Why not looking feels better

If you hide from your bank balance, you may have concluded that you're unusually childish about money. You're not. Avoiding information that might hurt is one of the most thoroughly documented things that people do, and it's been found in people whose job is to look at numbers.

Russell Golman, David Hagmann and George Loewenstein reviewed the research on this for an economics journal. The traditional view in economics is that information is simply useful, a means to better decisions, so nobody would turn it down if it were free. The review collects a large body of evidence that people do turn it down. They avoid information even when it's free, even when it would help them and even when nobody else is involved. The reason is that information isn't only useful. It also produces feelings. Knowing your balance is low feels bad in a way that vaguely suspecting it doesn't. So people manage their feelings by managing what they know. The authors note that the consequences can be costly.

The best-known example comes from investing. Niklas Karlsson, George Loewenstein and Duane Seppi looked at how often investors in Scandinavia checked the value of their holdings. Their prediction was that people would look more often when the market was rising and would put their heads in the sand when it was flat or falling. That's what the data showed. They called it the ostrich effect. A later study by Nachum Sicherman and colleagues had daily login records for a large sample of retirement accounts. After the market fell, logins dropped by 9.5 per cent. These were people with money invested, often a good deal of it. When the news was likely to be bad, fewer of them looked.

The investors' avoidance arguably did no harm. There's not much an ordinary saver should do on the day the market falls. Your situation is different, and the next chapter explains why. But the impulse is the same one. When the number is likely to be unwelcome, not looking feels better than looking.

Thomas Webb, Betty Chang and Yael Benn have written about this under the name of the ostrich problem. They point out how common it is for people to avoid checking their progress on things they care about. People with diabetes avoid testing their blood sugar. Few people keep track of what they eat or how much energy their household uses, and few check their bank balances. The review's explanation is a conflict between two motives. One is the wish to know accurately how you're doing. The other is the wish to protect your view of yourself. When the information threatens to show you as someone who's failing, the second motive often wins.

I think that second motive is the heart of it with money. A bank balance gets taken as a verdict as well as a number. It seems to say whether you're coping and whether you're a competent adult. It seems to say whether you've done as well as your sister. An envelope from the bank feels as if it might contain a judgment, and nobody opens a judgment eagerly.

So here are the reasons for not looking, as I understand them, and each of them is real.

It spares you a bad feeling, tonight. The evening is nicer if you don't know.

It protects your sense of being someone who's managing. While you haven't seen the number, you can still believe the rough idea.

It saves effort. Opening the letter may mean a phone call, a decision or a form. If you don't open it, none of that needs doing today.

And it keeps a fragile peace. If money is a sore subject at home, not looking means not having the conversation.

Underneath these are needs nobody should be ashamed of. You want to enjoy your evening, and you want to feel competent. You also want some peace at home, and you don't want to be frightened. The question for the next several chapters is whether not looking meets any of those needs for longer than an evening.