Tag: Critical Thinking



Cynthia Cryder

It’s National Financial Awareness Day—and we see it as our duty to bring you the best financial and business-related news today and every day. So pull up a front-row seat to this exclusive, free personal finance training, brought to you by associate professor of marketing Cynthia Cryder.

Why it matters

It’s easy to think of financial awareness as something that’s best left to the experts – but Cryder, whose research on personal finance ranges from the psychology of debt to the practical details of how we spend money, says that’s a big mistake—and one that could cost you emotionally as well as financially. Though she’s an expert in consumer decision-making and personal finance, Cryder defines financial awareness as “being deliberate about your finances and making a plan.” That means staying one step ahead and being ready for the next major or minor disaster – because it’s going to come.

Cryder says being aware of your finances and having a plan to save, reduce debt, and think about the future is crucial because of the sheer nature of how we react to money. In fact, Cryder says people in the United States cite financial stress as more difficult on them than health, job, or any other kind of stressor.

“It seems like not having emergency savings is one of the most stressful things, because most families and individuals have a financial shock every year,” Cryder explained. So getting your finances in control and knowing where you stand is about more than counting checks—it’s about a happier, healthier you.

Rethink saving

One of the most frequent roadblocks Cryder finds to helping people become financially well is a misunderstanding of the nature of savings—and emergencies. “The idea that the only type of savings is for the distant future, like education or health savings,” does the consumer a disservice. That’s because emergency spending should be a top priority, according to Cryder.

Why do we have such trouble thinking of saving up for the short term? It has to do with the kinds of financial emergencies we face and the way we compartmentalize them. “We see isolated expenditures as just that: isolated,” said Cryder. “So we think that we’ll never have that financial shock or expenditure again. And that may be true, but we’re bad at then understanding that we are going to have another unusual type of isolated shock or expenditure.”

So when we rationalize that a car breakdown isn’t likely to happen again in the near future, we forget to save for things like a health emergency, or a home repair. Rethinking the likelihood of an “exceptional” event happening, and understanding that you’re going to face one each year, is one of the keys to being truly aware of your financial situation.

One step at a time

Once you’re aware of the state of your savings and you’ve decided it’s time to reduce financial stress in your life, Cryder suggests a few simple ways of moving toward stability.

First up: Figure out what needs to change. “It’s about deciding what is important to you as a person and as a consumer,” she says. Assuming your finances are stressing you out, you’ve got two options: make more money or spend less.

That might take the form of getting an extra job on the side, or taking in a roommate or two to help with expenses. Or it could be as simple as tracking your expenses for a month, seeing what adds up and what could be cut to make room.

While that might seem easier said than done, it’s a crucial decision to make if you want to get rid of financial stress. It’s also the key to steps two and three: pay down those debts and start an emergency fund.

When paying down debts, Cryder recommends starting with the most expensive—think payday loans, credit cards, and anything above 10 percent APR. While that might seem obvious at first glance, Cryder and her fellow researchers have found that many consumers are actually more likely to tackle the manageable, lower-interest rates first. “It’s not entirely obvious that people shouldn’t be doing this, because it’s possible that people get a great satisfaction from clearing something off their plate,” she said. But keep in mind: the longer you wait to pay down those expensive loans, the more debt you’re accruing.

Once your debt is under control, an emergency savings fund is a must. Thinking about spending crises, Cryder warns that “these things keep coming up—and we keep having to deal with them.” So putting away some money with the expectation that you’ll spend it on an emergency will make you better equipped to handle that situation when it happens.

Become the best you

At the end of the day, everything Cryder does is about the consumer. She believes the goal of financial awareness is to “improve consumer well-being.” She wants to help consumers “reduce financial stresses and improve outcomes in terms of finding a good match between how they’re spending their money and how they’re finding satisfaction in life.”

In short: a financially aware you means a happier, healthier, and more satisfied you—and making life safer, better, and more comfortable for everyone is what Cryder—and financial analysts—are all about.




Riana Nigam, BSBA ’19, wrote this for the Olin Blog. She was the recipient of an award to study abroad from the Glazer Global Learning Fund. 

It is the last day of my study abroad program, so naturally it feels like an appropriate time to do some reflecting. Over the course of the last four months, I feel like I have accomplished so much.

I have lived alone in a foreign country, I have organized trips and navigated new cities, I have learned about other cultures, I have taken interesting courses at a reputable business school in Europe, I have tried new foods, I have discovered things about myself, and the list goes on.

One of my most memorable experiences abroad pertains to a group project that I participated in as part of my operations management course at ESCP Europe, the French business school.

The project entailed selecting any business in Paris, visiting the sight, conducting an interview with the manager and analyzing and evaluating different dimensions of the business’s operations in a research paper.

My group consisted of three American undergraduate students and two Italian master’s students, so it was both a wonderful growth opportunity and immense challenge to recognize similarities and reconcile the differences in our cultural backgrounds and experience levels.

For our business, we selected an Italian restaurant called Marzo, located in Saint-Germain, a more upscale area in Paris.

I particularly enjoyed visiting the site during off-hours and gaining interesting first-hand insights from the restaurant’s manager regarding supply chain management, menu construction, consumer perception and several other topics.

It was not only a unique experience to be able to understand one aspect of the business environment in another country, but it was also greatly rewarding to present our final conclusions and recommendations to the restaurant itself.

After receiving welcoming feedback from both our professor and the restaurant, my group and I felt that we had achieved something meaningful and impactful. Most importantly, though, my friends and I managed to dine at the restaurant during our final week and it was worth every bite!




How many memberships does RISE Collaborative Workspace have to sell to reach its break-even point? Is is 152? Or 132? Or closer to just 40? It was one of the problems undergraduate business students grappled with in Michael McLaughlin’s “managerial accounting” class last week.

In fact, dozens of them grappled with that and numerous other questions. Three sections of the class, in teams ranging from four to eight students—144 in all—honed their newly formed analytical skills on Stacy Taubman’s real-world business, a women-focused, women-owned co-working space in its first year of operation.

Taubman opened her books to the class hoping a fresh collection of new eyes would uncover new insights into her business, demonstrate support for a planned expansion—and offer a great learning experience for students.

“Theory and practice are often very different,” said Taubman, who, with her team, sat through three sets of presentations from students who had dug into the numbers. “I just wanted a set of really smart eyes taking a look at what we’re doing.”

As it turns out, Taubman said, the third team of 48 students was closest to the real break-even point, but the specifics weren’t really the point.

“Having the opportunity to work alongside a real client in the industry made the material more enjoyable and engaging,” said Ariana Phillips, BSBA ’19, who is majoring in finance and Spanish. “Not only were we able to improve our teamwork skills, but we were also able to network with RISE professionals while better understanding their business model.”

Students dug into a variety of financial components to Taubman’s business, producing analyses of its variable and fixed costs, cost-volume profit, sales and expense budget, most profitable membership types, and a planned expansion to Denver.

Taubman was up-front about her lack of business credentials. Still, RISE is her second startup: She launched a tutoring company in 2013 while still teaching. She said the exercise with McLaughlin’s students gave her comfort that she was on the right track and that the expansion was worth pursuing.

“We wanted this to be real to students,” said McLaughlin, who had been friends with Taubman and knew of her interest in opening up the books for students.

“Our involvement in the RISE project was the quintessential way to apply the accounting knowledge we had accumulated over the course of the semester and actually see how and where it is used in the workplace,” Phillips said.

Pictured above: Student Alissa Geller, BSBA ’20, presents to Stacy Taubman, in the dark dress, center, front row.


In an earlier blog post, we shared information about the launch of the “Men as Allies” initiative by Olin Women in Business. This video features Julie Kellman and Gheremey Edwards, both MBA ’19, as they describe the reasons for starting the initiative, strategies for serving as an ally to women in the workplace, and their excitement for how well received the initiative was when it was launched in January.




Ben Kosowsky, BSBA ’20, wrote this post on behalf of Bear Studios LLC.

“Life can only be understood backwards; but it must be lived forwards.” — Soren Kierkegaard

Take a moment and think about yourself five years ago—or even just one year ago. Consider the day-to-day issues you were facing and your near-term worries. I would bet that you cannot remember most of your troubles. And even if you can, they are likely not the same as those that bother you today.

Contemplate your attitudes and outlooks and reflect upon how different they are from your current perspective. If you are anything like me, it borders on absurd to think that you were the same person who had those thoughts and took those actions just a short while back.

Now, recognize that much of what you are concerned with and think about today will likely seem petty in five years’ time—or even just one year from now. The appreciation that you always have grown and always will grow is certainly important, yet it is only the first step in orienting your mindset toward personal growth.

Before I continue, let me introduce myself. My name is Ben Kosowsky and I am a sophomore at Olin Business School triple majoring in finance, economics and strategy, and philosophy. I consider myself to be a growth-oriented person. What follows are some of the strategies I use to maximize my personal growth.

Self-Reflection

Self-reflection can and should be different for everyone. For me, the most successful strategies have been documentation, meditation, and rebuke.

I became inspired to keep a journal after an interview with a “brother” in Delta Sigma Pi during my pledging process freshman year. Since then, I have spent at least 15 minutes every night reflecting on my day, focusing on what and how I can improve.

At first, meditating even for five minutes was very hard for me, but I have now reached the point where I can meditate for 30 minutes at a time. This contemplative time has trained me to let go of unproductive thoughts, focusing intensely instead on critical matters.

Finally, the strategy of rebuke, derived from the Jewish concept of Tochacha, involves inviting your closest friends to criticize you and explain how you can improve. This requires a tremendous amount of trust, but hearing your flaws from those closest to you can open your eyes to issues that documentation or mediation won’t bring to light.

Openness

Throughout your life, the vast majority of your thoughts and beliefs have changed, and they will continue to change. To embrace the inevitability of this change, you should actively seek out new ideas by exposing yourself to as many different perspectives as possible.

Everyone has things you can learn from them and taking the time to listen will help you truly understand their vantage point. Realize that you already know any potential things you will say, so you can maximize learning and growth by listening to what others have to say, and then determining what is valuable.

Perspective

While it is critical to be open to new ideas, it is equally as important to not care too much about other’s perceptions of you. Reflect on how much you cared about what the cool kids in middle school thought about you, and how little you care about their perceptions now.

On a more macro level, realize that societal definitions of success are sometimes just as arbitrary as “coolness” was in middle school. Additionally, notice how large of a role randomness plays in life and allow yourself to take some of your accomplishments and failures with a grain of salt.

This should help you realize how important it is to live your life only according to your own value system and not according to anyone else’s.

Challenge

One thing most people try to avoid is the feeling of being uncomfortable. My objective throughout college has been to challenge myself with a set of goals that push me beyond my comfortable limits, while still giving myself a chance at success.

In my first semester at WashU, I challenged myself to join as many on-campus organizations and to take on as much leadership and responsibility as possible. In my second semester at WashU, I challenged myself to think outside the box in terms of my career path and began to pursue opportunities in growth equity, instead of a more traditional path.

Last semester, I challenged myself to eat meals one-on-one with as many people as possible in order to deepen my relationships. My challenges this semester have been to meditate, to work-out, and to read at least one hour of philosophy every day.

None of these tasks were (or are) easy for me, but the key to growth is pushing your limits by setting your mind to overcome what makes you uncomfortable.

Failure

Embracing failure is not about being content with losing or not caring about success; instead, it is realizing that every struggle is an opportunity for learning and growth. Everyone struggles through failures in life. Learning to deal with and bounce back from them is the true test of one’s character.

One way I think about struggle is through the lens of what I call Type 1 versus Type 2 situations. A Type 1 situation is one you enjoy during the moment and will remember as a positive experience. A Type 2 situation is one where you are struggling during the moment and will likely remember it as a negative experience.

If you train yourself to recognize the potential growth opportunities of a Type 2 situations while in the midst of one, you can focus on how you can learn and grow from the struggle instead of dwelling on the struggle itself.

These strategies should be continuous processes that push you and keep you from becoming complacent. If you make a “wrong” decision, don’t dwell on your mistake (the “right” answer always seems obvious in 20/20 hindsight), but focus on how you can learn and grow from it.

If you consistently learn about yourself through self-reflection, open yourself to new ideas, take other people’s perceptions less seriously, push your comfortable limits with challenging goals, and learn to embrace failure, then you are well on your way to achieving personal growth.

Guest blogger: Ben Kosowsky, BSBA ’20, is a triple major in finance, economics and strategy, and philosophy; he is a strategy fellow at Bear Studios LLC.


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