Thanks for my friend Dan Mennel for pointing this podcast out to me (Hidden Brain: Tunnel Vision, Episode 65, 36:34)

What I like about this podcast:

The first fifteen minutes of the podcast deal with the issue of money scarcity and describe how our brains are wired to handle it and how our responses often meet short-term needs at the expense of our long-term goals.

From Hidden Brain website: When you’re hungry, it can be hard to think of anything other than food. When you’re desperately poor, you may constantly worry about making ends meet. When you’re lonely, you might obsess about making friends. This week on Hidden Brain, we explore the psychological phenomenon of scarcity and how it can affect our ability to see the big picture and cope with problems in our lives.

• Timeline:
  • 0-7:00: How scarcity trap impacts those living in poverty
    • What happened to Brandy that led to her downward spiral?
    • What did Brandy do when she got her credit card in the mail? What did she buy?
    • What did she forget about during this time of turmoil?
    • How did she deal with her credit card bill?
    • What options did she have when it came to money?
    • Why led to Brandy making the mistakes?
  • 7:00-15:00: How the scarcity trap impacts the way we think
    • What did the World War II study on starvation teach researchers about scarcity?
    • What did the lack of food do to the mind of the study participants?
    • What is the theory that the Harvard researchers wanted to explore?
    • How do poor people often behave like those that were starved during the WWII study?
    • Why does “tunneling in” make sense from an evolutionary perspective? How would this have been useful for a hunter-gatherer?
    • How does scarcity impact our bandwidth?
    • What do people in the “poverty tunnel” do well?

Continue listening to the podcast to learn about ways that we can try and short-circuit the “scarcity trap.” 

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Interested in learning more about behavioral economics? Check out our video library for several videos in this category. Here’s one that will lead to an interesting student discussion: Why We Crave What’s Cool. 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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