Behavioral Economics and a Flex Account for Your House

Citiography

I recently got a wisdom tooth removed. My dentist had been nagging me to do it for years. Why the delay? I don’t have dentophobia. I’m not an anti-dentite. I just didn’t want to save the money (or spend it). But for the grace of my flex account, I was able to squirrel away nearly $700 (tax free, no less), and pop that tooth out.

My flex account automatically takes money out of my paycheck and saves it for medical expenses. It’s an example of behavioral economics. Traditional economics assumes people make rational decisions; behavioral economics assumes we’re human. And flawed. And irrational. And it creates systems to correct for these weaknesses. Instead of assuming that I’m a rational person who knows I need to pay the dentist and will save money to do so, behavioral economics knows that I’m much more likely to save money…

View original post 123 more words

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s