Personalized Finance Tools

One of the most important contributions of behavioral economics is that it offers people a new way to think about their choices. We now have a language to describe our biases, mental shortcuts and behavioral tendencies, whether it’s a strong dislike of losses or a preference for rewards that arrive right away.

However, one of the fundamental limitations of this research is that it often doesn’t account for individual differences. Take loss aversion. While on average, we feel losses about 2.5 times stronger than gains, this population summary conceals a large amount of individual variation. The same principle applies to a variety of behavioral principles, from present bias to the illusion of wealth. The simple truth is that people are different, and that we cannot make smart financial decisions without understanding these differences.

That’s why I’ve developed a collection of digital tools capable of measuring our individual preferences and tendencies across a range of behavioral traits. How you score on these measures has implications for nearly every aspect of your financial life, from setting an appropriate savings rate to the tailoring of retirement income. Below is a list of our current tests, along with access to the Loss Aversion Calculator.

The Loss Aversion Calculator: assesses the degree of risk you can cope with in your investment portfolio.
Launch Tool
The Chocolate Test: sets a retirement drawdown plan that will maximize your happiness.
The Behavioral Stress Test: calibrates the lifestyle that would keep you satisfied in retirement.
The Social Panic Test: estimates how vulnerable you are to a social media induced financial panic, in which you are likely to buy high and sell low.
The Present Bias Test: identifies your risk of retiring too early and regretting the timing of your retirement.
The Positivity Bias Test: determines how likely you are to forget your past investment losses, and thus take excessive risk in the future.
The Myopic Loss Aversion Test: identifies your sensitivity to short-term losses, which can lead to costly investment mistakes in the long-run.
The Charity Test: reveals whether you are giving away too little of your money, and whether your generosity is being allocated in the most effective way.
The Narrow Framing Test: can determine if you are likely to make serious errors involving risk, and whether you might benefit from account aggregation tools.
The Self Continuity Test: captures your connection to your future self, which can strongly influence a variety of financial decisions, including savings rates and whether or not you are depriving yourself from a nice bottle of wine.