Willpower, Poverty and Savings

Examining decision-making is a critical aspect of the work that we do here in the Asset Building Program. How do people make decisions? How can we best set up systems that put people in position to succeed? Our understanding of those processes has come a long way in recent years, but there are still miles to go. Our colleague Jamie Holmes has a provocative and thoughtful piece up at The New Republic today, "Why Can't More Poor People Escape Poverty?" that takes a look at the emerging understanding of our own decision-making processes and how the choices we are all forced to make, and the way we make them, can have greater impacts on the poor.

"...any decision that requires tradeoffs seems to deplete our ability to muster willpower for future decisions. Tradeoff decisions, like choosing between more money and more leisure time, require the same conflict resolution as self-control decisions (although our impulses appear to play a smaller role). In both cases, willpower can be understood as the capacity to resolve conflicts among choices as rationally as possible, and to make the best decision in light of one’s personal goals. And, in both cases, willpower seems to be a depletable resource."
 

This idea ties in directly to financial decision making, including choices about whether and how to save. It's a fascinating read, you should check out the whole thing.