Wendy De La Rosa
The focus of most of my research is figuring out ways to help people make better financial decisions.
In 1998, at age 9, Wendy De La Rosa moved from her native Dominican Republic into her grandmother’s two-bedroom Bronx apartment with her mother and an ever-changing cast of relatives. Her mom, a psychologist, found work as a hotel maid, and during those tough years, De La Rosa became fascinated by the ways her complicated household managed its finances. It was the start of a career in which she’s trying to use psychology to improve spending and saving behavior.
The Wharton School graduate began her working life as a private equity investor with Goldman Sachs, but her passion for research led her to work with famed behavioral scientists Adam Grant from the University of Pennsylvania and then Dan Ariely, with whom she helped start the Behavioral Economics Group at Google.
“I came from a family that truly believes in social justice, and I wanted to explore how to fill that void. Honestly, it wasn’t until I paid off my student loans that I felt the liberty to explore that.”
That she was able to pay off those loans thanks to that brief high-earning gig at Goldman Sachs is remarkable in itself, and she followed her healthy fear of debt into a new realm. After helping Ariely launch Google’s behavioral economic research unit, she cofounded Common Cents Lab, a research organization aimed at improving the financial lives of low- to moderate-income individuals. Now 29, De La Rosa recently told Forbes, “I see my family in every single experiment I run.”
“Some people think average- or low-income Americans are making unthoughtful decisions. But all the research shows that when you’re living in a world of scarcity, you’re constantly thinking about your finances because you have to make these really hard trade-offs. And so whenever I design my experiments, I think: ‘If my family was in their shoes, what would they do? What would this trade-off mean for them?’ I would be lying if I said that I always wanted to research financial decision-making. I didn’t even know that was an option growing up. However, when I look back I can connect the dots, because money — and lack of money — was always a topic of conversation in my household.”
Her formative experiences pushed De La Rosa to search for ways to give average- and low-income Americans the tools they need to navigate a world in which they are barraged by inducements to spend, and many banks make money by encouraging people to overspend and borrow.
“The focus of most of my research is figuring out ways to help people make better financial decisions, whether it is by saving more or spending less. Marketers have become really good at helping people spend money through advertising. They want to optimize their marketing, and there’s nothing inherently wrong with that. But the curve at which they’re getting better at marketing is outpacing the curve at which average Americans are being equipped to defend themselves. Why haven’t we used the same psychological principles to help people save money?”
I came from a family that truly believes in social justice, and I wanted to explore how to fill that void.
While working at Google, members of her team brainstormed ways to use psychology and social science to help. Eventually, they got a grant of almost $8 million from the MetLife Foundation, and in 2015, they created Common Cents Lab to research and develop financial products that are helpful rather than harmful. To date, Common Cents has partnered with close to 60 organizations and run more than 80 pilot projects. De La Rosa credits her Stanford GSB advisors — Jennifer Aaker (the General Atlantic Professor of Marketing) and Itamar Simonson (the Sebastian S. Kresge Professor of Marketing) — with teaching her to balance the rigid practicality of “save, save, save” with a more nuanced view that acknowledges the complexities of human behavior.