Financial services are a drag.  Paying bills sucks. Sorting through the best products is no fun, given how many there are and their considerable complexity.  A mortgage?  Forget it.  Why is it that people can’t figure out how to make financial services interactions more fun?  Doing so needn’t be a loss leader, as lottery companies know well.

On my way to Atlanta a couple weeks ago, I was reminded of the power of lottery, right in the airport.  People are willing to face irrationally low odds for the chance to win a life-changing amount of money.  And it’s not just a couple people: on average $500 per household per year in America.  Considering that I know many people and zero of those households play the lottery ever, it means there are quite a few which play with $1000 or more in lottery (let’s ignore the multi-billion dollar gambling industry for the moment).  I bet most earn less than I do.

Behavioral economics is en vogue, with a legion of professors riding a titlewave of sexy ideas: University of Chicago’s Richard Thaler and his paternalistic libertarianism, Yale’s Dean Karlan has studied the cost of not making your goals, Harvard’s Peter Tufano started a nonprofit, D2D, that’s built a personal finance game.  All this work is based on the recognition that human behavior, not economic models or financial products, drive markets.  Unless we study human behavior, we’re modeling econs and building products for markets, not humans.

In any case, I think we need a spoonful of sugar to make the medicine go down.  Suze Orman does this nicely with her show’s “Can I afford this?” section, as a counterpoint to her entirely debt-averse mantra.  The prospect of paying off debt and reducing spending to the bare essentials for years on end is as dreary as it is unlikely – unless we can add some fun, offer some reward, or be a little playful.  People doing this are seeing results.