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Debt Bloggers in Dan Ariely’s Predictably Irrational

If you’re a fan of behavioral economics (think Freakonomics [3] and Undercover Economist [4]), you should pick up a copy of Predictably Irrational by Dan Ariely [3]. I reserved both the print and audio book versions (I didn’t know which would be available first) and have been listening to the CDs in my car as I drive around.

I was delighted to hear, somewhere on the third CD, and then confirm in print, on page 122-123; Ariely mentioned a New York Times article written by John Leland that featured several debt bloggers I know: Tricia of BloggingAwayDebt.com [5], Stephanie of PoorerThanYou.com [6], Him and Her of MakeLoveNotDebt.com [7], and a blog called We’re in Debt (I thought I recognized the URL but it resolved to a landing page – oops).

Here’s what the passage said, it was in reference to how you could force yourself to save and control destructive consumer spending behavior:

John Leland wrote a very interesting article in the New York Times in which he described a growing trend of self-shame: “When a woman who calls herself Tricia discovered last week that she owed $22,302 on her credit cards, she could not wait to spread the news. Tricia, 29, does not talk to her family or friends about her finances, and says she is ashamed of her personal debt. Yet from the laundry room of her hom in northern Michigan, Tricia does something that would have been unthinkable — and impossible — a generation ago: She goes online and posts intimate details of her financial life, including her net worth (now a negative $38,691), the balance and finance charges on her credit cards, and the amount of debt she has paid down ($15,312) since starting the blog about her debt last year.”

It is also clear that Tricia’s blog is part of a larger trend. Apparently there are dozens of Web sites (maybe there are thousands by now) devoted to the same kind of debt blogging (from “Poorer than You” poorerthanyou.com and “We’re in Debt” wereindebt.com to “Make Love Not Debt” makelovenotdebt.com and Tricial’s Web page: bloggingawaydebt). Leland noted, “Consumers are asking others to help themselves develop self-control because so many companies are not showing any restraint.”

BLogging about overspending is important and useful, but as we saw in the last chapter, on emotions, what we truly need is a method to curb our consumption at the moment of temptation, rather than a way to complain about it after the fact.

The book is very very good and provides great insight into how predictably irrational we are.