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There's just going to be days.
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You can't make it to the gym.
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There's going to be weeks where, you know,
you're just not going to be able
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to save amount that amount of money
you wanted to.
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And the problem is, is that
these small failures really derail people.
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Right.
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And they're so, so common
over the course of the months
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or the years that we're trying
to pursue these long term goals.
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And it's so common for them to.
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Do you realize that
there's actually a phenomenon
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that's been termed to describe
this called the what the hell effect
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that basically when we, you know, miss
going to the gym one day or, you know,
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miss that weekly budget goal,
we kind of completely abandon the goal.
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Welcome to The Ripple Effect,
00:00:43
the podcast that takes you on a journey
through the minds of Wharton faculty.
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I'm your host, Delany,
00:00:49
and in each episode
we'll be diving deep into the inspiration
00:00:53
behind the groundbreaking research
that Wharton professors have conducted
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and exploring how their findings
resonate with the world today.
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Well As we come to the end of the year,
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people no doubt set goals for themselves
in the New Year.
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Some of that may relate to their health,
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some of it may relate
to their professional careers,
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and trying to keep on that path
can also be a great challenge.
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But holding yourself to a high standard
and not making mistakes or falling
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off the bandwagon as it may be referred
to can even be a greater challenge.
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So that's why having an emergency
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reserve or a cheat day,
as some refer to it, may be a great way
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to be able to work around the challenge
but still be on a path to reach your goal.
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Pleasure to be joined here
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in studio by Marissa Sharif,
who is an assistant professor of marketing
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here at the Wharton School.
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She's done research in this arena
and she joins us with more.
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Marissa, great to meet you.
Thanks for coming in.
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Yeah, thanks for having me.
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Let me start. Larger scale here.
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What was it that drew your attention
to this idea in the first place?
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Yeah. So I study motivation.
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That's kind of my life, my passion,
what I think about all the time.
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And I noticed a common problem
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that people are facing
that you kind of alluded to, Right?
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That a lot of us have these big long term
goals, right?
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A lot of us want to become healthier
or save money.
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And one way we try to reach these goals
is by having shorter term goals, right?
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So maybe I decide to go to the gym four
or five days of the week
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or save a particular amount of money
each week.
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And so that's great.
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But a common thing that happens is that we
experience these small failures, right?
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There's just going to be days
you can't make it to the gym.
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There's going to be weeks where, you know,
you just not going to be able
00:02:37
to save amount that amount of money
you wanted to.
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And the problem is, is that
these small failures really derail people.
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Right.
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And there's so, so common
over the course of the months
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or the years that we're trying
to pursue these long term goals.
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And it's so common for them to.
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Do you realize that
there's actually a phenomenon
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that's been termed to describe
this called the what, the halo effect
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that basically when we, you know, miss
going to the gym one day or, you know,
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miss that weekly budget goal,
we kind of completely abandon the goal.
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And the idea is, you know, I failed today.
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There's no way I'm going to be able
to reach the goal this week.
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What the hell?
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Why would I continue?
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Right. It's no longer in sight.
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It's not attainable.
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And so how we started thinking
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about emergency reserves is kind of
how do we solve this problem, right?
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Like, how do we help people persist
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after these small failures
that are so, so, so common?
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And that's where we started
thinking about emergency reserves,
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which is basically some type of slack,
some type of flexibility within a goal
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that's available if you need it,
but at some type of psychological cost.
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Right.
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So think about, for example,
you know, we are often
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encouraged to take like 10,000 steps
per day.
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Imagine you set a goal of taking 10,000
steps every day,
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but you give yourself to emergency
skip days, right?
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Two days out.
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If something comes up,
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then you'll just skip those days
and you're still achieving your goal.
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And so what we found is basically
that these goals
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with emergency
reserves are better than those without.
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So there is a definite path
that that having that emergency
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reserve and people being able to at times
rely on it
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still helps them towards the larger goal
and be successful longer term.
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Yes. Yes.
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That's the idea that kind of it
helps people keep going.
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It kind of takes away
these negative feelings about goal failure
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and allows people to keep going week
to week to reach these bigger goals.
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Does it become
then part of almost one's life lifestyle
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that if they have that philosophy,
that mindset,
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that it can carry over to either
other parts of their lives
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or to other goals that they're trying
to reach at other periods of time?
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Yeah.
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I mean, you can think about number one,
like at a closer level,
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you can think about applying emergency
reserves to a lot of domains, right?
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So you might start, for example, with
maybe you're trying to get more fat,
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but then maybe you want to go
into saving money and you have, you know,
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an emergency budget that you have
available some extra dollars.
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But yeah, the idea of giving yourself
some slack is good
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in terms of persisting after failures,
but you don't want to give yourself
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too much slack and you don't want it to be
something that you keep dipping into.
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Right.
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So one of the reasons
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why emergency reserves are effective
is because it helps people keep going.
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But another part is the way that you think
about emergency
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reserves is kind of this
small bucket of them, Right?
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You only have two per week, for example.
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And so you're trying to hold on to those
and you're
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thinking about each day,
do I want to apply my emergency reserve?
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Reserve
or do I want to wait for a more emergency
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or more immediate situation to use it?
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So having something
that's limiting you from really,
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you know, taking too much advantage
of that flexibility is also important.
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It's a balance.
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And I'm wondering
also if there is also a benefit that if
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people say you have a situation
where you may think about using a reserve
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and you don't use it. Yeah.
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And then you get a few more days
down the line,
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you actually have the potential to,
you know, succeed your goal
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in a quicker fashion because you haven't
kind of dipped into the bucket totally.
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So that's one of the ideas.
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And we find that a lot actually.
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So we compare it to, for example,
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imagine you're trying to reach
10,000 stops and you do it
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seven days of the week,
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five days of the week or seven
days of the week with two emergency skips.
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The emergency skip version
does better than both seven and five.
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Right.
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And that's because people
don't want to use their emergency scopes.
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Right.
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But it also helps them
if they do have to use them.
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So it's kind of
combining the benefits of both worlds.
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Do we know whether or not using
the emergency reserve then
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ends up helping people exceed their goals?
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Yeah, down the road.
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So exceed is like doing
even better than the
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with having them
or what do you mean by well, like
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either in terms of the time
that they reach the goal.
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Yeah. Shorter. Yeah.
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Or if it gives them motivation to expand
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that goal going from,
say 10,000 steps to Yes, yes, yes.
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So it definitely helps them
reach these short term goals
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more often.
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And so that will speed up the process
of reaching these bigger long term
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goals, like, you know, getting fit faster
or saving money quicker.
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So, yes, in that way, you've also talked
about the element of self-control.
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Yeah.
Being important in this process as well.
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How so?
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Yeah.
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So goal setting in general is is helpful
for self-control problems, right?
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So when we're thinking about reaching
these bigger long term goals,
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one of the reasons
why we struggle with them is because
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we want to have kind of these immediate
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pleasures rather than delayed pleasures.
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And because of that,
we kind of procrastinate a lot of times on
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doing these actions that delay pleasures
but help us reach these long term goals.
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And so setting these short term goals
in general, right?
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Like going planning to take 10,000 steps,
four or five days of the week,
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help with those self-control problems
because there's a plan each week, right?
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I'm not having to come up with that day
to day.
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And emergency reserves on top of
that can help
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because if you do fail,
there's kind of this
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interplay iron in action
to tell you what to do the next day.
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Right. Keep going.
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Compared to relying on your self-control
to be like, mm, I failed.
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Maybe I'll give up.
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So if
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someone is able to be successful
in reaching a goal,
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I'm wondering if there is also a component
that could be transferable
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to a friend or a family member.
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And I asked that in part because we know
that there are so many businesses
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these days that focus on this goal
setting around health care
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because they're obviously concerned
about the rise of health care costs.
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So is there a component
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that can help friends or family if another
person in their life is successful?
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Yeah, totally.
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So a big one of the big reasons
that people are motivated to start
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pursuing a goal or, you know, even persist
while they have have
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it is how achievable
or how attainable that goal feels.
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Right.
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And so if you see people around you
achieving these goals,
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like with emergency reserves
or with any tool, honestly,
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that's going to motivate you
to also get going.
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Right.
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You see people, you know, that are
potentially similar to you reaching out.
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So you think I can reach it too?
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And so that definitely motivates people.
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There is also the element of stress.
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I think any time somebody is trying to
reach a goal, it's a challenge for them.
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And there are moments, as you said, that's
why probably people use
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that emergency reserve, that
maybe they reach a point where they need
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to take a break or they've reached that
that stressful point.
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How does that component of stress factor
in, do you think, to this entire process?
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Yeah.
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So I think the emergency reserve does
a couple of things to the stress part.
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It's definitely reducing,
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you know, that stress or that negative
feeling after you feel like exactly
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what you're suggesting.
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I also think knowing ahead of time
you have it is a nice
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de-stressful thing, right?
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And I know that because we've also tested
what type of goals
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people like and what programs
people would want to sign up for.
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And people
definitely prefer these programs
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that have emergency reserves
or have flexibility,
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probably because they like the idea
of having it just in case
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something happens that also reduces
that stress level right at the start.
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Right.
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We've talked about this here
about health care, health and money.
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But how broad do you think the use of this
mindset of emergency reserves
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in terms of goal setting can be in their
professional lives in other areas as well?
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Yeah.
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So I think from a company standpoint,
right.
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So health care savings,
like you said, big.
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I also think it's really common right now
for people
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to try to use companies
to help them reach their goals.
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Right.
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So think about the number of fitness apps
that are available.
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Right.
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Or even just YouTube stations
that are on helping you become more fat.
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Or think about the number of apps
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that are trying to help people budget
or learn a new language.
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There's so many of those.
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So emergency reserves could be implemented
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in these in these apps
or these programs too, to help people.
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And then beyond that,
right from the consumer or personal level,
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people can think about using those.
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And in almost most domains, right, like
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I would say, domains
that might have some type of like
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addictive
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components, like, you know, stopping
smoking or something like that.
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It might not work to have the emergency
reserve because if you do dip into it,
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it might really be hard to like, you know,
go back to where you were before.
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But beyond that,
like a lot of domains should work well.
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That's interesting you say that
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because obviously in our lives
there are habits. Yes.
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Which are at times so addictive.
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Yeah.
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And can be so negative to our lives
that using that that that cheat day.
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Yeah.
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Can end up having a longer term
negative impact than a positive.
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Oh totally.
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And I've only studied this
so far and goals
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that are trying to start
a beneficial behavior.
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Right.
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Like take more steps or you know
do more work tasks or something like this.
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I haven't looked at
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the side of reducing a negative behavior.
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Right.
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Like stopping smoking or, you know,
stopping the number of desserts you eat.
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So it's possible in those domains,
if you get a little bit of
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of a taste of it,
maybe it's a negative component.
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I haven't searched that that side yet.
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So is is that kind of the next natural
step in your research?
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Yeah. You go to to look at that area.
Yeah.
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That's something
I'm definitely interested in
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and looking at is kind of
are there boundary conditions, right.
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Like are there domains where maybe
it doesn't work as well or backfires?
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So far I haven't found them,
but I haven't looked at kind of these
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especially addictive.
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I mean,
I honestly don't think I could study
00:13:43
those because it
00:13:44
might be potentially harmful,
but that is an area I'm interested in.
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What do you think then?
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Is it off of this research to the message
that if you could deliver to the public,
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what do you think
is is the message to think about people
00:13:57
who are going through this process,
who are going through these goals
00:14:00
and thinking about this component
of an emergency reserve?
00:14:03
Yeah. What's the message you say?
00:14:04
Yeah, I would say think about
a challenging goal for yourself, right?
00:14:08
So something that's difficult to achieve,
00:14:12
have that and then give yourself
a couple of emergency days.
00:14:15
That's and you should be more effective
at reaching your goals that way.
00:14:19
That's fantastic.
00:14:20
Marissa, pleasure to meet you.
Thanks very much. Greatly appreciate it.
00:14:23
Yeah, thanks for having me.
Thank you. Great to have you with us.
00:14:26
Marissa Sharif, who is assistant professor
00:14:29
of marketing here at the Wharton School.
00:14:32
Thank you for listening
to the ripple effect.
00:14:34
We hope you found this episode
informative and engaging.
00:14:37
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00:14:39
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