The "Scarcity Trap" and personal finances

[hybrid]

Heard this great piece on NPR this morning talking about how people experiencing scarcity of money or time end up making poor choices.

http://www.npr.org/2014/01/02/259082836/how-scarcity-mentaly-affects-our-thinking-behavior

As I was listening to this I remember thinking of so many threads I've read discussing why poor people make poor financial choices and I thought a lot of this hit home.  And I also thought about how a lot of people who aren't poor also make a lot of poor (but not as obviously poor, as their incomes mask the error) financial choices because they are constantly rushed (like eating out constantly, and poorly, because they lack the time to cook at home).

Worth a listen.  If you have the time, that is.... ;-)

[the fixer]

That's really interesting! It's like the professor is taking payday time loans.

I don't agree with the conclusions, though, such as giving poor people a grace period to pay a bill before slapping a fee on them. Why wouldn't they just put it off until the day they know they get hit with the fee? If you tried to fix this by making the fee occur by random chance, that would be even worse because people overestimate their performance at games of chance.

At the individual level the implications are clear: never let yourself feel low on money or on time. As a society the best prescription is education, for both time and money management.