Behavioral Economics and Financial Decision Making
Hello. I’d like to welcome you to this webinar, “Behavioral Economics and Financial Decision-Making.” I’m Andy King with the VISTA program, and I’ll be the host for today’s session. I’ll also be facilitating your questions later on in today’s program. I’d like to introduce our main speaker today. Dr. Nilton Porto is an assistant professor of personal finance in the Department of Human Development and Family Studies at the University of Rhode Island. Prior to returning to academia, Dr. Porto spent over a decade in various management positions in the banking industry, after obtaining an MBA in Finance from Case Western Reserve University. His research applies behavioral economic concepts to personal finance and consumer behavior to help inform policymakers and practitioners. Also joining us today on this session are my colleagues Bethany Dusablon and Sam Graziani, from our partner Education Northwest and GCS International. They’ve helped to prepare today’s webinar and they’ll be managing our technology. You’ll also see them in the chat and the Q&A to help get your questions answered. A little later in the presentation you’ll hear from one of your colleagues, Rory Price, who’s a community health project coordinator VISTA with Southwestern Vermont Health Care. So here’s what we hope you’ll get out of today’s session. We’d like you to be able to look at financial decision-making through the lens of behavioral economics, and then explain how financial scarcities can hinder our ability to make informed financial decisions. We hope you’ll be able to describe concepts that impact people in poverty related to financial literacy. We’ll also review how the “unbanked” and “underbanked” are affected. We also hope that you’ll be able to identify some concrete solutions to address these behavioral obstacles in order to help the financial decision-making of those living in poverty. And, finally, we’ll have a chance to brainstorm how these insights can be applied to support VISTA members with their constituents. We’ll start out our discussion by defining behavioral economics, and then review some decision-making biases that can affect how we make our decisions. We’ll look at behavioral economic strategies that can be used to affect financial behaviors, and then we’ll talk about the impacts of scarcity on decision-making, and then behavioral economics and poverty. And finally, we’ll explore how you can apply this information to your VISTA service. Now it’s my pleasure to turn it over to our main presenter, Dr. Nilton Porto. Dr. Porto. Thank you, Andy. I’m really happy and honored to be here to chat about concepts and findings that hopefully matter to VISTA members. I was actually thinking of how VISTA members are great examples of overcoming inertia, one of the main culprits for bad choices in both our personal and financial lives. Most people say that they want to make a difference, they want to volunteer. In fact, 64% of millennials say they want to make the world a better place, and 92% of teens say they want to volunteer. The actual figure is that roughly 25% of Americans volunteer. Perhaps inertia is keeping many people from volunteering. You are in the minority, so kudos to you for taking action and making a difference. We are going to start the session off with chat questions. Please enter ideas in the chat box, and make sure you send to “All Participants.” We want your comments to be visible to everyone, so please be sure to enter them in the chat panel and not the Q&A panel further down the screen. In life, we are constantly making financial decisions, choosing a credit card, buying a new or a used car, using payday lending. They are all financial decisions that have an impact in our current and probably also future finance. Thinking back to the decision you mentioned in the previous webinar chat, what strategy did you use to make that decision? So we have the chat open, and the question is “Thinking back to the decision that you mentioned in the pre-webinar chat, what strategies did you use in making your decisions?” And we’ve got several responses coming in. First and foremost was to distinguish and clarify our wants versus our needs, what’s absolutely necessary versus what would be nice to have. Looking at a budget as a strategy and categorizing expenses, cost analysis, Jason says, that using cost as a factor in decision-making. Figuring out savings strategies, looking at the short-term versus long-term needs. Several of you have comment on that. Yeah, and thinking of the long run, what’s going to — what is the bottom line result. Someone else identified risk and tolerance for risk as a factor in making decisions. So there are lots of different strategies that you all are identifying, and you can keep those coming in. But, Dr. Porto, I’m going to send it back to you to keep our session moving. Excellent. Lots of good answers here. Lots of good strategies. I just wanted to quickly comment on a few of them. First of all, somebody mentioned the Dollar Store there. I love the Dollar Store. As somebody that does finance for a living and teaching finance, I love this concept of where everything costs a dollar. And I don’t have to think, I don’t have to — no. Later on in this presentation I’ll talk about cognitive loads. So, walking the Dollar Store, I really don’t need to think too much about the price of things. I know everything there is a dollar. It’s up to me to decide if it’s the right choice or not. So I do shop in the Dollar Store, too, for all paper products, kids supplies, works great. Another comment, so wants versus needs. That’s something that, you know, I have three kids, and even now I try to talk to them about that. In the grocery store, when we’re in line to buy something and they say they want something, kids want something, they see those candies that are set up in the checkout aisle at the grocery store. So we have sometimes these really boring conversations for kids about wants and needs, seeing the difference of those. You want some candy, but probably don’t need the candy today. So, I mean, even as adults, if you can make the differentiation in our minds, in our personal finance decisions, I think that’s fantastic. And, of course, budgets, people talk about that, label categories of money. There is research on major accounting showing that when you label money, you do a better job of saving and budgeting your money. So that’s another fantastic strategy to have there. Lots of good ideas still coming in, but I’ll keep moving forward for now and we’re going to talk about that later. So let’s start our day by reviewing the standard economic model of consumer behavior, its assumptions. The model is the benchmark used by most economists when evaluating consumer welfare and consumer choice. So, first, the model tells us that people have no consistent and stable preference. That means that people know themselves well enough to tell us what they like, how much they like, and what to order. In other words, they have full internal knowledge. The people are able to act [indiscernible] information. Even in complex choice and place, people understand all the options available by processing all the information available. You can think of this assumption as the ability to access a process with full external knowledge. Finally, people act rationally to find the best option to maximize utility. In that sense, people are able to pick the highest ranked choice available. These assumptions are useful to develop a clean model to explain behaviors. For instance, the supply and demand model is very easy to explain, and, on average, does a good job capturing bias of sellers’ behavior. Consumers will buy more when the price goes down, and firms will provide more goods when price goes up. While the model assumptions might correspond to actual behaviors in many cases, there’s lots of evidence from psychology and now behavior economics that sometimes people are not very rational. We’ll talk more about that in a moment. Let’s talk about Spock here. Spock has become the go-to character to help describe this ideal rational economics man, even though he is actually, you know, half human, half Vulcan. These home economics relies on logic and rationality in his decision-making. He’s able to carefully weigh costs and benefits after processing all the information available, internal and external, in order to make the best choice. He exercises enough self-control to be able to plan for a lifetime, by understanding that his choice has future consequences. He’s also kind of selfish, basing his choices only on self-interest. Basically, Spock is able to discount any factors that are not rational, such as emotions, the opinions of friends and family, basically any irrelevant information. Richard Thaler and Cass Sunstein used Homer Simpson as the counterpoint to Spock in their book “Nudge: Improving Decisions about Health, Wealth, and Happiness.” It seems like most of us behave more like Homer than Spock when it comes to financial and health choices. We fail to consider all costs and benefits when making choice. For example, we buy the cheapest printer without taking into consideration the expense and replacement costs of the cartridge. I have done that myself. We are not — I wasn’t able to process all the information available, either because it’s too complex or too difficult to obtain. When faced with a long and complicated mortgage contract, we fail to read or even understand all the small print that we might overpay for the loan. We care too much about being happy in the present, and fail to consider the needs of our future self. Credit cards are easy to use and we don’t need to pay for the purchase until the future. Research has shown that we spend more money when using credit cards than when carrying actual cash. Moreover, our charts are not done in limbo. We care about others and what others think of us, instead of acting in pure self-interest. In fact, some of us volunteer our time to help others for no or little pay. VISTA members might be more like Homer by caring for others than the selfish Spock. But, hopefully, you guys don’t have the doughnut addiction there. So behavior economics started as a field by recognizing the shortcomings of the standard model and how people are often less than rational. Behavior economics uses concepts from psychology to investigate all those social, cognitive, and emotional factors that affect our choice. Behavior economics tries to explain deviations from the standard model. So we need behavior economics because we are often less irrational. Now we have two references of economic behavior, Spock and Homer. Spock is calculating, rational, and affordable. Homer is more automatic, impulsive, and intuitive. Behavior economics recognize that the less rational one, Homer, is the main driver of main economic choice. Things like cognitive overloads and decision fatigue drain Spock, and Homer takes over. However, we hope that the rational one, Spock, is in charge of most important decisions, and this is particularly true for health and financial choice. So we try to use the behavior economics to either keep choice under the control of the rational one, Spock, or to help the less rational one to make better choices, that would be Homer. By the way, there is also a fun book out there titled “Homer Economics,” if you’re interested. Let me start by showing an example of an experiment on cognitive loads. Participants were asked to memorize a one-digit number and walk down the hall to tell that number to another participant in another room. On the way to the next room they were offered a snack as a thank you for their participation. In this case, most people picked the fruit for their snack. Other participants were asked to memorize a seven-digit number and repeat the same process. By far, those who had to memorize the seven-digit number picked chocolate cake over fruit. The finding here is that when our brain is under cognitive loads, memorizing the “4572489,” we are more likely to go with our emotions. In this case, the pleasure for a piece of delicious chocolate cake instead of the health benefits of choosing the fruit. Our brains are so occupied. If you remember in the figure, that we have scarce resource available to make the best choice in other areas. The same process might be in place when making financial choice, such as saving for retirement versus spending money on a brand new car today. When suffering from cognitive loads, we might be more likely to make bad financial choice. However, we might employ some strategies to avoid making this bad choice, such as delaying our decision, asking for advice, getting more information beforehand, and so on and so on. There are over 46 million people in the U.S. that seems to live most of their lives under these constant cognitive loads, this constant scarcity of resource that prevents them from making good choices to improve their own lives. They are the Americans who live in poverty. There is a very influential article from Bertrand, Mullainathan, and Shafir where they presented a new perspective on how people living in poverty struggle to make good financial choices. They start by saying that the poor suffer from the same type of biases as anybody else. The rational Spock is not always in charge. However, the poor have a very narrow margin of error, so mistakes are very, very costly. So when Homer takes over, the consequence can be devastating. They later expand on this topic in their book “Scarcity.” So living in poverty is living in a constant state of cognitive loads, due to financial scarcity. In this state, the brain is operating less efficiently and becomes more likely to make bad choice that are very costly and keep the cycle of poverty and change. So when money is a constant concern, we actually make bad choices concerning money. The authors actually state that the stress of poverty makes our IQ drop by 14 points, which is the equivalent of being sleep deprived after staying awake for 24 hours. When the stress is done, the IQ rises again, of course. So, as I said before, the poor live in this constant state of scarcity. They also might suffer from a number of decision-making biases, pretty much like everybody else. Let’s review just a few of these biases in the next two slides. Just keep in mind that when we live in poverty, our margin of error is pretty narrow. So it’s valuable to find ways that help people living in poverty to make the best choice available. So the next couple of slides we are going to talk about the following decision-making biases, framing, overconfidence, representativeness heuristics, numeracy, and present bias. Back here, framing, framing is a major factor in how we make choice. The concept comes from the prospect theory of Kahneman and Tversky. They are two psychologist that later won a Nobel Prize in Economics for this theory actually. Framing means that how our choice is presented affects our decision making. Moreover, framing is based on reference points where loss looms twice as large as gains. It works kind of like that, the pleasure gained from finding a $20-bill is not nearly as strong as the grief from losing a $20-bill. Look at the steak example in the picture. People judge more favorably the 75% lean steak than the 25% fat steak, even though they’re exactly the same type of beef. They actually used the same picture of ground beef in the actual study, so a different picture. So how the chart is presented really, really matters. I studied how to reduce disposable plastic bag usage also provided evidence how losses are perceived more strongly than gains. When there is a five-cent tax for disposable bags there’s a substantial affect in reducing the use of those bags. However, giving people five-cent bonus for not using a bag had negligible effects. So we would rather avoid a tax, which is a loss, than receive as more bonus. Even when it comes to price reduction, framing effects seem to matter. For high price products, people prefer dollar discounts, things like $100 off when buying a thousand-dollar TV. When the product is low price, we prefer to receive a percentage discount, so 20% off for a meatball sub sounds more attractive — well, if you like meatball subs, of course — than one dollar off on the same sandwich. So framing for initial reference point helps only to charge that may seem less irrational. For example, a box of cereal costs five dollars at the local grocery store, but only two dollars at the grocery store across town. Well, would you go to the grocery store across town for that? What about if a television costs $178 at the local electronics store, but only $175 at the electronics store across town, would you go to the electronics store across town? So people are more willing to drive for the bowl of cereal savings than the TV savings, even though the savings is exactly the same in dollars. So we use the price of the product as a reference in making our choice. Now imagine that individuals are making choices that cost more. Even a three-dollar difference can really adopt significant costs over time. Overconfidence tends to be a very pervasive bias in personal finance. We think we know a lot. We think we know more than others do. And when facing some type of uncertainty, such as when you’re taking a test, we’re often pretty sure we got things right. Overconfidence has been linked to excessive trading of stocks, actually leading to lower rates of return on investments and to people paying for health club memberships that they rarely attend, and they even do not cancel the membership. In my own research, I find that people that are overconfident of their financial knowledge are also the ones more likely to need to adapt constantly, potentially after making bad financial decisions due to being overconfident. And, in case you were wondering, when it comes to personal finance, men are more overconfident than women in most situations. Let’s talk about heuristics now. Heuristics is a fancy name for rules of thumb. They are shortcuts that we use to make life easier, to make complex choice more palatable. When using the right rule of thumb, we are actually saving ourselves some time and effort and still make a good choice. However, using a bad rule of thumb can hurt our choice. One such case of a bad rule of thumb is representativeness heuristics. That’s a mouthful there. This happens because we form judgments based on stereotypes, and they are too quick to detect patterns in data when the data is actually random. People have interesting reactions to lottery results. Some people do not play the winning numbers from the previous week if they believe they are the least likely to be called. Some people play numbers they think are popular to improve their odds. Some others like to pick numbers that have not been called for a while. So none of those things really matter; it’s all random. In slot machines, people change their bets by thinking they detect a pattern on the previous results. For instance, they have not won anything for a while and now expect a big win to be coming soon, and start betting the maximum amount on that slot machine. This all can lead to spending too much on lotteries or in casinos. This bias in financial issues is somewhat related for our inability to understand some basic math and probability. It is related to numeracy, our next topic here. So numeracy is the ability to understand how numbers work. Numeracy, as a bias, happens when we actually put trust in the wrong figures or fail to understand the probabilities. In a sense, we try to use numbers to help our decisions. But the math is less than perfect. The math is fuzzy. So, when trying to understand the effect of compounding interest, we rarely get it right. When presented with savings or investment choice, we fail to consider how money that you put away today grows exponentially over time. Similarly, when deciding to take out a loan, we get too focused on the payment instead of the interest being charged. We focus on how much can I afford, without considering how much this loan is really costing me. People living in poverty, under financial scarcity, might have a harder time understanding compounding. They seem to rely more on the size of a fee than the actual interest being charged. They may also see little value in trying to save let’s say ten dollars per month for their future. Truly, the interest rate has been very low in recent years and might impede some savings. Then you have present bias. Present bias is overvaluing the present rewards over long-term rewards. Present bias keeps showing up in personal finance matters of savings and spending. Although it is okay to have rather received the reward now than in the future, with this bias presence we often hurt our future by discounting the future reward too much. So here’s how it works, check those two examples that I have there in the middle of the slide. The choice between present and future are the same in both scenarios, however, people are more likely to ask for the $100 today in the first scenario, while they’ll also be willing to wait two years to get $150 in the second scenario. So that kind of shows that we are not consistent in how we discount the future and we want the rewards immediately. The demand for refund anticipation loans might get a boost from this type of bias. People want their money now, and often use these very expensive products, including fees, rates can be as high as 35% per year, and eat up 10% of your refunds. In fact, more than 25% of all earned income tax credits recipients, they’re working poor families, they use this type of loan. Now I want to take a few moments to talk about the unbanked and the underbanked. There’s a group that’s most often comprised of people living under poverty. Households without a formal account at a formal financial institution are called “unbanked.” “Underbanked” households do have a banking relationship, but they still use alternative financial services, such as payday lending and check cashing. The unbanked can be described as a vulnerable population. They are more likely to be a minority, to have lower levels of education achievement, to be from single parent households, and to be low income or poor. When I look at all the different programs that VISTA members are involved with, I’m guessing that quite a few of your clients are unbanked. First, we should ask ourselves why people are unbanked. Is this is a rational choice and should we just leave them alone? The evidence is really a big mixed on this one. So this slide lists the main reasons people do not have a bank account, according to the FDIC survey. Not enough money or lack of trust in banks are two of the main reasons cited. Quite a few credit unions and community banks have pretty basic, no minimum balance accounts available. So lack of money seems more about their perception than reality in most cases, as long as you get the right account and use it carefully. The trust issue is a tough one, since the banking industry has not done a good job reaching out to the poor and the low income people. In fact, a client with just a basic low balance checking account only becomes profitable for the bank after being charged a few fees. In the banking industry, profits come from fees to low income clients, loans to the middle class, and investments to the wealthy. So I work in a bank, for instance, where overdraft fees alone pay for all the salaries of everybody working in that bank. Lending is tied to credits, which is internally related to income. So most of the people living under poverty are unable to get any types of loans at a bank. Their reality is that most banks do not cater to the poor. This sounds to me like a good, rational reason not to have a bank account if you had it before and the fees you paid were too high, too unpredictable. So that card, as you know, frequently lets people use money that’s not available, and on the account they are charged, you know, fees for that. ID, credit, and bank history problems can prevent people from having accounts for sure. Privacy might be based on some personal situations, like people don’t want to have bank accounts. The last reason, though, is quite interesting to expand a little bit upon. A recurring theme is that people use alternative financial services such as payday lending because banks don’t offer their products and services to population needs. According to this survey of over 40,000 households, lack of products and service do not seem to be a major issue in this case. Why do we care about people being unbanked or underbanked? We see a number of positive outcomes in having a bank relationship. Bank households have more assets, including retirement assets and savings. We find more small business owners amongst banked households. It probably is really hard to run a business without accounts. The unbanked pay more in fees in their financial lives and have no access to formal savings, paying market interest rates. So bringing more people to the formal financial system benefits their own finance, and even society as a whole. Now I’m going to take a moment, I’m going to turn the presentation to Andy so he can introduce our special guest here. Great. Now we’ll hear from one of your VISTA colleagues, Rory Price. Rory is a community health project coordinator AmeriCorps VISTA member at Southwestern Vermont Health Care. She’s a recent graduate of the University of Michigan, with a degree in Sociocultural Anthropology. Rory plans to get a Master’s Degree in Social Work and/or Public Health Education after her term is served. Now, Rory, I’d like to hear what you have to share. Thank you, Andy. Hi everyone. As Andy said, my name is Rory. And I’m an AmeriCorps VISTA serving Southwestern Vermont Health Care, which is located in Bennington, Vermont. So I’m going to tell you a little bit about my host site, and then I’ll briefly speak about an exciting new program that we’ve launched here, which relates to much of what has been spoken about during this webinar. So, as you can see from the map, Bennington is a small town located in the southwestern corner of Vermont. Situated in the Green Mountains, in a pretty rural area, the population is only around 9,000 people. The area is beautiful and has many breathtaking views, but the depth and breadth of generational poverty in Bennington is equally breathtaking. 21% of people living in Bennington survive on wages equal to or lower than the federal poverty level. 60% of adults are overweight or obese, and 6.5% of adults are diabetic. Southwestern Vermont Health Care serves around 55,000 people in Bennington County and the surrounding area as well. Over half of the people seeking care here utilize Medicare and Medicaid. My goal as a VISTA has been to help these individuals living in poverty to stay out of the hospital and to live happy and healthy lives. So one way that I’m working at achieving this goal is through our new Health Tip Message Service. When I first began my year of service here in August, this was an idea that my supervisor and the previous VISTA at my site had been kicking around. So the idea is to send helpful and encouraging message to people living with diabetes. By using text messages as a medium, we’d be able to reach people anytime, anywhere, to inspire and motivate them to make healthy choices. Obviously, living with diabetes or any other chronic condition affects a person in many aspects of their lives, at all times of the day. A person with diabetes might see their doctor once a month, but what about the other 353 days in the year? Real challenges happen out in the world when no one’s looking over your shoulder. We wanted a way to help people in real time, when they need it, as a way to supplement but not replace their traditional care. It took a little while to get the messaging system off the ground, but, thankfully, we have a phenomenal IT person here at the hospital who made the whole process really easy on us. By texting “Enroll” to the dedicated phone line, users sent a message with a link to the terms and conditions of the program. By texting “Agree” after receiving that message, the individual will receive the text to their phone. So it’s pretty simple. At any point, the subscriber can text “No” to the number to opt out if they don’t feel the messages are helpful. So far, we’ve had very few people exercise that option. Not very people have withdrawn from the program. All of the phone numbers remain confidential and the texts are sent via a hospital server. So individual phone numbers aren’t ever seen. To maintain this confidentiality, this isn’t an interactive service. So while people can receive the texts, they can’t ask questions back. That’s potentially problematic, so we try to eliminate the need to ask questions at all by keeping the texts simple and direct. Consulting with a diabetes educator here at SVMC, I created 35 weeks’ worth of text messages. The messages were drafted following the same model as Ready 4 K, which is a text messaging service created by Stanford University, which sends texts to new parents, giving them easy tips regarding how to build their child’s literacy skills. More information can be found by following the link on this slide. The pattern that their texts followed, with great success, is one that we used as well. We send three texts per week in the early afternoon, when many people find themselves in the need of encouragement and just a general pick-me-up. Monday’s text sets the week’s theme with a quick fact, and then Wednesday gently suggests a behavior change regarding the week’s topic. Friday rounds out the week by giving advice to help integrate the healthy behavior into one’s life. So here’s some examples. This is a week’s worth of text messages that were sent at the beginning of December. Monday states a fact, that exercise is important. Wednesday suggests taking a walk around the block, which is a simple, free, attainable, and easy-to-measure goal. Friday suggests increasing this distance a little bit each day, leaving the exact distance to the individual’s discretion and ability. So here are some texts that were sent during the week of Christmas, which is a traditionally stressful time for many people. The purpose of this week was to make subscribers feel cared for and valuable, and to help them manage their stress. This is an important aspect of health that I think is often underappreciated or overlooked, and one that we emphasize with this service. It’s difficult to feel healthy and in control if you’re stressed and feel disenfranchised with the health care system and life in general. So we hope to counter those emotions and to improve people’s confidence and feelings of self-worth and ability. I think that SVMC’s Health Tip Message Service is effective for three main reasons, and conveniently they all start with “C’s.” So the problem is cost-effective, customizable, and compassionate. One of the main draws for the program is its low cost. Looking to the same Stanford pilot program that I mentioned before, Ready 4 K, 88% of American adults have cell phones, and 98% of cell phone owners can access text messages. 80% of the families in the Stanford program had unlimited texting. And even if a person signing up for our texting program doesn’t have an unlimited plan, 12 messages per month are unlikely to push them over any kind of limit. If it does become a hindrance, though, or too costly, the individual can simply withdraw. Most people, even those living in poverty in Bennington, seem to have a cell phone that they can use, perhaps instead of a computer. So we’ve been able to reach our intended audience that way. The program costs very little for the hospital, as the texts are sent out via our already existing server. And the tips that the participants receive generally don’t require any money expenditure on their part. It’s our hope, too, that these small nudges in the right direction will help people to improve their health and thereby to save money in the long run. So, another great aspect of the texting program is that it’s flexible and customizable. While we do already have 35 weeks of texts written, these can easily be changed, depending on the time of year, what’s happening in the community, or even the weather. The program could definitely extend to other chronic conditions, like COPD, hypertension, or depression. And it could also branch outside of the health field in ways like helping people become financially literate, increase their vocabulary, or learn about community events and opportunities. So these frequent small nudges can really go a long way towards creating a big behavior change for the better. Who couldn’t use a midday tip to help keep them on track in making healthy choices? A little prompting can go a long way, no matter what subject. So it’s really applicable in a lot of different arenas. On this slide is a text that we sent on Black Friday, which exemplifies the compassion that we relay in these messages. And I think that’s the most important characteristic of this service. Like many VISTAs, I joined AmeriCorps because I wanted to help others live happy, healthy, and comfortable lives that are free from poverty. I have quickly discovered, though, that my VISTA work can sometimes be met with cynicism and a little bit of doubt from community members. This is completely understandable. Like we talked about earlier in the webinar, people living in poverty generally are inundated with stressors and unforeseen complications. The pushback against all of the negatives in people’s lives, like debt, sickness, or other barriers, it really takes genuine and sustained compassion. By keeping the tips friendly and informal, we aim to help people feel at ease making changes in their lives. So, rather than a condescending directive, we hope to gently guide people through the everyday challenges of staying healthy. Hopefully subscribers will make small changes to their behaviors, resulting in an increase in self-worth and confidence to take an active role in their health. So that’s all I have for you. And I hope that you can all use that information at your host sites. Good luck with the rest of your service. Thank you, Rory, for sharing these great examples from your own experience. Text message is one huge nudge that’s being used more and more in behavior economics, and you’re going to see more and more the good use for text messaging in the future. So, so far we have talked about what behavior economics is, how behavior economics views poverty, and how bias might prevent us from making good financial choices. We have also reviewed the issues of the unbanked, a population that is often linked to poverty. We learned it’s usually better to have Spock in control for a choice, but that pesky Homer Simpson is frequently in charge when we are operating under the scarcity or a bias presence. Despite other gloominess of some of these facts and examples, there is still hope out there. Behavior economics tries to get scripted fields of how people act in real life, and also to develop strategies to help us make more informed decisions. Let’s review a few of those strategies listed here in the next few slides. First, let’s talk about commitment device, using an example of Odysseus. To avoid his siren’s songs, Odysseus first poured wax in his sailors’ ears, then asked his crew to tie him to the mast, then they could safely cross the siren space. So being tied to the mast is his commitment device to avoid temptation and stay on the best course. A famous study of how low income banking clients in the Philippines showed that quite a few clients preferred to save money using a lockbox that they could only access by visiting their bank to get the key. In fact, those that opt for the commitment device, this locked box, were more likely to save and actually saved more than those with a regular savings account. So posting a health or financial goal on social media is also a form of commitment device. Our peers might be the extra incentive we need to accomplish our goals. So it’s a great technique against procrastination and to solve self-control issues. However, you need to be aware of your self-control problems to demand the commitment device. We call people that are aware of their problems “sophisticated.” Naive people, on the other hand, they do not realize that they have a self-control problem, make a good choice, and might not ask for any type of commitment device. So Odysseus and those Filipino households were sophisticated enough to demand a commitment device. Choice architecture refers to how options are presented or framed when people need to make choice. Nudge, default, and simplification of how charts are presented also fall within this type of choice architecture. So a good experiment used traffic light labels for eating healthy, red for unhealthy, green for healthy, and yellow for less healthy in the cafeteria, and found an increase in consumption of healthy foods and a decrease in the consumption of the red label, unhealthy types of foods. So another experiment on the school cafeteria simply changed the order the food was presented in the line. Actually, this experiment was done by one of my advisors a few years back. So students were more likely to pick a health beverage than chocolate milk if the health choice was presented first. So, as you can see, choice architecture is not rocket science, but can be very powerful if used properly in health and financial choice. Nudge, a positive enforcement and indirect suggestions used to alter people’s behaviors and choice. It is supposed to be easy to implement, not part of a mandatory change, and people will still be able to choose differently if they want. So those nudges have become so popular as interventions that even the British government has assembled a team of experts, nicknamed the “Nudge Unit,” to help implement policy changes. You guys can go online and Google “Nudge Units,” it’s pretty funny. So the health tip message that Rory shared with us is a great example of an easy-to-implement and effective nudge. Text messages have also become popular to help people save money or to avoid late fee payments in homes. Defaults are what happens if you do nothing. Changing the default setting has been a powerful tool in helping people make better decisions if we know what the right decision should be or if we can set up the right defaults. So a few experiments show that changing the default option in 401(k) plans for new employees drastically increased the number of people saving for retirement. When the default is to opt into the program, less than half of new employees sign into the 401(k) plan. After changing to an opt-out default, the total enrollment almost doubled. In the new default, new employees are automatically signed up for a 3% contribution, and have to actively opt out to stop contributing to their 401(K) plan. So why did this happen? So maybe the new default took care of issues of inertia that I mentioned before of the time and money required to start contributions and maybe any self-control issues that might have prevented participation before. The default change in 401(K) plans was very successful in getting females, Hispanics, and workers making under $20,000 to increase their participation. So the average participation rates also improved significantly from 49% to 86%. However, default settings might also have some unintentional and sometimes detrimental consequences. If the default is 3% of salary, people are less likely to increase their contribution to a higher percentage, and stick to that 3% mark. So the rule of thumb in financials is to save at least 10% of income to retirement. So defaults might prevent some people from saving even more. So quite a few of the behavioral biases can be due to the complexity and high efforts involved in making choice and gathering information. So one experiment found that just by providing a map with directions to a vaccination post had much larger effects in getting people vaccinated than just providing information about the health benefits of that shot. So just information of the benefits of an action might not be enough. We need to simplify, we need to facilitate whatever beneficial choice we hope people will make. For the unbanked, facilitating their choice of getting involved with the banking system might be very valuable. For example, credit unions and local community banks might be interested in participating in events where low income and unbanked families are present. In fact, they can manage their personal bankers, not the people in charge of opening the accounts of the sales in the bank. They’re quite often paid commission for bringing new clients to the bank. So in coming and bringing new people to the events, and I mean banking people, credit unions, perhaps you talk to people about how credit works or to give them the steps into buying a house or how to manage their money, or any kind of event that might help give the information to. So I did this type of community outreach quite often when I was a bank manager. And it is usually a win-win scenario, you know? I was able to help people’s banking and personal finance type of questions, and I was able to make new clients for my branch. It was fun to do really. So low English-speaking Hispanics are one of the largest underbanked and unbanked populations in the U.S. Sometimes just finding a bank representative that speaks their language can overcome their fear and distrust of banks, and help them become more financially savvy. So one of the reasons people might prefer using payday lenders, check cashers, and even their neighborhood bodega is simply the fact that those businesses are quite often staffed by bilingual employees, people that speak their language. In personal finance, behavior economics can be used to help people make better choices in the areas of earnings, savings, protecting, spending, and borrowing money. Those are usually the five main areas of personal finance. For example, in the case of poor individuals buying lottery tickets. The Save to Win program that was started by Peter Tufano in Michigan has shown lots of success helping people star savings by offering a certificate of deposit, another type of savings, that also includes prize awards on a regular basis. So the CD can be opened with as little as $25, and clients are entered in drawings for prizes, just like a lottery. It seems like people really like that and they demand these type of accounts. We can also help people with their spending habits by using the concepts of major accounting. As somebody mentioned before in the chat here about labeling their money, that’s exactly what major accounting uses. So in major accounting, people label money to different accounts, while all the money that’s not labeled is more likely to be spent, and not always in the most beneficial manner. So it’s better to label your money ahead of time. So helping families to label money to different expense and savings goals, maybe just by naming their savings accounts, some banks let you do that online or something like that, or if something as simple as the color-coded envelopes can potentially help make better choices and more savings. So we already have the great example of Rory using text message as a nudge to help people make good health choices. Now can you think about examples where you can use some of the concepts with this cast, things like Nudge, defaults, and overcoming all those different biases to help the programs or constituents that you support as a VISTA member? So please enter your ideas in the chat box and make sure to send to “All participants.” We want your comments to be visible to everyone, so please be sure to enter that in the chat panel — you guys have been using that already — and not in the Q&A panel further down the screen. And I’ll pass it now to Andy. He’s going to start reading some of the responses to us here. All right, so we do have — VISTA chat activity is open. We’d love to hear ideas that maybe you’ve come up with about how you could use some of these behavioral economics solutions to help your VISTA’s program, your project, or maybe the community that you’re serving. I’ve see some ideas already coming up earlier, and I would love to hear what else you’ve got. All right, so Kenneth says you could use it to let clients know about secondhand stores in their area or, really, for any other resources for that matter. There are opportunities or resources available in the community. You can get these types of messages to go about that. You could add financial literacy to your standard literacy program; right, so you’re sort of bringing the information to the people who need it. Asking local banks and bank program. Great. So, again, it’s that convenience factor, simplifying, letting people, trying information more easily. Jill has an idea sort of related to what Rory talked about, using text messages. Text encourage middle school students who are in a dropout prevention program. Bringing bank representatives to our center during the hours that most clients are present. That would certainly [inaudible]. Let’s see, offering a gift or the opportunity to earn a gift card for a job seeking candidate. So once they get a job they get a little reward for that. Asking more questions about a constituent’s decisions in order to get a better idea on what they’re thinking process is like and helping perhaps to coach them along the way. Knowing about when and how to present choices, so that whole choice architecture. Lots of great ideas here. Improving financial literacy workshops and collaborating with banks on how to teach clients about personal financing. Someone shared a resource there. These are action pre-activity workshops that you might want to attend. Informing college students about how people think about money and the contribution that stress plays in all of that. Offering grant-writing work shots, introducing clients to bankers. Terrific. Tons and tons of ideas here. So, well, it looks like all of you have learned a lot and have some great ideas and resources that you can implement and that you can share with each other. So definitely want to take a look. You can scroll back up through the chat and see what your colleagues are suggesting, and maybe you’ll see an idea there that will help. Dr. Porto, any thoughts about what you’ve seen here? Yes, Andy. Actually, there’s so many good ideas here that I was trying to copy and paste them to a Word document so I could print that for the future. So, please, guys, don’t stop the chat until the end of presentation so I can get all these great ideas here. I want to comment a little bit about financial literacy, because I saw a few comments about that. That’s what I teach. I teach personal finance class at the undergraduate level. I teach a very basic personal finance class, which I call Personal Finance 101. Actually, the title of the class is something different. And then I teach a more advanced finance class, in which people have to calculate, compound. They use their calculators. So there are two levels of personal finance class. One thing that seems like that’s been coming out of research is that financial knowledge, as much as we try to teach that, people have a tendency to look for the knowledge of what they need. So what I mean by that, I might be teaching my students today about buying a house, and that’s a decision they’re not going to start, you know, taking steps towards that for another five, ten years. So it might be stuff that I can teach today but they cannot implement until the future. However, financial literacy should be very powerful. It’s things that could be implemented right away. So I see lots of good comments about budgeting, saving, the value of money, and that’s kind of the same type of things I try to pass to my students. Understand the credit card statements, not being afraid of calling the credit card company or calling your bank or review your loan, and complaining if you see that the fees are not right, if the rates are not what you expect them to be. So, I mean, knowledge in finance is really, really important. It seems like we’re only able to apply knowledge well when the right time comes. So some of your clients, it’s time to teach the very basics of credit, very basics of managing their money or their bank accounts. And like many of you guys said there, maybe start to bring some bankers in and get some of your own constituent bank accounts, so that might be those people, for either you or your client review with the programs. IT might be time to really take the next step about investing for retirement, buying a house. So financial knowledge is wonderful. We should find a ways to give people financial knowledge, but you also have to time that at the right moments to really be effective there. So great comments. Like I said, I’m going to copy and paste for my future here. And I saw comments about somebody was looking for some of the sources that I used here in the presentation. I’ll make sure that I share it with you guys in the future here, too. And I also have a slide of resources here for you, that I put together, some of the ideas that I had that may be helpful for the programs that you are working on right now. So I wanted to leave you a few resources to use and share with your constituents. Benefits.gov is a great first contact to help people find out what’s available out there for them. Maybe many of you guys have used that before and know about that, know about the website. So the second chance bank accounts, you know, quite a few banks and credit unions offer some type of second chance accounts for people that have had an account before but it was closed due to insufficient funds. They have some problems paying back the bank. While they might have fees or other limitation, at the same times, they might still be a better option than using payday lenders and check cashers and any other type of alternative financial service. So look into that. It might be helpful for some of your clients. So the third bullet point, tax filing can be very cost complex and costly to many families. Remember how lower income families are heavy users of expensive refund participation loans. So one option here is to find a volunteer income tax preparation, a Vita site in your area using the IRS website, and we’ve going to have the link over there for you. The tax preparation is free. Many locations offer banking and savings products too. Then we have the Doorway to Dreams. It’s a great initiative. It provides save innovations to lower income individuals. For example, the savings and lottery combo started right here. Check it out once in a while to get some new ideas. Finally we have Bankrate.com. They’re very easy to use calculators that cover everything from debt management to used car loans. So it’s a great place to avoid those numeracy shortcomings that you talk about and make sure that people are not using bad rules of thumb. That’s actually the calculators that I use in my classroom, my Finance 101 class. So if anyone has any other resource they’d like to share, please put it there in the chats. We have seen quite a few already, and thank you for taking the time to attend this presentation. We now have some time let for some questions and discussion. And I’ll turn the presentation back over to Andy. Andy. Great. Thank you, Dr. Porto. And thanks everyone for your participation so far. We will get to your questions in just a moment. But while we’re doing that, we also want to invite you to share your comments about the today’s presentation using the evaluation poll that you’ll see on the right side of your screen. We’d love to hear your thoughts about how this session was for you, if you have ideas for how we can improve it, and also if you’ve got ideas for topics we could offer in future webinars. So thank you for that. And while the evaluation poll is open, it’s probably closed for you, the chat panel, if you have a resource to share, and also the Q&A panel where you can enter your questions. Just click the little triangle next to ether one of those and it will reopen the panel. So it is time for the Q&A. And I’m going to ask our operator, Robin, to come on the line and give instructions for how you can ask questions by phone. Robin? And thank you. We will now begin the question-and-answer session. If you would like to ask a question, hit “*” followed by the “1.” Please unmute your line and record your name clearly as prompted. And to withdraw the question, it will be “*” followed by the “2.” Again, with any questions from the phone line, please press “*” followed by the “1,” and one moment while we wait for those questions. Perfect. And just a reminder, the Q&A panel is just about the evaluation poll, so click the triangle next to the letters Q&A. That will open the panel, and you can submit any questions there. We’ve got a number of questions already lined up, so let’s dive right in. Let’s see, our first question comes from Courtney, and Courtney says, “How could VISTAs use this knowledge of behavioral economics to support the capacity our worksites to engage and build relationships with our own families and individuals?” So, Dr. Porto, you want to start us off with that question. Oh, sorry for that Andy, I think I was on mute here for a moment. Oh, yeah. Okay, great. Yes, that’s a good question. It seems like your programs are so different for each other and you guys are helping so many different programs out there. I guess I would start, if I was the VISTA member working a program, I would start by looking around and try to figure out, you know, what are some of the difficulties that people have to either access my program or use some elements of the program. I would start with the whole simplify, facilitate. Are the forms too complicated? Is there a better way to communicate with my constituents. Are my hours the right hours? You know, hours is obviously annoying. The whole about dentists working separate hours than we are working too, and maybe it’s a moment to look at the hours of the program, if it’s the most effective to reach your community. Look at small things like that. So, I mean, the whole idea of behavioral economics, really, nudge simple things, choice architecture. So if you could start by looking at taking those small steps that facilitate how people access your program, I think it might be really, really helpful to your community. Perfect. Our second question is for Rory. This comes from Kevin, and Kevin asks, “Where would I start to set up an opt-in text messaging system?” I like the idea for my own project, but I’m not sure how to go about setting up something like that?” So, Rory, do you have any some advice? Yeah. I’m not sure how helpful I would be regarding the IT effective things. I’m really fortunate at my site that we have a really modern up-to-date IT system, and people that know how to implement programs like this. So what I would recommend is figuring out some of the logistics on your own side first. So what I did was I wrote all of the messages that I would send out, what days I would send them out, consulted with someone, an expert in whatever field you’re looking to be referring to with the text messages, and then I guess you would have to approach a company. Yeah, I’m not sure how that would work, because our server is right here. So it was really convenient for me. I’ll send you my e-mail information and I can try to help that way maybe get some more specifics about what you’re looking to do. Great. Thanks for that, Rory. But just I guess as a general, you know, overview of how something like this works, so basically there is software or maybe a website or some kind of technology solution that allows you to put in a list of the mobile phone numbers; right? And then you can also queue of the messages and schedule them a particular day and time, and then the system will automatically broadcast those text messages to all the people on the list. That’s generally how it works? Right. Yeah, I think so. And depending on the amount of people you were looking to text, you might even just have a dedicated phone for that that you could send out for the numbers. It wouldn’t be as confidential that way. But I guess depending on your topic, that might be an easy solution as well. Great. All right, thanks. So now let’s check and see if we have any callers on the phone. At this time, I’m seeing no questions, but as a reminder, if there any questions from the phone line, it is “*” followed by the “1” to ask a question. Great. And also, as a reminder, if the Q&A panel has closed for you, just click the small triangle next to the Q&A that will open the panel. You can submit your question. Please make sure it goes to all panelists so that we’ll be able to see it and include it. Next up, for Dr. Porto. a question from Robert, and Robert says, “I saw research talking about how check cashing vendors and payday vendors are more popular in poor communities. Are there any tips about working in populations located in these areas, where banks are less accessible?” Yes. What a great question there, Robert. Let me start to review some quick things about check cash and payday lending, because they’re kind of fascinating, because the people that go to those places, in theory, they’re a little bit different. To do a payday lending you have to have a banking account. You know, the way the payday lender works, they’ll go there and they’ll say, “I need some money today, and I’ll pay you back in a week” or whatever the term is. And in order to pay back the payday lender has to write a check. So people that use payday lenders should have a bank account in most cases. Check cash will be different. Check cash may be somebody that doesn’t have a bank account whatsoever and needs to cash their payday check. They do focus in poor areas. They do because that’s what most of their clientele is. And some states have passed some laws that limits the access of payday lending. They have to have payday lending in a certain geographic area, not too close to residential areas. The economics mind thinks maybe that’s not a really good idea for the poor. Maybe the competition is better, because you have several, you can decide which one is a better price. Anyway, that’s beside the point. Again, I think there main ally in reaching out that use those would be your community banks, your credit unions. When I was working in a bank, we are looking for those people. We want to have an opportunity to maybe provide some of the services that the check cashing places provide, the payday lend is providing. So if you have any context there in your program, any community bank, any credit union that’s willing to work with you, actually, though, these programs would be the where you find the people that use those types of alternative financial services. And I’m sure that the bank represents and credit union representatives, they would love to come and talk to people, set up shop there for a day, talk to your members as they come in, and they’ll find ways for them to stop using some of those services. I’m not sure if it’s the best answer, but it was an excellent question. I’ll pass it back to Andy to read some more. Great. Next up, Katherine asks, “On how choices are presented” — I guess the topic of choice architecture — “do retail stores having sales reps provide the cost analysis to customers help people to make smart choices?” Oh, that’s fantastic. Well let’s go back a moment here. Behavioral economics sometimes we like to say that we invented the wheel. But the fast is lots of concepts of behavioral economics came from psychology, and actually came from marketing. Marketing people know a lot of stuff about how charts are presented; right? The whole thing about the eye level in the store, vendors, you know, fight for that space. Vendors will give store special promotions, special discounts to have the eye level type of thing, you know. So having the retail stores, sales reps, provide the cost analysis to customers, I don’t know how that happens, really happened. That’s in the best interest of the store, I guess — just think about that if a few minutes, I don’t see that happen. The goal for the sales rep is to have the sales, if they’re commission, or good service and other things. So perhaps the retail stores are not the place where you can really look for answers when it comes to choices presented. Maybe some for us, public policy or other areas. That’s already happened, things like FDA, the Food and Drug Administration, that’s what they do. They try to review the food and the medication available, make sure to provide the best information to customers. Otherwise who knows what some drug companies and some food companies would say about their own products; right? So I think retail stores, they know how to present their charts already. They’re just going to do that for their own interest, not necessarily the customer’s interest. Yeah, it helps to know — I think that probably goes back to what you mentioned earlier regarding banks and the level of trust that people have in those institutions. So if a retailer is busy being more self-interested than having the benefits of its customers up front, it may be hard for a customer to trust that the store or the retailer has their best interest at heart. So interesting question. Do we have any questions on the phone yet? Yes, we do. We do have one from Joshua, you line is open. Hello, Joshua. Hello. I’m just curious, is it best to pay off the balance of a credit card all at once or to make just not necessarily the minimum payments or the normal payments. I’ve heard different things, and I didn’t know if it depended on the credit card alone or if there was a general rule. Yes, I’ll take it. Yeah, sure. All right, Andy. Yeah, Joshua,, yes, I have heard this question before from some of my students, and from other people too. We kind of hear conflicting response to that. But, yeah, how it is, no, if you have a balance on credit card and you’re paying interest on the balance, and you are able to pay off the balance, you should pay off the balance, otherwise you’re paying interest to pay off. The other part of your question, I think you’re talking about developing credits. To help your credit score, what you want to see on your credit report are regular payments. So perhaps the best way to develop a credit score is use your credit card every month and pay your balance in full at the end of the use. Then use again, and pay your balance in full. As long as the credit report shows that stream of payments being paid on time, you know, there’s no late payments showing up on your report, that’s really, really helps you credit. Another thing that helps your credit related to using credit cards is your utilization ratio, also called a users ratio in some case. If you have a limit of, let’s say, $1,000 on your credit card, you want to avoid your balance going over, let’s say, 50%. So you never want to have more than $500 on that credit card. Because as your balance is getting closer to your limit, that’s hurting you credit. In fact, the best thing to do is have under 30% balance not over limit. So if you limit is $1,000, you want to keep under $300. And, again, the best way to develop your credit, credit cards, you can use your credit card, that’s fine. As long as you pay in full, you’re not paying any fees, you’re not paying any interest rate, as long as you’re paying on time, and, you know, that’s going to help your credit. So the fees on the credit card, if you pay at least the minimum payment you avoid the late fees; however, whatever the balance is left you’re going to be paying interest on the balance. So if you have the money available, pay off and then just keep using your credit card on a regular basis. Hopefully that’s what Joshua was talking about and I was able to answer that. Yeah. And, actually, I had an unfortunate personal experience with credit cards that I’m willing to share. One thing I learned sort the hard way, I missed a payment one month and so the bill came the following month and said, you know, I had something due last time, plus something due this time. Okay, my bad, I’ll just pay off the balance. So I sent in the payment for the total amount due, and then sometime later, a year or two later, I was applying for a loan and that came back to haunt me, because it showed on my credit report that I had a missing payment. When I paid two months at a time, it showed that that original payment was still missing, even though I paid the total balance, and it showed it like it was unpaid for 24 months or something, which looked really bad on my credit report. So one thing I learned is if you do get late or miss a payment, at least to me it seemed it’s better to make two payments to pay off the two months rather than just sending in one payment to pay it all off. So, again, I don’t know if that’s helpful for Joshua but something that I learned and my personal experience. All right, next up, a question comes from [indiscernible] and this is a really interesting one, so I hope I can do it justice. And it has to do with the unbanked. It says, “How would we go about approaching people who have limitations on banking due to either limitations related to food stamps or maybe their eligibility for a benefit like SNAP, or due to someone who is a parent avoiding getting their bank account garnished due to being mandated to paying child support?” So any thoughts on how you could approach people who have those kind of limitations around banking? You know, I have experience with clients that had exactly that situation there. And as well as tell you my thoughts, I can tell you what those clients did. They tried to open accounts in somebody else’s name. So, for instance, if it was a limitation on the food stamp limitation, you cannot have a certain amount of assets, or Medicaid, so they would find a way to set up accounts in their children’s name or family member, set up a savings, and sometimes the savings is in the child’s name or the guardian’s saving so they could use their accounts. That’s the way that I saw people handling those situations. And if you go back to that question, FDIC survey of the unbanked question, when people mention privacy, I think that’s exactly what they mean in some cases. They don’t want to have a bank account because of those limitations of food stamps or because of mandates to pay child support, and they don’t want to have their wages being garnished. As far as the situation, there’s a fine line here, moral, ethical sense. We do want to help people avoid that, you know. The way that I see people doing that is really to try to set up those accounts, instead of their name set up in somebody else’s name maybe a guardian or maybe a power of attorney on the account. All right, thank you for that response. And now let’s go back to Robin and see if we have other callers on the phone. At this time, I’m seeing no questions. But, again, as a reminder, it is “*” followed by the “1” if you have a question for the phone line. All right, and this will be our last call for questions. We’re approaching the end of our time together. I don’t see any other questions here in the Q&A in WebEx. I’m going to ask my colleague, Bethany, if I’ve missed any to please call it out. Oh, I’m sorry, Andy, I just saw one question coming in there. Oh, yeah. You see that? I could take that one. Yeah, go right ahead. So the question here that we have is from Kenneth, “What [indiscernible] are there for undocumented residents show up on bank accounts, and what risks might they face during the process?” Great, great question. We saw that a lot. I actually have the privilege, I really call it “privilege,” because I love working in that place. I worked in a location in a bank. I was a manager. Half of my staff spoke Spanish, and, actually, I am not fluent in Spanish, but learned so much from my clients that I can help people in Spanish when it comes to personal finance. Though I might not be able to talk about a recipe or some type of small talk, but I can really get my financial Spanish. Anyway, we hear that all the time. First of all, banks have no interest and will never report you to immigration or anybody that comes into the bank. I never heard about that ever happening in the bank industry, but of course I might be right. My experience was in four different banks, and we really don’t care about that. Undocumented residents who come to us, we do everything we could to open the accounts for them. It was much easier in the past, where people could apply for IT number, the tax identification number, so they could apply for that and open a bank account with that. But now it has become much more difficult. The banking industry has shut down some loopholes since 9/11 really, in a sense. So it’s a little bit harder. Undocumented residents, some banks might still allow things like matricula consular, from Mexico that are here. If you have a matricula consular, which is not a full passport but it is issued by the local consulate, in some cases, some banks will let people open accounts with that. I would check community banks and credit unions. If they do open the account with a passport, in most cases we have to check to see if there’s a valid visa, and if there is, they don’t necessarily need to have a social security if they are legal visitors here. But, of course, you ask about documented residents. So just to sum it up, I would not discourage people from trying, maybe find a representative that speaks Spanish that understands where they’re coming from, and then have your clients visit a bank an see what the options are. Some banks are more lenient than others. There’s still some federal regulations they have to follow. But who knows, I mean, I’m pretty sure that most of the bank representatives and credit unions, they will try to open an account. They’ll try to find a way. If they have a way, they will try to get a personal bank account. All right, great. Thank you for that answer, and what a fortunate thing we had you on this call with your experience exactly in that realm. Well we’re approaching the end and, Robin, I’m guessing we have no other callers on the phone? Yeah, I’m showing no further questions. Okay, great. Well, then, we’ll leave it here. Thank you all for all of your questions, your participation, the suggestions and ideas that you’ve shared with us today. I want to say a special thank you to Dr. Nilton Porto from the University of Rhode Island for his time with us, for sharing all of his expertise and knowledge about behavioral economics. I also want to give a special shout out to Rory Price and the great work that she’s doing in Southwestern Vermont in behavioral economics and nudging to really improve the health and well being of the community members there, and to thank all of your for your participation. I also want to highlight what we’ve got in store for you next month. We’re sort of continuing the theme around poverty in our list of webinar series, and the next step will be a look at “Poverty and the U.S. Safety Net.” We’re really fortunate to have another expert coming in with us next month. Dr. Stephen Pimpare who is the author of “People’s History of Poverty in America.” He’s no stranger to VISTA. He was a big part of our 50th Anniversary Celebration over the course of the past year. He recorded for us a great video called “13 Lessons about Poverty,” so that’s available on the VISTA Campus website. Anyway, you will be getting more information about next month’s webinar coming up on February 24th at the same time. So we look forward to having you back again, and thank you again for all your participation.