In this episode, we are joined by renowned expert Abby Sussman to unpack how individuals form judgments and make decisions about their finances. Abby is a distinguished professor of marketing at the University of Chicago Booth School of Business whose expertise lies at the intersection of psychology, economics, and finance. In our conversation, we discuss the nuances of financial decision-making and how personal beliefs influence our financial choices. Discover the source of reference points for financial well-being and how expense prediction biases play a role in making poor financial decisions. We explore the effectiveness of budgeting, the nuances of product sensitivity, and the drivers of excessive consumer consumption. Gain insights into navigating the complexities of financial decision-making, the psychology behind it, how AI can help you make better financial decisions, and much more. Tune in to gain a deeper understanding of the psychology behind financial decisions and uncover strategies to optimize your financial future with Abby Sussman!   Key Points From This Episode:   (0:04:45) Explore the difference in how we perceive others' wealth versus our own. (0:08:25) Drivers of the differences in perception and their impact on financial decision-making. (0:11:43) Steps to reduce excessive consumption and how personal future wealth perceptions influence financial decision-making. (0:16:58) Discover the source of the reference point people use when considering their wealth. (0:18:53) How to make better financial decisions and the role of peoples’ expectations. (0:20:20) Unpack expense prediction bias and the problems it creates. (0:22:55) Methods used to predict expenses and what people typically budget for. (0:29:00) Pragmatic advice for reducing the influence of expense prediction bias. (0:31:53) Whether prediction bias manifests in long-term planning, such as retirement. (0:33:14) Find out if setting a budget is common practice and how it impacts financial health. (0:37:36) Trends in actual spending in relation to expenses budgeted for. (0:39:31) She explains how people categorize expenses and react to insufficient funds. (0:42:40) Product sensitivity and how attitudes toward investment products vary. (0:48:21) Interventions to help people choose better financial products. (0:49:40) Areas of research she is most interested in and her opinion on the role of AI. (0:55:54) Abby shares her definition of success.   Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/  Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on X — https://twitter.com/RationalRemind Rational Reminder on YouTube — https://www.youtube.com/channel/ Rational Reminder Email — info@rationalreminder.ca Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/  Benjamin on X — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/ Cameron on X — https://twitter.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/ Abby Sussman on LinkedIn — https://www.linkedin.com/in/abigail-sussman-ab4427/ Abby Sussman on X — https://twitter.com/abbysussman The University of Chicago Booth School of Business — https://www.chicagobooth.edu/ Society for Judgment and Decision Making — https://sjdm.org/ Episode 153: Prof. Johanna Peetz — https://rationalreminder.ca/podcast/153 Epidose 296: Adam Alter — https://rationalreminder.ca/podcast/296 Panel Study of Income Dynamics — https://psidonline.isr.umich.edu/ Consumer Financial Protection Bureau — https://www.consumerfinance.gov/   Papers From Today’s Episode:    ‘Understanding and Neutralizing the Expense Prediction Bias: The Role of Accessibility, Typicality, and Skewness’ — https://