Many Americans feel like they’re constantly making the wrong money decisions; spending too much, saving too little, or falling behind, no matter how hard they try.
But experts say the problem isn’t just a lack of financial knowledge. It’s also how our brains are wired.
In the latest episode of the In Your Corner podcast from CBS News Philadelphia, consumer reporter Josh Sidorowicz speaks with Dr. Wendy De La Rosa, an assistant professor at the Wharton School at the University of Pennsylvania and a nationally recognized expert in financial literacy, about the behavioral side of money and why knowing what to do doesn’t always lead to action.
Knowledge isn’t enough
“I always try to move us away from financial education programs,” De La Rosa said, “which are helpful to financial action.”
Her research finds financial education is critical, but it is only part of the picture. Helping people translate knowledge into action is just as important.
That gap between knowledge and action is often driven by human behavior.
“We tend to be very optimistic about our future selves,” De La Rosa said. “In the future, we’re going to save more for retirement. In the future, we’re going to call our mothers more, forgetting that your future self is the same imperfect person as your present self.”
Why timing matters
One solution: committing ahead of time.
Instead of waiting until money hits your account, when temptation is strongest, De La Rosa recommends making decisions before big moments, like tax refunds or months with extra paychecks.
In one study she helped conduct, people were asked early in the tax season what percentage of a potential refund they wanted to save. When the refund eventually arrived, that amount was automatically moved to savings.
The result: people saved twice as much as those asked to decide after the money arrived.
“Otherwise, we allow the temptation on spending to hit,” De La Rosa said.
Automation over willpower
That same idea applies to everyday finances.
Automating savings or debt payments, similar to how retirement contributions come out of a paycheck before you ever see the money, removes emotion from the process, she said.
De La Rosa says changing your environment is often more effective than trying to change yourself.
“It’s about recognizing the biases you have and turning them forward to work for you instead of against you,” she said.
Breaking the silence around money
The conversation also touches on another major barrier: shame.
Many people avoid talking about money altogether, even with partners or close friends, which can make problems worse.
De La Rosa argues that removing morality and judgment from money decisions allows people to make clearer, healthier choices.
Talking about money more openly, she says, can actually reduce anxiety and make action feel more possible.
You can watch the full interview and get more guidance on the In Your Corner podcast. The In Your Corner podcast is dedicated to providing practical solutions to everyday problems.
Each week will feature a different guest expert. You can find new episodes posted every Wednesday on the CBS Philadelphia YouTube channel.
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