Why Nice People Struggle with Money, with Dr. Sandra Matz, Professor at Columbia Business School

Afford Anything

Paula Pant | Cumulus Podcast Network

Entrepreneurship, Business, Investing

4.6 • 3.4K Ratings

🗓️ 25 July 2025

⏱️ 72 minutes

🔗️ Recording | iTunes | RSS

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Summary

#628: You follow all the right personal finance advice. You know you should save more, invest regularly, and build an emergency fund. So why does it feel so much harder for some people than others? The answer lies in your personality. Dr. Sandra Matz, a professor at Columbia Business School, studies the intersection of psychology and money management. She joins us to explain why one-size-fits-all financial advice often fails. Her research found that agreeable people — those who are caring, empathetic, and put others first — have a harder time saving money. The solution isn't better budgeting apps or stricter rules. It's reframing financial goals to match your personality type. For example, agreeable people save more effectively when they view their emergency fund as protection for loved ones or a way to help others during tough times. By contrast, competitive personalities respond better to framing savings as getting ahead in life. This personalized approach extends beyond personality assessments. Algorithms can now predict your financial behavior using digital footprints — social media activity, spending patterns, even smartphone usage. With just 300 Facebook likes, artificial intelligence understands your money habits better than your spouse does. The conversation also covers the darker implications. Companies exploit these same psychological insights to manipulate spending decisions. Dr. Matz discusses data cooperatives as a solution — member-owned entities where people collectively benefit from their shared information. We dive into negotiation strategies for salary increases, breaking out of financial echo chambers, and using AI to optimize your money management without losing your decision-making autonomy. Resources Mentioned: Dr. Matz's book "Mind Masters" sandramatz.com Timestamps: Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. The provided timestamps are approximate and may be several minutes off due to changing ad lengths. (0:00) Big data meets financial psychology (3:34) Psychology and computer science intersection (6:26) Algorithms vs spouses at predicting personality (7:21) Curly fries predict intelligence (9:01) Self-talk reveals emotional distress (11:04) Nice people struggle with money (14:03) Personality-based savings strategies (22:21) Privacy versus convenience tradeoffs (24:36) Data privacy management burden (26:28) Organ donation defaults (30:40) Data cooperatives concept (36:01) ChatGPT for financial advice (40:04) AI as unlimited intern (44:06) Breaking financial echo chambers (53:14) AI negotiation training Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0	We live in a world in which algorithms know more about us than our own families, and while that
0:04.7	couldn't be terrifying, it also gives us the opportunity to learn how to harness big data to make
0:10.6	better financial choices. Today, we're joined by Dr. Sandra Mats, a business professor at
0:15.9	Columbia Business School, who serves as the director for the Center of Advanced Technology and Human
0:20.5	Performance. Her research blends psychology with computer science. She's who serves as the director for the center of advanced technology and human performance.
0:21.6	Her research blends psychology with computer science.
0:24.8	She studies both human behavior and big data in terms of how we can bridge that gap between
0:30.5	intention and action.
0:33.0	Welcome to the Afford Anything podcast, the show that understands you can afford anything
0:36.6	but not everything.
0:38.2	Every choice carries a tradeoff. This show covers five pillars, financial psychology, increasing your income, investing, real estate and entrepreneurship. It's double eye fire.
0:47.8	Today's episode covers the letter F, financial psychology. Welcome, Dr. Mats. Thank you so much for having me. Thank you for being here.
0:56.1	You know, we hear a lot in the news about big data, and it sounds like a crazy concept, but a little bit removed from our day-to-day lives if we're not in a relevant industry.
1:06.9	Big data and some of the ideas that come from it can actually be applicable to each of us as individuals
1:12.3	when we're trying to save more money, work out more, sleep better, have healthier and wealthier lives.
1:19.8	How is that? Yeah, it all comes back to this idea that there's someone who is generating all of
1:25.4	this data that we can look at. It's a person who might post something about their lives on social media,
1:31.0	who swipes their credit card to buy a certain product,
1:34.1	who in a way just carries around their smartphone with them 24-7,
1:37.3	leaving all of these traces about where they go, who they meet.
1:41.5	The beauty of big data is really trying to understand who's the person behind them.
1:46.0	What are some of their preferences, their routines, their needs, their motivations.
	...

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