The Ostrich Effect: Why We'd Rather Clean Toilets Than Face Our Bank Balance

Writing for The Conversation, Ray Charles “Chuck” Howard, an associate professor of business administration at the University of Virginia’s Darden School of Business, joins colleague Marcel Lukas of the University of St. Andrews in Scotland to explore why people avoid checking their bank accounts when they fear bad news and the financial implications of this behavior.

“One in three people would rather deep clean their bathroom – deep clean with rubber gloves and everything – rather than check their savings,” according to AJ Coyne, chief marketing officer at online bank Monzo. While this might sound like marketing hyperbole, it reflects a profound truth about our relationship with financial information: many of us actively avoid looking at our bank balances when we fear bad news.

This trait is so common that behavioral economists have given it a name: the “ostrich effect”. Like the myth of ostriches burying their heads in the sand, we often prefer uncertainty to confronting potentially negative financial information.

Research examining millions of banking logins reveals clear patterns in how people interact with their financial information. A 2009 study found that people systematically avoid checking their financial information when they suspect bad news.

This avoidance has real consequences for how people manage their money. In our ongoing research, we found clear evidence that people who don’t regularly check their accounts show much more volatile spending patterns, particularly around payday. When people receive their salary, those who infrequently check their accounts tend to spend significantly more on discretionary purchases compared to regular account checkers. So why do we not check our accounts more regularly? According to the thinking behind the “ostrich effect”, three psychological mechanisms drive this behavior.

First, there’s what’s known as the “impact effect”. Having definitive knowledge of a financial problem feels worse than merely suspecting it. When we don’t check our balance, we can maintain some hope that things aren’t as bad as we fear.

Second, seeing a lower-than-expected balance forces us mentally to reset our spending benchmarks and maybe set a budget if we didn’t already have one. This psychological adjustment can be particularly difficult around times of high spending, like after holidays or major events.

Finally, our sensitivity to financial information varies based on our current situation. When we’re feeling financially secure, we’re more emotionally equipped to handle potential bad news.

Digital banking — help or hindrance?

Mobile banking apps have made it easier than ever to check our balances — and research shows this accessibility brings real benefits. In our ongoing study of banking behavior, we found that regular account monitoring through apps helps people develop much more consistent spending patterns. This is especially true around payday, when spending decisions are most crucial.

We examined the so-called “payday effect” — the tendency for people to overspend on discretionary items just after receiving their salary. The results were striking: people who regularly check their accounts show around 60-70% less variation in their discretionary spending compared to infrequent checkers. This effect is particularly noticeable in categories like dining out and shopping, where impulsive spending is common.

Banking apps have been shown to help regulate impulsive spending. 

Regular account monitoring appears to be a powerful tool for avoiding the common trap of overspending after payday. By maintaining awareness of their bank balances, regular checkers show dramatically more controlled spending patterns throughout the entire month.

So how do you break a cycle of avoidance? There are several effective strategies for overcoming this tendency.

First, set specific times for financial check-ins, like Sunday evenings or the day after payday. Routines can help to prevent impulsive spending spikes.

You should use banking app features selectively. While constant notifications can increase anxiety, regular balance checking helps smooth out spending patterns.

Focus on trends rather than absolute numbers. People who monitor spending patterns rather than just their bank balances may make better decisions in the long run.

And finally, consider using financial aggregator apps, which bring together all your accounts to give you a broader view, rather than just individual balances.

The most important thing to remember is that financial avoidance is a normal psychological response – but one we need to actively manage. Just as we shouldn’t ignore physical health symptoms hoping they’ll go away, it’s also important not to ignore our financial health.

The evidence is clear. Regularly checking our accounts, despite the psychological discomfort it might cause, helps us to make better financial decisions. Our research shows that simply developing a habit of monitoring our finances can lead to more controlled spending patterns and better financial outcomes. That’s certainly worth putting the toilet brush down for.