Sex, Drugs, and Finance

April is “National Financial Literacy Month”.

The field of “finance” contains many facets, most of which are either super boring, or overwhelmingly complicated. My personal hunch is that this is no accident. (Insert tangent about big-banking and consumerism here.)


Rather than discussing personal finance, or habits to help with it — I’d like to reflect on three common themes that have emerged in sifting through hundreds, if not thousands, of personal financial articles, blogs, posts, tik-toks, etc.


1. The financial coaching community is vast and growing.

Benefit: It’s great that anyone is able to find comfort within a niche community.

Drawback: It can be difficult to find a community to call home with so many options.


2. Financial strategies can vary.

Benefit: There are lots of approaches to personal finance, not all coaches run the same playbook.

Drawback: It can be difficult to identify expertise, which leads to indecision.

3. Money can be tricky to talk about.

Benefit: The best communities bring comfort to taboo topics – like income, spending, and debt.

Drawback: This trust can be difficult to develop.


Theory Application

To take a deeper look at each of these findings, and make better sense of the landscape — let’s take a peek under the hood of three psychology theories and consider how they can reflect onto our everyday lives without our noticing.


1. Choice Overload - Analysis Paralysis, or the Paradox of Choice.

These are terms that describe findings from research that demonstrate how people struggle to make decisions when presented with multiple options. Indecision is a big problem in finance – one that grows with each passing day as more information becomes available.


2. Optimal Arousal - Pressure and Performance, Boredom vs. Stress

From ResearchGate

The Yerkes-Dodson Law states that our best performance occurs in a sweet spot between stress and boredom. This relationship is empirically demonstrable, and lends some insight into how choice overload can happen.




3. The Learning Curve - Unskilled and Unaware, Beginners Luck

The Dunning-Kruger effect describes overconfidence in a field that is not entirely understood. This phenomena feeds into ‘exponential growth bias’, which is associated with undesirable financial outcomes.


From LinkedIn

Language Selection

Back to “National Financial Literacy Awareness Month.” Let’s take a look at three language choices that can be found in financial coaching content and consider the messages they send.


  1. “Layman's Terms” A 16th century idiom meaning “in plain English” – simple enough for a layperson, or common person, to understand. This phrase is often used by an expert prior to explaining a “complex idea” (as if all ideas aren’t).

  2. “Variable Annual Percentage Rate” Annual Percentage Rate defines the amount of interest that will be paid on a loan annually (not including compounding interest). APR can be fixed (set) or variable (based upon a benchmark index). Gee wiz, that sounds simple and understandable...

  3. “You guys” It can be easy to forget the male-centric focus that most of humanity takes. This is what is meant by the ‘medium being the message’. Not every message is for everyone, but communications intended for all should include all.


“Hey you guys, we’re going to discuss variable APR percentages in layman's terms.”


Words are building blocks for statements. Simple phrases like “layman's terms” and “you guys” draw little tiny lines between us. They can serve a function, such as indicating expertise, but they can also feel off-putting and even intimidating. These are not ideal for connecting with an audience – particularly one you’re trying to teach.


Hello everyone, Let’s talk about some different types of loans.



Why It Matters

Being able to make informed, conscious financial decisions is important. This relies on an educated understanding of some pretty complex materials. This content is difficult enough to grasp without deception and foul play in the mix — yet they are (i.e. “Variable Rate APR”.) We need comprehensive material available for those seeking to learn — language that draws people in, not confuse them away.


As you already know, communication is much more complex than mere words being spoken. The majority of communication occurs nonverbally. Factors such as tone, inflection, and who is speaking can determine how a message is received.


These (often unintentional) stimuli nudge thought behaviors in ways that affect the quality of communication. These factors occur subliminally, but can be controlled to a degree. We have an amount of control over the way we send and receive messages. We get to choose how to process information we take in. The muscle used to determine this degree is the brain, it too can be exercised and improved.


Social Identity Theory describes the portion of our self-perceived image that is based upon group membership. The story one considers about themself to be true. Our social identity is a substantial predictor for the decisions we make, and why we make them.

Example: Your lunch comes with either french fries, or a side salad - Which do you choose?

Do you consider yourself a fitness fanatic? couch potato? Somewhere in between? The story we consider to be true about ourselves internally determines how we will behave externally.


We may not have complete control of this process, but we can capitalize on the control we do have by optimizing our ability to make decisions in a complex world. This can be achieved by sorting through information efficiently, and having logic we can point to for the decisions we make. Visit Freelancecorporal.com for more!



Freelance Corporal’s mission is to provide simple, trustworthy, useful information so that you can better make decisions that you believe in.


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