How behavioral economics can help your credit union during budget season

first_img 5SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,Melina Palmer Why do people say one thing and do another? What really drives behavior? How does the brain actually work – and how can we best communicate with it? What does that … Web: Details The holidays are upon us. Halloween has come and gone, some of us have snow on the ground, and most credit unions are up to their eyeballs in budget plans.Whether you are looking to reduce overall budget in 2020 or raise it, there is never enough money to do all the things the credit union would like to achieve. Budget season often feels like a game or a dance, but it is helpful when you know the rules. So, with that in mind, here are some scenarios and tips to use behavioral economics to your advantage this budget season.The Concepts – Relativity and Anchoring & AdjustmentThe brain has a hard time valuing one-off items, so comparison points are important when establishing value (relativity). This works hand-in-hand with anchoring and adjustment, in that the first number shared becomes an anchor-point that the future numbers work off of.A real-life example of this would be if you owned a small electronics store and wanted to start selling espresso machines. You find a great one and price it at $149, placing it on the shelf between a toaster and a microwave. Six months go by and while a lot of people look at it, none have been sold. Instead of discounting it or giving them away, the problem is one of relativity – you need a similar item of a worse value to show how great a deal you have with the $149 model. So, if you put one next to it that is twice the size and double the price at $300, the brain has an ability to see the two items in context and opt for the “introductory model” or “compact version” of the machine.With this in mind, let’s talk budget.Scenario 1: Asking People to Reduce RequestsAsking people to cut budget is never fun, but it is often necessary. Let’s say a department had $1 million last year and you need to cut overall expenses by 10%. Sending out the request in this way will encourage people to look for spots to cut a little here and a little there, which can make an overall strategy much less effective.Instead of asking them to “cut by 10%” which makes people look at what they asked for in the past, consider asking them to start from zero and build an ideal plan of what they would do if they had $750,000-$900,000.Two reasons why this is better:It sets a lower anchor of $750,000 and has the topmost number at the spot you are hoping to reduce to.This helps people get out of the “what we did last year” mentality and start fresh. They are now able to evaluate what worked and didn’t, remove any sacred cows that might be lurking, and shine a light on the whole budget. There are likely more unnecessary expenses than meet the eye.Scenario 2: Requesting More Budget If you are on the other end of the spectrum – the head of a department asking for funding for your projects – it can feel like an uphill battle sometimes. In most cases, the way you present the request matters more than the numbers themselves (framing). You can use the same concepts of relativity and anchoring to further your cause.When making a request that is higher than what you have gotten before, you are working against a low anchor (the opposite of the problem in scenario 1). It is your goal to reset that anchor before getting to your request.Let’s use the example of getting budget to attend a specific conference or training that is more than what your department has used in the past.If your budget has always been $1,500 and you found something truly valuable for $2,500, it is best to do a little more research and find something above and beyond that number. Say, if it would take two or three other trainings to make up the value of this item and they together add up to more than the $2,500, or if there is a similar program that is more expensive and would provide a lot of the same value, but keep you out of the office more.You could then say, “The credit union has identified a key goal for me and the department is to increase knowledge in innovative lending solutions to help increase revenue by $100,000 next year. I have done research and found two trainings that will accomplish this goal. The first is $5,000 and will provide X, Y and Z skills. I continued to dig deeper and found another opportunity which will cover X and Y, which are foundational for the task at hand, and it is only $2,500. This seems like the best investment for the credit union, do you agree?”A couple of things to note there:The $100,000 is both a high anchor (even numbers that are completely unrelated can impact the brain) and it shows the relative value to the credit union for the investment in the training. $2,500 compared to the previous training budget is a huge increase, but when it can provide an extra $100,000 in revenue, it is easier to understand the value.The $5,000 conference is a second high anchor and relativity point, which shows you did research and continued to have the best interest of the credit union in mind. This little bit of extra effort shows a lot of understanding and can make all the difference.As you continue through budget season, there will be plenty of opportunities to use these skills, and they apply in other areas of life as well. In any scenario, remember to:Understand the existing anchor and which way you want to move the conversationAlways have at least one comparison point, but no more than threeFrame the message around the value and what is important to the person you are communicating withHappy budgeting!last_img read more

Cycling hit hard by coronavirus as races cancelled and teams pull out

first_imgIneos, also citing the death of sports director Nicolas Portal as a reason, will not take part in any race until March 23, so defending champion Egan Bernal, last year’s Tour de France winner, will be absent from the Paris-Nice stage race starting on Sunday.Mitchelton-Scott will not race at all until March 22.The European Cycling Union (UEC) said on Thursday that the BMX European Cup rounds in Verona on March 28 and 29 would be postponed.Paris-Nice organizers ASO have invited two teams, B&B Vital Concept and Circus Wanty Gobert, to make up for the withdrawals, also allowing eight riders per team instead of seven.With a peloton forming a 180-rider pack, riders sharing rooms and team buses, drinking from bottles prepared by team staff and often being close to fans, cycling is considered to be a sport in which the virus can spread easily.Most of the top races in March are being held in Italy, where more than 3,000 people have been diagnosed with coronavirus and over 100 have died.  Topics : The coronavirus outbreak continued to take its toll on cycling as teams withdrew from racing and organizers started to cancel events on Thursday.Race organizers in Italy, the European country most affected by the outbreak, said on Thursday they were cancelling Saturday’s Strade Bianche one-day race after Rome decided to hold events without fans.”RCS Sport will request the UCI [International Cycling Union], via the Italian Cycling Federation, to allocate a new date on the international cycling calendar for Strade Bianche and Strade Bianche Women Elite,” RCS said in a statement.center_img RCS has not yet said whether the Milan-Sanremo major classic and the Tirreno-Adriatico stage race – both scheduled for this month – will go ahead but some teams have already pulled out.”We have chosen to protect the health of our riders and staff and to take our responsibility for the society in not further spreading the virus,” said Astana manager Alexandre Vinokourov, whose team has withdrawn from racing until March 20.Team UAE Emirates also said they would not take part in Tirreno-Adriatico, Milan Sanremo and Paris-Nice while French team AG2R-La Mondiale said they would not participate in Italian races in March.Australia’s Mitchelton-Scott, Dutch outfit Jumbo-Visma, France’s Groupama-FDJ and Britain’s Ineos had already pulled out of at least the Strade Bianche race in the Siena province.last_img read more

Man busted for impersonating an officer

first_imgRushville, IN—A Rush County man was arrested on an accusation of impersonating a police officer.According to the Rush County Sheriff’s Department, someone called dispatch on June 27 to report a possible police impersonator that was trying to make a traffic stop.The car looked similar to a common police cruiser. The caller followed the vehicle after the initial encounter and reported the location to dispatchers. Deputies stopped the car on State Road 244.Deputies stated the vehicle did look like a police car. When they searched it, they found numerous police-related items, including a badge, and a firearm. The driver, David Duncan-Hobbs, 28, was also wearing a shirt and baseball hat with the word “sheriff” on them. Deputies arrested him on one count of impersonation of a public servant.Rush County Sheriff’s Department said the citizen who called about Duncan-Hobbs knew something was wrong and called 911, allowing deputies to locate the suspect and his car.Police remind citizens that anyone who finds themselves in a similar situation should call 911.last_img read more