The Spacing Effect

Hermann Ebbinghaus (1850-1909), a German psychologist and pioneer of quantitative memory research, first identified the spacing effect. After earning his PhD in Germany, he traveled to London. Like so many people, he found his life forever changed by a book.

The work in question was Elements of Psychophysics by the pioneering experimental psychologist Gustav Fechner. Inspired by this book, Ebbinghaus began the research into memory that would consume his career and impact all of us.

Ebbinghaus took up his new field of study with the unbridled zest of a newcomer. He didn’t believe strongly in the prevailing understanding of memory at the time. In his wish to avoid getting bogged down in theory, he made everything about experimentation. As researcher and the sole subject of his experiments, he faced an uphill battle.

His most important findings were in the areas of forgetting and learning curves. These are graphical representations of the process of learning and forgetting. The forgetting curve shows how a memory of new information decays in the brain,² with the fastest drop occurring after 20 minutes and the curve leveling off after a day.

There is a way to slow down the process of forgetting. We need only to recall or revisit the information after we originally come across it. Going over the information later, at intervals, helps us remember a greater percentage of the material. Persistence will allow us to recall with 100% accuracy all that we want to remember.

The learning curve is the inverse. It illustrates the rate at which we learn new information.

When we use spaced repetition, the forgetting curve changes:

Frequency matters. Under normal conditions, frequent repetitions aid memory. We know this intuitively. Just try to memorize this article on a single repetition. However much attention, focus, or individual ability you have, it won’t work.

Memory mastery comes from repeated exposure to the material. Ebbinghaus observes, “Left to itself every mental content gradually loses its capacity for being revived, or at least suffers loss in this regard under the influence of time.” Cramming is not an effective memorization strategy. Lacking the robustness developed in later sessions, crammed facts soon vanish. Even something as important and frequently used as language can decay if not put into use.

There are other ways to improve memory. Intensity of emotion matters, as does the intensity of attention. Ebbinghaus notes in his definitive work on the subject, Memory and Forgetting:

Very great is the dependence of retention and reproduction upon the intensity of the attention and interest which were attached to the mental states the first time they were present. The burnt child shuns the fire, and the dog which has been beaten runs from the whip, after a single vivid experience. People in whom we are interested we may see daily and yet not be able to recall the colour of their hair or of their eyes…Our information comes almost exclusively from the observation of extreme and especially striking cases.

Ebbinghaus also uncovered something extraordinary: even when we appear to have forgotten information, a certain quantity is stored in our subconscious minds. He referred to these memories as savings. While they cannot be consciously retrieved, they speed up the process of relearning the same information later on.

A poem is learned by heart and then not again repeated. We will suppose that after a half year it has been forgotten: no effort of recollection is able to call it back again into consciousness. At best only isolated fragments return. Suppose that the poem is again learned by heart. It then becomes evident that, although to all appearances totally forgotten, it still in a certain sense exists and in a way to be effective. The second learning requires noticeably less time or a noticeably smaller number of repetitions than the first. It also requires less time or repetitions than would now be necessary to learn a similar poem of the same length.

As the first researcher to undertake serious experimentation on memory and why we forget, Ebbinghaus transformed psychology as a new branch of science. His impact has been compared to that of Aristotle. Ongoing research into the spacing effect continues to support Ebbinghaus’s findings.

“There is no such thing as memorizing. We can think, we can repeat, we can recall and we can imagine, but we aren’t built to memorize. Rather our brains are designed to think and automatically hold onto what’s important. While running away from our friendly neighborhood tiger, we don’t think “You need to remember this! Tigers are bad! Don’t forget! They’re bad!” We simply run away, and our brain remembers for us.”

— Gabriel Wyner, Fluent Forever: How to Learn Any Language and Never Forget It

How the Spacing Effect Works

Let’s take a quick refresher on what we know about how memory in works, because it’s not what we think.

Memories are not located in any one part of the brain. Memories are formed in a process which involves the entire brain. If you think about your favorite book, different parts of your brain will have encoded the look of it, the storyline, the emotions it made you feel, the smell of the pages, and so on. Memories are constructed from disparate components which create a logical whole. As you think about that book, a web of neural patterns pieces together a previously encoded image. Our brains are not like computers – we can’t just ‘tell’ ourselves to remember something.

In Mastery, Robert Greene explains:

In the end, an entire network of neurons is developed to remember this single task, which accounts for the fact we can still ride a bicycle years after we first learned how to do so. If we were to take a look at the frontal cortex of those who have mastered something through repetition, it would be remarkable still and inactive as they performed the skill. All their brain activity is occurring in areas that are lower down and required much less conscious control…People who do not practice and learn new skills can never gain a proper sense of proportion or self-criticism. They think they can achieve anything without effort and have little contact with reality. Trying something over and over again grounds you in reality, making you deeply aware of your inadequacies and of what you can accomplish with more work and effort.

No definitive answer has been found to explain how the spacing effect works. However, a number of factors are believed to help:

Forgetting and learning are, in a counterintuitive twist, linked. When we review close to the point of nearly forgetting, our brains reinforce the memory as well as add new details. This is one reason practice papers and teaching other people are the most effective ways for students to revise—they highlight what has been forgotten.

Retrieving memories changes the way they are later encoded. In essence, the harder something is to remember now, the better we will recall it in the future. The more we strain, which is painful mental labor, the easier it will be in the future. There is no learning without pain. Recall is more important than recognition. This explains why practice tests are a better way to learn than opening your text and re-reading your highlights.

Our brains assign greater importance to repeated information. This makes sense; information we encounter on a regular basis does tend to be more important than that which we only come across once. Disregarding any forms of mental impairment, we don’t have trouble recalling the information we need on a daily basis. Our PIN, our own telephone number, the directions to work, and names of coworkers, for example. We might once have struggled to remember them, but after accessing those sorts of information hundreds or thousands of time, recall becomes effortless.

Some researchers also believe that semantic priming is a factor. This refers to the associations we form between words which make them easier to recall. So, the sentence ‘the doctor and the nurse walked through the hospital’ is easier to remember than ‘the doctor and the artist walked through the supermarket’ because the words ‘doctor’ ‘nurse’ and ‘hospital’ are linked. If you are asked to remember a logical sentence such as ‘mitochondria is the powerhouse of the cell’, it’s not too difficult. If those same words are scrambled and become ‘cell the house mitochondria power is of’ it’s a lot harder to remember. And if those words are broken up into nonsensical syllables – ‘th ell ce he ous hon mit odria fi of’ – retaining them would become arduous. But some researchers have theorised that repetition over time primes us to connect information. So, if you revised ‘th ell ce he ous hon mit odria fi of’ enough times, you would start to connect ‘th’ and ‘ell.’ We can demonstrate semantic priming by telling a friend to say ‘silk’ ten times, then asking them what a cow drinks. They will almost certainly say ‘milk.’ The answer is, of course, water.

Yet another theory is that of deficient processing. Some literature points to the possibility that spaced repetition is not in itself especially efficient, but that massed learning is just very inefficient. By comparison, spaced repetition seems special when it is, in fact, a reflection of our true capabilities. Researchers posit that massed learning is redundant because we lose interest as we study information and retain less and less over time. Closely spaced repetition sessions leverage our initial interest before our focus wanes.

With properly spaced repetition, you increase the intervals of time between learning attempts. Each learning attempt reinforces the neural connections. For example, we learn a list better if we repeatedly study it over a period of time than if we tackle it in one single burst. We’re actually more efficient this way. Spaced sessions allow us to invest less total time to memorize than one single session, whereas we might get bored while going over the same material again and again in a single session. Of course, when we’re bored we pay less and less attention.³

In Focused Determination, the authors explain why variety also contributes to deficient processing.

There is also minimal variation in the way the material is presented to the brain when it is repeatedly visited over a short time. This tends to decrease our learning. In contrast, when repetition learning takes place over a longer period, it is more likely that the materials are presented differently. We have to retrieve the previously learned information from memory and hence reinforce it. All of this leads us to become more interested in the content and therefore more receptive to learning it.

“How do you remember better? Repeated exposure to information in specifically timed intervals provides the most powerful way to fix memory into the brain. …Deliberately re-expose yourself to the information more elaborately, and in fixed, spaced intervals, if you want the retrieval to be the most vivid it can be. Learning occurs best when new information is incorporated gradually into the memory store rather than when it is jammed in all at once.”

— John Medina, Brain Rules

Taking Advantage of the Spacing Effect

We don’t learn about spaced repetition in school—something which baffles many researchers. Most classes teach a single topic per session, then don’t repeat it until the test.

Going over a topic once teaches very little—sometimes nothing at all, if the teacher is unengaging or the class is too long. Most teachers expect their students to take care of the memorizing part themselves. As a result, many of us develop bad learning habits like cramming to cope with the demands of our classes.

We need to break up with cramming and focus on what actually works: spaced repetition.

The difficulty of spaced repetition is not effort but that it requires forward planning and a small investment of time to set up a system. But in the long run, it saves us time as we retain information and spend less total time learning.

A typical spaced repetition system includes these key components:

• A schedule for review of information. Typical systems involve going over information after an hour, then a day, then every other day, then weekly, then fortnightly, then monthly, then every six months, then yearly. Guess correctly and the information moves to the next level and is reviewed less often. Guess incorrectly and it moves down a level and is reviewed more often.
• A means of storing and organizing information. Flashcards or spaced repetition software (such as Anki and SuperMemo) are the most common options. Software has the obvious advantage of requiring little effort to maintain, and of having an inbuilt repetition schedule. Anecdotal evidence suggests that writing information out on flashcards contributes to the learning process.
• A metric for tracking progress. Spaced repetition systems work best if they include built-in positive reinforcement. This is why learning programs like Duolingo and Memrise incorporate a points system, daily goals, leaderboards and so on. Tracking progress gives us a sense of progression and improvement.
• A set duration for review sessions. If we practice for too long, our attention wanes and we retain decreasing amounts of information. Likewise, a session needs to be long enough to ensure focused immersion. A typical recommendation is no more than 30 minutes, with a break before any other review sessions.

The spacing effect is a perfect example of how much more effective we can be if we understand how our minds work, and use them in an optimal way. All you need to learn something for life are flashcards and a schedule. Then, of course, you’re free to move on to actually applying and using what you’ve learned. Tagged: Gabriel Wyner, Gustav Fechner, Hermann Ebbinghaus, Memory, Robert Greene

Footnotes

• 1 When is the last time you used a2+ b2= c2 in real life?
• 2 This is different than the half-life of knowledge, the process by which information in memory becomes less valuable because your understanding of the world has changed.
• 3 You can test this by asking yourself what your last meeting yesterday was about.

Source: https://fs.blog/2018/12/spacing-effect/