Free money guidance & Simonne's view on the CFEB

Last November saw the formation of the new Consumer Financial Education Body (CFEB). Independent of the Financial Services Authority (FSA), the remit of the CFEB is to focus on meeting consumer’s needs and be less bound up in regulation.

The FSA did a great job in starting to boost people's financially literacy and capability. Now it's up to the CFEB to keep this up and to roll out the Moneymadeclear money guidance service nationally. The challenge is to transform us into a nation of financially-savvy people who save for their future. Quite a tall order!

At CFEB’s conference recently I (Simonne) was impressed by the measures they've taken so far to improve people’s understanding of financial matters. It felt good to participate in talks and discussions that will help shape further developments to engage people in money matters.

While the financial services industry expect people to act rationally, at Sheconomics by default we assume most people don’t. Complex emotions often hijack rationality and people don’t always behave in the way that economists or experts would have us believe we should. A big thumbs up to the CFEB for recognising this too and for commissioning a report ‘Transforming Financial Behaviour’ which explores ways in which people can make better choices. 

Visit CFEB's site to find out more. And you can download information on ‘Transforming Financial Behaviour’ from the following links: Read summary | Read full report  

by Simonne Gnessen

Do do-gooders think they deserve more?

At the end of a productive working day do you feel you’re entitled to a treat?

In your mind, does a week of healthy eating cancel out a weekend bingeing on pizza and pinot grigio?

Scientists in the US have shown that the more virtuous we think we have been, the more we feel we've earned a blow-out.

Smug greens who install energy-saving products consume more. Owners of low energy washers do their laundry more often. And people leave energy-efficient light bulbs on longer than ordinary ones. Even people who are asked to imagine themselves committing a virtuous act are more likely to feel afterwards they deserved a pair of designer jeans. What's it all about?

Moral licensing, that's what. It's a challenge for sustainability advocates and a boon for luxury retailers. People who feel they’ve been ‘good’ will splash out without even thinking about where the urge came from. After all, it’s hard to argue with the part of your consciousness that says, “Go on, you deserve it.”

I must confess to wondering whether this means people who work in virtuous jobs, e.g. charities, get overwhelmed by moral licensing. Do they constantly feel, wow I’m so good I really must go out and treat myself (just as soon as I’ve finished organising the supply to fresh water to this third world village community)? I guess not, because surely faced daily with people who had nothing would dampen your enthusiasm for designer goods? . So what about other virtuous people? Priests? Nuns? Vegans? Are they secret shoppers? I’d love to know what you think about this.

Does it matter which hand you pay with?

Last week Simonne and I were fortunate enough to hear Paul Lewis of Radio 4’s Moneybox Live speak at the Financial Services Research Forum. As well as being well-informed and an engaging spekaer as you’d expect, he also had this good tip on debt.

It was that the debt shouldn’t last longer than what you’re buying.

So if you go into debt to cover Christmas, it should be paid off within 12 months. Borrow for a holiday and make sure you’ve cleared the debt before the next trip away. Go into debt for a pair of shoes but only for as long as they’re in fashion. This would be, he joked, about two weeks. We have to take issue with him there!

My own talk to the forum was about left and right brain processes. Afterwards Paul passed on to me a delightful little Do Something Different tip that he said he came up with years ago. It’s this.

Pay with the opposite hand.

Not only will this feel different, it might affect your conscious experience in another way. The right hand connects to the left brain hemisphere and the left hand to the right. Since the left is more logical/thinking and the right more intuitive/feeling, will this make a difference? Who knows, but it’s worth a try. 

Also scientists have shown that generally people associate the right side with positive concepts, life and all things good and the left with negativity and death. But in left-handers it's the opposite, which suggests it's not a cultural norm but a personal one. 


So left-handers are an interesting example of conceptual associations resulting from sensory-motor experience. According to this theory, left and right handers should feel less positive when paying with the opposite hand.

If you try it, let us know how it felt. Just don’t drop those sale shoes while trying to get out your credit card with the wrong hand. Some quick right hander could have them away before you can say 'short fashion fix'!

Have you read the results of our survey on asking for money at www.sheconomics.com?
More than eight out of ten women don't like asking for money. Even more say they find it embarrassing. 
Perhaps the picture above captures their deepest fears? 
Many female-led businesses are underfunded at start-up, women are less likely to seek angels funding and when they do they ask for significantly less than men. 
Our website also has tips on how to ask for money - it's really no laughing matter!

It's good to talk sheconomics

I loved talking to the Trustees’ Council of Penn Women in the luxurious setting of the RAC Club (not a fluorescent jacket in sight) on Pall Mall last night. Those RAC people are amazing, they can not only fix your car but also serve up some damn good crudites ….

The TCPW are a feisty bunch of bright, high achieving women of all ages and I learned a lot from their comments and questions during our lively session.

We had fun with some of the behaviour economics problems from Sheconomics. To a woman they got the intuitive reasoning problem right (three out of four women usually get it wrong) but they did let their emotions intrude on the ultimatum game. OK, shows they place high value on fairness and social co-operation so it came as no surprise to learn that many work in philanthropic or fund-raising roles.

On the subject of females asking for money, one woman said she can shamelessly extract millions of pounds from others for her cause, but can’t ask for a pay rise for herself. That captures the tendency of the female money psyche to put the needs of others first. It’s what makes us loyal friends and caring individuals, but if we’re not careful it could make us poor too.