Q&A with Abby Davisson, coauthor of Money and Love: An Intelligent Roadmap for Life’s Biggest Decisions
Yes, even when it comes to love, we should be striving for more rationality in the decisions we make
Abby Davisson is a social impact leader, career development expert, and coauthor (with Stanford professor and labor economist Myra Strober) of Money and Love: An Intelligent Roadmap for Life’s Biggest Decisions, which came out earlier this year. It is available in hardcover, e-book, and audio formats. You can find out more about the book on the authors’ website, MoneyLoveBook.com.
Thinking in Bets is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
Pushback Against Rational Decision-Making in Matters of Love
Annie: A big component of my books is the idea that decisions are, at their core, calculations of expected value. You’re thinking about a range of possible outcomes, their probability, and the payoffs and costs of any option you choose. The goal is to choose the option with the greatest expected value, taking into account what you value. When I was promoting Quit, people pushed back on applying expected value to decisions about relationships: “You can't apply the idea of expected value because those are matters of the heart. They are fundamentally different” What’s your response to that kind of pushback?
Abby Davisson: I find it fascinating, but not surprising, that you got pushback about the concept of applying expected value to love relationships. I think it is evidence that, while we are accustomed to being practical when it comes to financial matters, we still want to hold onto romantic fantasies when it comes to love. We push back against applying a pragmatic approach to our romantic relationships - even though many relationships end when our dreams bump up against reality.
The truth is that a decision about spending your life with someone is both about the matters of the heart and the matters of the bank account. We have to recognize that they have an element of both, because it is a very holistic decision. We are trying to get ahead of that because there is such powerful conventional wisdom and cultural messaging that we need to ignore those factors when that's absolutely not what we should be doing, particularly as women, who have historically been on the end of not being advantaged by all of the financial matters in a heterosexual relationship.
Annie: How long ago was it that a woman couldn’t have her own credit card?
Abby Davisson: Women were first able to get credit cards separate from their husbands in 1974, thanks to the passage of the Equal Credit Opportunity Act. My coauthor Myra Strober started teaching the class that inspired the book in 1972, and it was very much born out of her personal experience. Her professional aspirations to become a professor on the tenure track were bumping up against her personal decisions to have children and to follow her then-husband to California for his job, even though they both had doctorate degrees.
She realized that this was not being discussed. There wasn't even research in economics about it. She had to piece together interdisciplinary research across all these other genres just to have class materials. Then, it became a very popular class at Stanford because there was clearly a need for this type of discussion.
Marriage: Your Most Important CAREER Decision
Annie: One of the things you say, and I hope that I get this right, is that deciding to get married or who you marry is the most important career decision that you'll make in your life. I think that's very counterintuitive to people. Can you explain what you mean by that and why that message is so important to get out?
Abby Davisson: We’re certainly not the first to say it, but you're right. We are taught think that romantic decisions are separate from financial decisions and your career. Let's say you meet and get married early in your career, so you're both on equal footing. But then, a few years in, you have kids. There are all these micro decisions that are built into the way our society functions, the invisible pressures, gender bias that result very often, again in heterosexual couples, with woman ending up with an absolutely disadvantaged career and the man's career being aided by the fact that he has a partner who's doing all the things on the home front.
People underestimate the cost of parenthood - not just in terms of the money and time it takes to raise children, but the impact on their careers. The mismatch is greatest for college-educated women in heterosexual relationships who invest in their education and career and then are caught off guard by the impact of having children on their career. Research shows that women are three times more likely than men to quit their jobs to take care of a family member.
There are many policy changes and cultural shifts needed to change that statistic, and it will likely take some time. In the meantime, it's imperative that people talk about their career ambitions alongside their family ambitions early on in a relationship and seek a partner who's supportive of those career ambitions, if that's important to them. It takes a very deliberate set of choices together as a couple to say, “No, both of our careers are going to be equally advantaged.”
One of the reasons we wrote the book was to be able to share this message. When I took Myra’s course, I was in my late twenties, dating someone I later married, and was able to have these very real-time conversations. I had ambitions for my career and my family life, and I didn't want to have to compromise those to put someone else's career ahead of mine. We were able to make sure we were on the same page about that very early on in our relationship. It has played out over the last fourteen years in a positive way for both of us. I think that could have been very different if I hadn't had this awareness as a result of taking the class and having these conversations.
A Framework for Love-and-Money Decisions: The 5Cs
Annie: You have a great framework for guiding these tough conversations about about love and money, “the 5Cs.” Before we get into the specifics, could you start by summarizing what the 5Cs consist of?
Abby Davisson: Sure, but I’d like to zoom out for a minute and talk about why we have a framework in the first place. It was not originally a part of the course. It was something that Myra and I came up with together in the process of researching and writing the book. It's because one of the biggest mistakes that people make about money and love decisions is making them too quickly. People use what Daniel Kahneman calls System 1 thinking as opposed to System 2 thinking. The framework is designed to help people slow down and turn over the rocks that they need to turn over in the process of making decisions.
These are the 5Cs:
Step 1 is CLARIFY. Consider what you want vs. don’t through self-reflection.
Step 2 is COMMUNICATE. Include input from those who will be impacted by your decisions in your decision-making process.
Step 3 is CHOICES. Broaden your perspectives to open up your options.
Step 4 is CHECK IN. Ask around for advice, guidance, and resources.
Step 5 is CONSEQUENCES. Consider the effects of your decisions and how that may impact all aspects of your life.
Step 1: Clarify
Annie: Let’s dive in. Step 1, which is Clarify. Does that go back to the idea of expected value, especially that what any person values might be different?
Abby Davisson: Yes. The first C is to clarify what is most important to you, tapping into your core values. I think this is the hardest of the 5Cs but possibly the most important. If you get that right, then everything else flows more easily. But it’s really difficult because of mimetic desire, that our wants are so influenced by what other people want. Clarifying what’s important to you is a very individual exercise.
You can do that in a number of ways. There are lots of exercises that you can find online. One of the ones that I like is about paying attention to what you have an outsized emotional reaction to when you read it in the news or when you see it somewhere. That reaction can mean it's hitting a nerve that is connected to one of your core values. If you're reading about how a man and a woman get paid differently for doing the same job, it could mean that equity is a core value of yours and that's violating that core value.
Step 2: Communicate
Annie: I have some questions about Step 2, but you should probably introduce it before I get into them.
Abby Davisson: The second C, Communicate, comes into play because we are not making decisions in a vacuum. There are other people in our lives who are important to us that are going to be affected by these decisions. The second C is all about communicating with them, sharing what's important to us, what we're thinking about.
Annie: Given that people aren’t having these conversations and there are barriers enforcing that reluctance, how do you suggest getting started?
Abby Davisson: There's not only a big taboo about talking about money in our society, but there are no models for this, unless your parents happen to be very candid and transparent about how they made these types of decisions, which for many of us - certainly not for me - was not the case. You don't have a Netflix series where the couple dates and falls in love and reveals their educational debt to each other.
Often, wedding planning can be the time where couples first talk about money because there is a big price tag attached to the day. One of the things we try to encourage is to find those other moments that are natural touch points. Say, before you go on a trip with someone, that could be the time where you say, “Hey, we're about to travel. We're going to spend some money on a place to stay, things that we're doing on our trip. Can we have a conversation about money? I don't know the money stories that you might have in your head. We all have them. Let's have a financial date.”
A financial date can be fun. It doesn't have to be this heavy thing. Open a bottle of wine, talk about your earliest money memories. We have lots of questions in the book to get these conversations started.
Annie: I thought it was interesting what you wrote in the book about the importance of the physical location of these conversations.
Abby Davisson: The communication step is not just about what you are going to say to them, but where you're going to have the conversation and then how you're going to really listen to what they say back. We talk about making an appointment for these types of conversations, not bringing them up when you're brushing your teeth, about to get into bed for the night, or when you're trying to get the kids out the door in the morning.
These are conversations you would have with a manager. You want to have a good time for both of you. You want to find a time that you could get out of your house. One of the things my husband and I do is have these conversations on hikes because we find that when we are out of the day-to-day chaos with the laundry piles and the dishes in the sink, we think more expansively. The setting really matters for the communicate step.
Annie: In the book, you compare the first two steps - clarify and communicate - to a dance. Can you explain that?
Abby Davisson: You clarify, then you share what's important to you to the other person. Then, they communicate with you what they think, and it’s like a DNA strand. You might be changing your mind based on what they say. There's an iterative element. They’re not a one-and-done.
And because you do repeat the conversation so often over time, it's like building a muscle. If you start the experience having these uncomfortable conversations with a trusted, sturdy framework as a guide, then it gets easier. Those conversations become more of a habit and less of, “This is really nerve-wracking to start to talk about my deepest darkest feelings with this person.” You have the shorthand. That’s why this was so powerful for me because my husband and I did it together in the class, and then it has been something we have just started relying on as our vernacular in our relationship. It doesn't feel as fraught as those early conversations did.
Step 3: Choices
Annie: Step 3 is about considering a broad range of choices. For some of the decisions involved, like marry-or-breakup, we think about that as a binary. Let's say we're butting up against that choice. What would be a broader range of choices we could consider?
Abby Davisson: When we are in those heightened emotional states, we have tunnel vision, we see only the extremes. There are so many solutions that could be in between those two extremes, but it takes some creativity and the ability to have more of the “both-and” thinking to start coming up with solutions that will allow you to get closer to what you want without going to one of those extremes, which often are suboptimal outcomes for you.
I can give you an example from my own life. When I started dating my now-husband, I knew that it was going to get very serious very quickly, and I was not feeling ready for that. I said to a friend, “I'm not sure I'm ready to commit to this guy for the rest of my life.” And she said, “Okay, could you try it out for a month?”
Think about it as probation. You're trying it out for a month and after that month you'll have more information and you'll maybe be able to make a better decision about if you want to continue for another month. You're not trying to decide the rest of your life right now.
I had this in my mind, this month of seeing how this went, and it went really well. It happened that we went away for the 4th of July, and that had been the end of the month. I remember waking up and telling him all morning all the things I loved about him and how amazingly this month had gone. He was like, “This is great, but where is this coming from?” He had no idea that he was on probation for a month, but in my mind, it was like that month had gone so well. You can have something like that.
Another example is we wanted more space during Covid. Like so many people, I was Zooming from my boys' bedroom with bunk beds behind me, working every day with Lego bricks under my feet. We got locked into this the idea: “We need more space. We have to move.”
Instead of moving, I ended up renting an office. I now have a seven-minute commute to a place where I rent, and that serves as a place I can do my work. That doesn't involve moving and that extreme, but it did end allowing me more space, a place to go, because I don't do my best work at home. I get very distracted by all the things that need to be done around the house. That was a way to generate an additional option that I didn't see right away.
The fourth step, Check In, can be helpful for developing more options and information about them.
Step 4: Check In
Annie: Your explanation in the book about the Check In really resonated with me. It makes the case for the importance of getting the outside view. What are some ways to check in with these decisions?
Abby Davisson: Depending on the type of decision, there are different ways to check in. You can start to talk to other people, friends, family, trusted resources that have either gone through that situation and had an experience that they can share with you, or you start to see creative things that other people have done.
Of course, there are things you may not want to share widely. For example, if you are trying to decide about having a child or having another child, that's a deeply personal decision. You may not want to share that with many people. You might want to find a few trusted friends whose families or parenting styles you admire or who have made a decision one way or another, and ask them, “Help me understand how you approached this decision.” You're trying to get their insight into how they approached it as opposed to advice to tell you what to do. Because again, they're going to have made that decision based on their values and things that might not be exactly the same as yours. But you can start to get insight.
You can also look at published studies. If you're looking for a new job, there's lots of research about the importance of weak ties, so you do want to check in very widely about that type of decision.
One of the studies we looked at when we were trying to decide whether to move and I was researching the moving chapter was the study in the Journal of Environmental Psychology which talks about density, the square footage per person, and its connection to family harmony. It was very interesting because we thought, “Oh, we just need more space.” But actually, there is a point of diminishing returns. Having too much space can make young kids feel disconnected and lonely, especially boys, which is what we have. We also talked about how the family's perception of space matters much more than the actual square footage. Those were interesting inputs as we were thinking about this decision. It wasn't just talking to friends who had moved, which we also did. The check-in and the choices steps go together because the checking in can help you generate additional solutions or new data that you hadn't seen at first blush.
Annie: When we're talking about checking in, I assume this is something that sometimes you would be doing individually and sometimes you might check in as a couple.
Abby Davisson: Yes. If there are two people involved in the decision, then I think it can be helpful to check in as a couple and check in individually. Again, this is meant to be a sturdy but flexible framework, meaning you can apply it to a variety of decisions. There might be times where you say, “You check in with these resources and I'm going to check in with these other resources, and then we'll come back and talk about what we learned.” Or you might say, “It’s important to me to have the same information coming to both of us. Let's do these check-ins together, and then we'll have a conversation about what we learned from those.”
Step 5: Consequences
Annie: Then we get to the last C, Consequences, which completes the expected value equation with, essentially, making a forecast. Can you talk about the fifth C?
Abby Davisson: We have a very powerful short-term bias. We are very good at seeing the close-in consequences and not so good about seeing the medium- and long-term consequences. In this step, it's about making sure you're thinking through the positive and negative consequences in different time horizons so that you're overcoming that short-term bias and realizing that some of the things that you might see as negatives are really only short-term negatives. Like in moving, so many short-term negatives are with the logistics and boxes and meeting new people. But long term, it could be a great way for you to have a better school system or be closer to family or all the reasons that people make those decisions to move.
Annie: We talked about, as part of the Check In, ways of gathering information for these decisions. And, as part of Choices, about making “trial” decisions to learn about your preferences. This brings up a subject I love hearing different views and experiences on: Using decisions themselves as an information-gathering method. Can you share additional ideas or examples about doing that?
Abby Davisson: The element of design thinking that we modeled for forecasting consequences is to do experiments. You start to approximate the consequences. It's not just a mental forecast. You can actually prototype, experiment, and get information without jumping in with both feet. With the moving example, could you rent a place for a couple months so that you are there through multiple seasons and you experience different types of weather, so that you're not making a decision like I did about where to go to college, which was New Haven, on a beautiful day in the spring, and then you realize, that's actually an anomaly.
Annie: How do we make it so that we're getting the most information possible out of “smaller” decisions? By smaller, I mean lower in consequences, like using dating to make more informed decisions about choosing a life partner, or using renting to figure out where we want to live.
Abby Davisson: You have to go in with the knowledge that you are trying to get additional information. To your point about dating, there's a honeymoon phase. There’s this time where you just see stars in your eyes when you see the other person. Whereas, if you fast-forward and you're building a life together over decades, you have to have a lot of boring, frustrating, difficult conversations with them. You have a kid that has a significant medical issue, or you have a family member that is constantly disappointing you in some way and you need to talk to them about it. There are all these experiences when you build a life with someone that are challenging, and if you only rely on the information that you have in the honeymoon phase when everything is going well, then it's very difficult to gather information about how you are going to be able to get through those challenging moments together.
The reason we say, “have these difficult conversations before you feel ready,” is that it starts to reveal if you're on the same page about things you might have assumed you were, or if you have completely different views. What are our priorities on saving or spending money? Where do we want to live? It’s better to get those out in the open now than when you decide to tether your lives together more significantly and then realize, oh, we forgot to talk about this. You’re trying to approximate the conditions of a multi-decade marriage without being able to experience that. Often, those things are difficult flashpoints that are charged that are, again, where money and love bump up against each other. How do you reveal those through conversations rather than through experience, when it's too late to do anything about it other than something more extreme like divorce?
Annie: We’ve talked mostly from the perspective of improving your chances of having a mutually satisfying and fulfilling lifelong relationship. What about using the tools in your book in a relationship that ends in a breakup or divorce? Can you briefly talk about the value of finding out when things are NOT going to work out?
Abby Davisson: These are high-stakes conversations, but the stakes only get higher as you intertwine your lives legally, certainly when you have children, if that's something you do. For many years when Myra Strober was teaching the class, she would get emails after the class ended, saying, “Thank you so much for the class. I'm sad to say that as a result, I broke things off with my long-term partner.” She would say, “I'm so sorry for your heartbreak. I'm sure that's difficult. It’s so much better that you know now that you were not on the same page about some major life values than later on in your relationship.”
Myra is divorced, and she talks very openly about how they had made some assumptions about the way that relationship would be that ended up not bearing out in the long run. They had reached a point where they wanted different things and they had decided to divorce. But what is important is, again, to clarify what's important to you about that decision. For them, it was to maintain an amicable relationship so that their children never had to pick sides. Even in the dissolution of a relationship, you can have a shared value of maintaining a certain way of divorcing so that it is not a burn-all-bridges-at-all-costs experience for everyone. She talks in the book about how they ended up eventually having Thanksgiving together. Their children, despite having divorced parents, grew up only ever having to go to one Thanksgiving meal. That was something that was she and her ex-husband were really proud of.
The Role of Compromise: A Possible Sixth C?
Annie: I want to get your thoughts on compromise. We know what's important to us. Now, you find out that you have conflicting values, but if we have conflicting values, that doesn't necessarily mean that we shouldn't be together because there might be other places where our values closely align that are also very important to us. Would you put this as part of considering a broad range of choices or would you think about compromise as its own thing? I'd love to hear your thoughts on that. Additionally, what are the things that we are supposed to compromise on? What are the things that we're not supposed to compromise on?
Abby Davisson: That’s a great question. I think compromise comes out in the Communicate step. It is about two people who have clarified their values as they're communicating. Are they able to reach a solution that feels okay to both of them? It doesn't have to feel great, but it has to feel fair, and it has to feel like they can live with it. It could be about generating an additional choice. It could be about one person saying, “I'm willing to go with your choice for a period of time.” But then, which people often do in careers, “Okay, you get the next five years to work on this startup. If it doesn't go anywhere, then let's agree that you're going to put that aside and we're going to prioritize my career.” It doesn't necessarily need to be a new choice. It needs to be a solution that, again, feels equitable to both people.
I love the idea of making it more visible because so many of these things do end in compromise.
Becoming a Change Agent, a Tempered Radical
Annie: Our conversation about Money and Love has mostly been about ways readers can improve their individual decisions. But because we’ve also touched on institutional and societal barriers to making these decisions well, could you share how, in the last chapter, you discuss the public importance of these issues?
Abby Davisson: The last chapter of our book, which is about being a change agent and a tempered radical, is important to us. We could have easily stopped the book and not included that chapter, but we did because we realized that it's not enough for everyone to make these money and love decisions individually. The reason why so many of these are so challenging is that our money institutions are not very good on the love front. We need to push against those cultures and policies and laws so that hopefully future generations have more ability to make these decisions so there aren't such acute trade-offs when it comes to combining a career and a family and priorities outside of work.
That’s something that I feel strongly about. Both my coauthor and I have been tempered radicals in respective ways. She started the Center for Gender Research at Stanford, and I started the employee resource group for working parents at Gap Inc. We think that it's important that everyone see themselves as having the ability to be a change agent so that we can shift the way a lot of our societal constraints are operate.
Annie: We’ve talked about some institutional and societal constraints in the past, like banking practices, that obviously needed to change to accommodate the way that society was changing. Can you give some current examples of ways in which institutions are making these decisions difficult? What are things we could change for the better to make these decisions easier?
Abby Davisson: There’s all this data about if men take paternity leave, how it has really beneficial outcomes for not only children but for the family. Men are able to bond and feel like they can actually take care of their kids. First of all, companies need to offer parental leave for everyone, not just the birthing parent. Then, senior people in those companies need to model taking it. It’s not just enough to have the policy in place. It needs to be a cultural practice of the institution that you're not going to get dinged on your performance review if you take the full leave that's allowed for you. That’s an example of, “the policy is great, but it's not enough.” It's necessary but not sufficient because you need the modeling as well.
There are a whole host of other examples like that. I think childcare is particularly interesting because it's literally the flashpoint of money and love. We had so little infrastructure before the pandemic, and then the pandemic amped up the crisis when it comes to having affordable, available childcare in so many places. This is such a reason that women in particular are not able to go full throttle in their careers because of that lack of affordable, available, quality care.
Annie: So, parental leave and childcare. Clearly, important workplace and public policy issues. Anything else we should be addressing?
Abby Davisson: How about the fact that we still have summers off at school? From the agrarian society we once were, we now have ten weeks that people have to scramble and figure out how to get their kids in all these camps that you have to register for the second that the registration opens or not have a slot for your kid and have them be home and bothering you and all the things that we all had to do when schools shut down. The fact that we still have that set up in our society is absolutely antiquated and a huge way that our institutions are hampering our ability to succeed in careers.
A New Venture: Helping Third-Party Professionals Maximize Their Role
Annie: I know we share the view that it helps in decision-making to get the perspective of a third-party expert. From our emails before this Q&A, it sounds like very recently - since Money and Love came out in January - you’ve started doing some work helping professionals who are in a position to assist people with these decisions. I’d love to hear about that.
Abby Davisson: We're big fans of engaging third-party experts: couples’ therapists, financial advisors, career coaches. They are disinterested third parties. They're not in the thick of the decision that you are making, but you're engaging them as professionals to see if they can shift the dynamic in some way.
On a personal level, I’m familiar with the research, as I imagine you are, that one of the things that people regret are the experiences that they didn't have. It's not the risks that they took, but it's the risks that they didn't take. I had been working full-time in my job, where I'd been for about nine years, while I was writing the book. I knew it was going to be very difficult to promote a book while maintaining a full-time job. I ended up leaving about a year ago.
One of the things that I had always had in my mind is seeing if there is interest and traction as we're sharing about the book in going deeper and creating a business around this. If there’s something there, great. If not, I can always get another job.
One of the lovely things that happened as part of our book tour was that people would come up to us after talks and say, “This would be so helpful in the work that I do with clients.” There were three groups of people. There were financial advisors who people come to with money issues, but there are all these love and relationship conversations that are underneath those money issues. There were therapists on the other end of the spectrum who people come to about love issues. But again, there are financial conversations that they're not given any training to facilitate. And then there are coaches, particularly career coaches, who are helping people design, especially in this pandemic-adjusted world, the combination of money and love that their clients want in their lives. They appreciated the ability to have more holistic decisions with their clients based on the book.
So, we've just launched the Money and Love Institute designed to help people make more intentional decisions and give tools and frameworks and techniques to those groups of folks who are going to help people go deeper in their lives. We’re starting with financial advisors and doing some fun pilots right now. This is definitely something that I knew, if I did not leap at this opportunity, I would regret. I've applied the framework and worked through this decision in my mind. It’s very exciting.
Annie: That sounds like a wonderful idea, and an important service to provide. Thank you for sharing so many great insights from Money and Love.
Thinking in Bets is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.