Why Nice People Struggle with Money, with Dr. Sandra Matz, Professor at Columbia Business School

#628: You follow all the right personal finance advice. You know you should save more, invest regularly, and build an emergency fund.

So why does it feel so much harder for some people than others?

The answer lies in your personality.

Dr. Sandra Matz, a professor at Columbia Business School, studies the intersection of psychology and money management. She joins us to explain why one-size-fits-all financial advice often fails.

Her research found that agreeable people — those who are caring, empathetic, and put others first — have a harder time saving money.

The solution isn't better budgeting apps or stricter rules. It's reframing financial goals to match your personality type.

For example, agreeable people save more effectively when they view their emergency fund as protection for loved ones or a way to help others during tough times.

By contrast, competitive personalities respond better to framing savings as getting ahead in life.

This personalized approach extends beyond personality assessments. Algorithms can now predict your financial behavior using digital footprints — social media activity, spending patterns, even smartphone usage. With just 300 Facebook likes, artificial intelligence understands your money habits better than your spouse does.

The conversation also covers the darker implications. Companies exploit these same psychological insights to manipulate spending decisions. Dr. Matz discusses data cooperatives as a solution — member-owned entities where people collectively benefit from their shared information.

We dive into negotiation strategies for salary increases, breaking out of financial echo chambers, and using AI to optimize your money management without losing your decision-making autonomy.

Resources Mentioned:

Dr. Matz's book "Mind Masters"

sandramatz.com

Timestamps:

Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. The provided timestamps are approximate and may be several minutes off due to changing ad lengths.

(0:00) Big data meets financial psychology

(3:34) Psychology and computer science intersection

(6:26) Algorithms vs spouses at predicting personality

(7:21) Curly fries predict intelligence

(9:01) Self-talk reveals emotional distress

(11:04) Nice people struggle with money

(14:03) Personality-based savings strategies

(22:21) Privacy versus convenience tradeoffs

(24:36) Data privacy management burden

(26:28) Organ donation defaults

(30:40) Data cooperatives concept

(36:01) ChatGPT for financial advice

(40:04) AI as unlimited intern

(44:06) Breaking financial echo chambers

(53:14) AI negotiation training

For more information, visit the show notes at https://affordanything.com/episode628 Learn more about your ad choices. Visit podcastchoices.com/adchoices