spending habits http://www.wisebread.com/taxonomy/term/4144/all en-US Beware of These Common Debt Consolidation Traps http://www.wisebread.com/beware-of-these-common-debt-consolidation-traps <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/beware-of-these-common-debt-consolidation-traps" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_concerned_paperwork_000082590043.jpg" alt="Man learning to beware of common debt consolidation traps" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You've vowed to eliminate your credit card debt, but your bills are too overwhelming. You're ready to consider a final option: debt consolidation.</p> <p>It's true that consolidating your debts can make it easier to eliminate them. But debt consolidation can come with its own financial traps. Because of these potential pitfalls, consumers should be wary before signing up for debt consolidation. Bruce McClary, vice president of external affairs and public relations for the Washington D.C.-based National Foundation for Credit Counseling, says that sometimes, it makes more sense to consider other options.</p> <p>&quot;Debt consolidation is not always the right choice,&quot; McClary explains. &quot;It is not a free service. And often, you can take care of your debt on your own, if you change your spending habits and take a more disciplined approach to paying off your existing debt.&quot; (See also:&nbsp;<a href="http://www.wisebread.com/5-tricks-to-consolidating-your-debt-and-saving-money">5 Tricks to Consolidating Your Debt and Saving Money</a>)</p> <p>Here are the most common debt consolidation traps to avoid.</p> <h2>1. A Sky-High Interest Rate</h2> <p>In debt consolidation, a company will combine your debts into one single monthly payment that you can afford. In theory, it's a low-stress way to tackle what would otherwise be overwhelming.</p> <p>But even if your monthly payment is lower, this doesn't mean that you won't be spending too much. Some debt consolidation companies charge high interest rates to go along with the new monthly payment plans they set up for their clients. Make sure you ask your debt consolidation company what interest rate they'll charge you. If it seems too high, look elsewhere.</p> <h2>2. High Fees</h2> <p>Debt consolidation isn't free. But some debt consolidation firms soak their clients with especially high fees, either in the form of monthly or upfront charges.</p> <p>Again, make sure you know exactly what fees your debt consolidation company plans to charge you. Request a list of these fees in writing so that there's no confusion. If the firm won't provide this information to you, don't work with it. You want to work with a company that is clear about how much it charges.</p> <h2>3. Consolidating the Wrong Debt</h2> <p>Some forms of debt are worse than others. Credit card debt with high interest rates, for instance, is the bad kind of debt. But debts with low interest rates, such as auto loans or student loans, are generally considered good debt.</p> <p>You might be tempted to consolidate all of your debts into a single monthly payment. But rolling low-interest-rate debts into your monthly payment might be a poor financial decision depending on the interest rate of your new debt consolidation loan.</p> <p>When taking out a debt consolidation loan, focus on your debts with the highest interest rates. Pay off your low-interest-rate debt on your own.</p> <h2>4. Running Up Your Debt Again</h2> <p>Taking out one debt consolidation loan is bad enough. But if you don't change your spending habits, you might find yourself facing overwhelming debt again, even after paying off a debt consolidation loan.</p> <p>Consolidating your debt is treating the results of your bad spending habits. This isn't the same as treating the reasons for your bad spending.</p> <p>Once you've entered debt consolidation, it's time to determine why you ran up your debt in the first place. Maybe you spend when you are anxious. Maybe you overspend in an effort to keep up with your neighbors. Maybe you've never learned how to make and stick to a budget. If you don't address the reasons behind your overspending, you run the real risk of piling up debt yet again.</p> <p><em>Have you tried debt consolidation to eliminate debt? Did it work?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/beware-of-these-common-debt-consolidation-traps">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">The 5 Best 0% Balance Transfer Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/a-comprehensive-guide-to-the-debt-snowball-method-0">A Comprehensive Guide to the Debt Snowball Method</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-being-debt-free-can-cost-you">7 Ways Being Debt Free Can Cost You</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-dirty-secrets-of-credit-cards">The Dirty Secrets of Credit Cards</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/best-of-personal-finance-credit-where-credit-is-due-edition">Best of Personal Finance: Credit Where Credit Is Due Edition</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management consolidation fees interest rates spending habits traps Wed, 20 Jan 2016 14:00:03 +0000 Dan Rafter 1638728 at http://www.wisebread.com This Is How Americans Spent Their Money in the 1950s http://www.wisebread.com/this-is-how-americans-spent-their-money-in-the-1950s <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/this-is-how-americans-spent-their-money-in-the-1950s" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_classic_car_000028718312.jpg" alt="Woman in America spending her money in the 1950s" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Americans tend to think of the 1950s as an idyllic time when the babies were booming, the jobs were plentiful, and the country was flourishing.</p> <p>Our parents and grandparents had good reason to feel prosperous. The average yearly income rose from <a href="http://www.thepeoplehistory.com/1950.html">$3,210 in 1950</a> to <a href="http://www.thepeoplehistory.com/1959.html">$5,010 in 1959</a>, and post-war Americans were enjoying access to products and services that were scarce during World War II. Finding good uses for disposable income in the 1950s began the American love affair with consumerism. That love affair that continues to this day &mdash; although our spending priorities may have changed somewhat over the years.</p> <p>Here's how Americans spent their money in the post-war 1950s, and how their spending habits compare to ours in the 2010s.</p> <h2>White Picket Fences</h2> <p>The American dream of owning a home has deep roots the 1950s. Not only were many of the 16 million returning WWII veterans looking to buy homes, but the GI Bill offered them liberal home loans, and the end of the war saw the beginning of the baby boom, all of which drove demand for affordable houses.</p> <p>Large homebuilders met that demand. They began applying assembly-line methodology to home building &mdash; by using panelized construction and drywall rather than wet plaster &mdash; which allowed them to create &quot;cookie cutter&quot; tract housing, giving birth to the modern suburb. An amazing &quot;<a href="http://www.achrnews.com/articles/87033-the-1950s-pursuing-the-american-dream">three out of five families</a> became homeowners, and suburban living became a national phenomenon.&quot;</p> <p>There was a dark side to this housing boom, however. While favorable loans and newly built homes in suburbia were available to white veterans and families, African Americans and other minorities were actively excluded from communities, such as Levittown, and from access to home loans. These entrenched patterns of racial discrimination in housing continue to affect housing and home buying to this day.</p> <p>For those who could access the American Dream in the 1950s, homeownership looked very different from today. To start, the average size of a new single-family home in 1950 was a mere 983 square feet, whereas the average new home built in 2004 boasted 2,349 square feet. According to Margot Adler of NPR, &quot;Back in the 1950s and '60s, people thought it was normal for a <a href="http://www.npr.org/templates/story/story.php?storyId=5525283">family to have one bathroom</a>, or for two or three growing [kids] to share a bedroom.&quot;</p> <p>In addition, the time frame for purchasing a house has changed since the 1950s. Modern young adults consider buying a home an important step before having kids. According to Casey Shipley, a mortgage loan originator from Lafayette, Indiana, families in the 1950s saw home ownership as &quot;something you did when you were settled and done with babies. Most families had children in their early 20s, so looking for a home was something you did after that first big promotion, maybe when you were in your 30s.&quot;</p> <p>Part of that wait-to-buy-until-we're-settled mindset came from the fact that most families lived their entire lives in one home. Financing such a once-in-a-lifetime purchase with a 30-year mortgage allowed a family to have their home paid off by the time the breadwinner was ready to retire in his 60s.</p> <p>The median home price in the United States in 1950 was $7,354 (which is equivalent to $71,360 in today's dollars), rising to a median of $11,900 in 1960 ($93,830 in today's dollars), and housing represented about 22% of a 1950s household budget. For comparison, the median home price in October 2015 was $281,500, and the modern household spends about 43% of its budget on housing.</p> <h2>Cool Rides With Tail Fins</h2> <p>Of course, living in a new suburban home meant dependence on another big status purchase: a car. And Americans embraced the automobile with open arms, making it the center of our culture. Just look at the rise of American auto manufacturing (one out of every six working Americans were employed directly or indirectly by the auto industry), the creation of suburbs and interstates, and the introduction of the drive-in theater, fast food, and the classic car song.</p> <p>As much as Americans loved their cars, the standard was for each family to have just one automobile. Owning more than one car often indicated top-hat-and-monocle levels of wealth. The one-car family can seem pretty odd in retrospect, considering how inexpensive a new car was back in the day. At the beginning of the decade, the average sticker price for a new car was $1,510 ($14,650 in today's dollars), and rising to $2,200 ($17,350 in today's dollars) by the end of the 1950s. Modern new car prices average $33,560 in 2015.</p> <p>But it's important to remember that cars of the 1950s, as solid as they may look, had vastly shorter lifespans and required a great deal more maintenance than their modern counterparts. According to Craig Fitzgerald of BestRide, &quot;it was exceedingly common to carry a little envelope with flat ignition wrenches in the glove box, so that car owners could adjust ignition points and timing, which started going out of spec the moment you turned the car on.&quot; Additionally, cars were more likely to rust out from under you, which is why many families made do with cardboard-covered holes in the floors of their cars.</p> <p>This meant cars tended to last no more than 60,000 to 80,000 miles, between the ignition point issues and the overwhelming problem with rust. All-in-all, families in the 1950s and modern families spend a similar percentage of their household income on transportation &mdash; it was about 15% of a 1950s family budget, and is about 18% of a modern family budget. The difference is that we now own multiple cars that we keep for longer and have to maintain less.</p> <h2>TVs and Sugary Snacks</h2> <p>In addition to houses and cars, there was one more big purchase families in the 1950s scrimped and saved to make: the television. TV sets cost around $200 in the 1950s ($1,600-$1,950 in modern dollars), but that was not the end of their influence on American spending. (See also: <a href="http://www.wisebread.com/this-is-how-much-a-rent-to-own-tv-really-costs">This Is How Much a &quot;Rent-to-Own&quot; TV Really Costs</a>)</p> <p>Changing the American downtime from radio-listening to television-watching meant that our grandparents suddenly had visual examples to imitate in real life. For instance, TV shows from the 1950s were all about families living in gorgeous, spotless houses. Watching television prompted American families to yearn for their own homes, and to spend more money on cleaning products to make their homes as squeaky-clean as the sets of <a href="http://www.amazon.com/gp/product/B013FCLEIG/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=B013FCLEIG&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=44G3NJ7SEW37PC5C">I Love Lucy</a> and <a href="http://www.amazon.com/gp/product/B0038SUBDC/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=B0038SUBDC&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=OIBYQW6BP6S26TWI">Leave It to Beaver</a>.</p> <p>Television also helped to create a brand new demographic: the teenager. While teenagers were already at work forming their own subculture, advertising agencies realized that teens were a potentially lucrative group to target since they had leisure time and spending power, unlike previous generations of adolescents. So television commercials were geared toward the new demographic. Teens responded by spending their money on <a href="https://youtu.be/bgAt4dMgwwU">Coca-Cola</a>, <a href="https://youtu.be/4gtM_mmvDww">M&amp;Ms</a>, and all the other products commercials sold to them &mdash; and by influencing their parents' spending habits.</p> <p>The financial power of the teenage demographic remains incredibly strong, but advertisers have had to change their tactics as our consumption of entertainment has changed.</p> <h2>Keeping Our Spending Habits, But Changing What We Buy</h2> <p>While the specifics of what Americans bought in the 1950s might look different from modern purchases (when's the last time you saw someone rock a coonskin cap?), the habits themselves were remarkably similar. Homes, cars, and the products advertised on your screen of choice are the items people most wanted to buy then, as now.</p> <p>That's because the spending habits we consider normal were born in the post-war 1950s. Prior to that decade, few households could boast discretionary spending, and before television, there were not as many large-scale outlets that allowed advertisers to tempt consumers into unnecessary spending.</p> <p>We may no longer consider a 983 square foot house or a car with a rusted-through hole in the floor to be normal, but our expectations for spending discretionary income remain mostly the same.</p> <p><em>Would you have preferred to live in the 1950s? Or another decade? Let us know in the comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/this-is-how-americans-spent-their-money-in-the-1950s">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/14-pricey-things-you-shouldnt-buy-and-what-to-get-instead">14 Pricey Things You Shouldn&#039;t Buy (And What to Get Instead)</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-not-buy-something-just-because-you-can-afford-it">Do not buy something just because you can afford it</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-keep-peer-pressure-from-destroying-your-finances">How to Keep Peer Pressure From Destroying Your Finances</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-resist-a-splurge">6 Ways to Resist a Splurge</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-add-luxury-to-your-life-without-paying-luxury-prices">10 Ways to Add Luxury to Your Life Without Paying Luxury Prices</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Lifestyle Shopping 1950s American spending shopping spending habits Spending Money Tue, 12 Jan 2016 12:00:03 +0000 Emily Guy Birken 1635539 at http://www.wisebread.com What’s Your Budget Personality? http://www.wisebread.com/what-s-your-budget-personality <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-s-your-budget-personality" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_using_tablet_000050902322.jpg" alt="Woman figuring out her budgeting personality" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Our personalities inform how we approach every part of our lives. From the workplace to friendships and even at home, your distinct style is uniquely yours when you interact with the world around you. This goes for budgets, too. Personalities often impact how you spend, save and manage your money, sometimes positively and sometimes impeding your progress.</p> <p>Do you know your budget personality? Check out these four common types and corresponding tips to jump-start your road to better financial health. You just may recognize yourself!</p> <h2>The Go(al)-Getter</h2> <p>You set incremental goals, map out a plan and then make it happen. Save for a big purchase? Check. Increase retirement savings? Check. Put money aside for a down payment? Check. Your drive, ability to focus and discipline help you stick to your plans and achieve what you want out of life, including hitting your financial goals big and small.</p> <p><strong>Tip</strong>: You plan for everything, but don't forget to plan for unexpected expenses like a car breakdown, a broken leg, or even three destination-wedding invitations in your mailbox! To keep with your planning personality, tell yourself, &ldquo;My car&nbsp;<em>will</em>&nbsp;eventually need repair,&rdquo; and &ldquo;I <em>will</em>&nbsp;have medical expenses at some point.&rdquo; That way you can anticipate the unexpected. Look at your budget from last year and map what categories you&rsquo;re most likely to experience surprises. In the world of budgeting, sometimes lightning does strike twice!</p> <h2>The Automater</h2> <p>You fill your life with the things you love: friends, family, and hobbies. Money isn't your favorite topic &mdash; it probably doesn&rsquo;t even crack the top 10. But that doesn't mean you don't stay on top of your financial responsibilities. You've created a system that does the work for you: automatic bill pay, deposits to your savings account from each paycheck and round-ups into an investment account with each purchase. Knowing your money is managed in the background of life gives you comfort as you go about your business.</p> <p><strong>Tip</strong>: Automation is a great way to manage your bills and saving, but don&rsquo;t become robotic about your budget. You may miss out on opportunities to optimize your money. Look at money coming in and going out of your accounts monthly. You may find that you're spending money on services you're not using (e.g. subscriptions) or not taking advantage of offers like credit card points or company 401(k) matching.</p> <h2>The Busy Bee</h2> <p>You are always on the go, so your phone is a mobile command center for your life. Your phone helps you understand your daily &ldquo;to-do list&rdquo; &mdash; alerts and push notifications make sure you're at meetings, kids' functions and paying your bills on time&hellip; even if it&rsquo;s by the skin of your nose! You focus your seemingly endless energy to what's immediately next, often doing three things at once&hellip; rarely without a phone in your hand to accelerate your tasks.</p> <p><strong>Tip</strong>: Mobile tools have made budgeting efficient and easy, even while in the car or at work. But don't forget to slow down and think about the big picture. Where do you want to be in 5, 10, and 20 years? Do you have the financial plans in place to make that vision a reality? Though it may be hard to imagine even a week in the future, make time for yourself (and your partner, if someone is along for the ride) to discuss what you want out of your future and make a plan together.</p> <h2>The Avoider</h2> <p>For you, money = worry. As a result, you avoid the subject as much as possible; putting off bills and financial decisions until they become late notices and missed opportunities. Your budget is more &ldquo;approximation&rdquo; than exact math, which usually creates more worry than your thoughts on money in the first place!</p> <p><strong>Tip</strong>: Start small. Creating a budget may seem like an insurmountable task, especially for someone who feels like they don&rsquo;t have enough money to cover his or her expenses. Knowledge is a powerful ally when cleaning up your financial act. Start off by tracking everything you spend in one week vs. the money that you bring in. You may discover things you didn&rsquo;t know about your spending habits. Once you see the value of these insights, <a href="https://www.mint.com/">Mint</a> can help you establish a budget and set you on a path to be worry-free.</p> <p>What&rsquo;s your budget personality? Share in the Comments or on Twitter with hashtag #BudgetPersonality.</p> <p><em>This is a guest contribution from our friends at&nbsp;<a href="https://blog.mint.com/" target="_blank">mintlife</a>.</em></p> <div class="field field-type-text field-field-blog-teaser"> <div class="field-items"> <div class="field-item odd"> What&#039;s your budget personality? Find out here! </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mint">Mint</a> of <a href="http://www.wisebread.com/what-s-your-budget-personality">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/too-broke-to-be-frugal">Too broke to be frugal?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-money-moments-that-are-awkward-for-everyone">10 Money Moments That Are Awkward for Everyone</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/make-grocery-budgeting-a-game-the-price-is-right-style">Make Grocery Budgeting A Game, The Price Is Right Style</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-often-do-you-get-your-paycheck">How often do you get your paycheck?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/getting-by-without-a-job-part-1-losing-a-job">Getting by without a job, part 1--losing a job</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Budgeting budgeting finances personality types spending habits Wed, 04 Nov 2015 17:16:29 +0000 Mint 1598543 at http://www.wisebread.com 7 Ways Millennials Are Better With Money Than You Are http://www.wisebread.com/7-ways-millennials-are-better-with-money-than-you-are <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-ways-millennials-are-better-with-money-than-you-are" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/000066219881.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>There's a lot of eye rolling, patronizing, and dismissal of Millennials by older generations &mdash; some of which is warranted, some not. But have you ever thought about this cohort of tech-savvy professionals poised to take over the world and stopped to consider that they're spending and saving much smarter than other generations? 'Cause it's true.</p> <p>What are they doing differently? Take a look at these seven ways Millennials are changing the money game entirely to forge their own path to financial success.</p> <h2>1. Millennials Are Quick to Adopt New Payment Technologies</h2> <p>There used to be only three ways to pay for purchases &mdash; cash, check, or charge. But today there are several paperless options that require neither physical money nor the prospect of accumulating debt with credit. These new mobile-based payment technologies are linked directly to a bank account for what's essentially a debit transaction without the card, and Millennials are adopting them in droves.</p> <p>&quot;Millennials are spending differently today than previous generations and it's easy to see why when you look at the banking technology and tools available to them,&quot; says Barry McCarthy, executive VP of network and security solutions at First Data, a provider of global payment solutions. &quot;With 51% of Millennials <a href="http://www.jwt.com/blog/consumer_insights/jwts-the-future-of-payments-currency-trend-report-explores-new-ways-to-pay-and-rise-of-alternative-currencies/">favoring new payment technologies</a> over cash, debit, and credit cards versus 33% of Gen X-ers and 17% of Baby Boomers, it's no surprise that money management among Millennials &mdash; whether they're just starting college or beginning to build a family nest egg &mdash; is different.&quot;</p> <p>Some of the smartphone-accessible solutions that Millennials are increasingly using include:</p> <h3>Mobile Check Acceptance</h3> <p>Many Millennials favor banking apps with remote deposit features. A study by Zogby Analytics found that 54% of Millennials would <a href="http://www.miteksystems.com/infographics/the-smartphone-is-the-millennials-bestie">use remote deposit features</a> on their phones if their bank offered the feature. Many banks offer mobile check acceptance for Millennials to engage in on-the-go banking to fit their busy lifestyles. These services, aside from cutting out in-person branch visits, also help promote education on mobile checking, savings, and even pre-paid debit accounts, all within a secure and modern pay-by-check option.</p> <h3>Digital Wallets</h3> <p>Among other things, the digital wallet &mdash; which allows people to digitally replace physical wallet contents, including gift cards &mdash; is catching on quickly with Millennials, who often spurn cash and plastic in favor of a smartphone. Digital wallets let mobile users upload and store their credit, debit, or plastic gift card info, allowing users to have a view into all of the funds available across their cards and keep track of balances in real time. Along with other tools, like the leading virtual gift card app <a href="https://www.gyft.com/">Gyft</a>, the mobile device becomes an easy-to-use money management system.</p> <h3>Mobile Bill Pay</h3> <p>In a recent report, Western Union found that 38% of Millennials (Generation Y) use apps and mobile tools to <a href="http://payments.westernunion.com/GenYmindsetindex">make bill payments</a> &mdash; more so than any other generation. As Millennials increasingly tap into the bill-pay solutions that companies offer, they'll gain a greater understanding of the payment options available to them to manage their financial obligations, whether using online, mobile, or recurring payments for anything from mortgages to student loans. For the roughly one-quarter of Millennials who <a href="http://www.aicpa.org/press/pressreleases/2013/pages/millennials-rely-on-friends-financial-habits-to-determine-their-own.aspx">missed a bill payment</a> in the last year, reminders can also be scheduled to help make payments on time and avoid penalties or credit score damages.</p> <h2>2. They're Less Reliant on Credit</h2> <p>As a Millennial myself &mdash; who's on the older end of the Millennial spectrum, mind you &mdash; I know firsthand the financial devastation credit card abuse can bring. I maxed out my cards before my 19th birthday (less than six months after I received my first credit card, in fact), yet it took nearly half a decade to eliminate the accumulated debt. These days I try to live a don't-spend-what-I-don't-have kind of lifestyle, and it seems I'm not alone: According to a survey by Princeton Survey Research Associates International, an incredible 63% of Millennials ages 18 to 29 don't have a single credit card, compared to only 35% of adults age 30 and older who don't have them.</p> <p>While cash, debit, and mobile pay are preferred methods of payment for Millennials, they're also using prepaid cards for purchases to keep their spending in check, according to David Smith, head of marketing for Kaiku Finance, a provider of prepaid products.</p> <p>&quot;Research has proven that the Millennial generation is opting for prepaid cards instead of credit cards and bank cards for their wealth management routines,&quot; Smith says. &quot;Already immersed in student loans, Millennials are not interested in running up credit cards and accruing more debt. They like the convenience, the transparency regarding fees, and the predictability that prepaid cards have to offer.&quot;</p> <h2>3. They're Using Coupons to Try New Products</h2> <p>Millennials are using coupons to try new products with greater frequency than other demographic groups, according to new data from the Shopper Promotion Impact Report (available to subscribers) published by Inmar, a company that provides analytics based shopper engagement solutions for brands and retailers.</p> <p>Inmar's research for the report &mdash; conducted during the first six months of 2015 &mdash; reveals several significant differences in the coupon-influenced shopping behavior of Millennials compared to other shopper segments. Specifically, Millennials use coupons to try a new brand at significantly higher rates than older shoppers do.</p> <h2>4. Millennials Are Active Coupon Sharers</h2> <p>I don't just love shopping with coupons &mdash; I won't shop without them, in fact &mdash; but I also enjoy sharing them with friends, family, and other consumers. Recently I struck up a conversation with two ladies at the Gap who were buying back-to-school clothing and I informed them about an exclusive SMS discount for that day's purchase by texting a code word to a designated number for 25% off. It's something I do often, as do other Millennials.</p> <p>According to Inmar, Millennials are much more active in coupon sharing than older shoppers. Research revealed that 20% of coupons used by Millennials were acquired through sharing. By comparison, just 9% of the coupons used by older shoppers were acquired this way.</p> <h2>5. They Engage More With Paperless, Digital Offers</h2> <p>Ask a Millennial if they clip coupons and you might render them confused. That's because in their world, physical coupons rarely exist. Instead, their coupons are found on their mobile devices, many of which are preloaded into loyalty-program cards and apps, of which Millennials are accessing regularly.</p> <p>According to Inmar's research, 22% of the promotions that Millennial shoppers used during the first half of 2015 were load-to-card offers.</p> <h2>6. They're Using E-Banking and Mobile Devices to Monitor Spending</h2> <p>Virtually nobody balances a checkbook anymore as paying by check becomes more and more inconvenient and, as a result, infrequent &mdash; but that's assuming you know how to balance a checkbook in the first place. For Millennials, the concept is foreign since many of them have never written a check in the lives. Rather, they've grown up with mobile banking, which keeps everything tallied and logged automatically for quick-and-easy access for up-to-the-minute banking information.</p> <h2>7. Millennials Are Buying Homes They Can Afford</h2> <p>While the rest of America is trying to keep up with the Joneses, Millennials are like, &quot;Who are they?&quot; &mdash; especially when it comes to home buying.</p> <p>&quot;When buying homes, Millennials take their time, more so than Boomers or Gen X-ers,&quot; says Pamela Hanson, founding partner of Downcity Home Closing in Barrington, R.I. &quot;A trend we've noticed as a residential home closing firm is that more often than not, Millennials buy under their means. Not so with the generations that preceded them where bigger was better, and the plan was to finance as much of their home purchase as possible.&quot;</p> <p>In fact, adds Hanson, &quot;Millennials often have 20% down, which is easier because they are not buying at the top of their affordability.&quot;</p> <p>&quot;I think being raised with Internet technology as their norm, the whole process of financing is less daunting to Millennials; they are often calm and self-educated about the home buying process.&quot;</p> <p><em>Are you a Millennial? Does this spending and saving research apply to you? How are you managing your money differently than previous generations? I'd love to hear your thoughts in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/7-ways-millennials-are-better-with-money-than-you-are">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-things-millennials-should-do-today-to-prepare-for-retirement">4 Things Millennials Should Do Today to Prepare for Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-financial-decisions-youll-never-regret">8 Financial Decisions You&#039;ll Never Regret</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/forget-saving25-place-to-look-for-spare-change">Forget Saving...25 Places to Look for Spare Change</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/21-things-that-young-adults-absolutely-need-to-know-about-money">21 Things That Young Adults Absolutely Need to Know About Money</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-you-must-do-before-you-quit-your-job">5 Things You Must Do Before You Quit Your Job</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance generation y millennials saving money smart savings spending habits Mon, 14 Sep 2015 15:00:30 +0000 Mikey Rox 1555490 at http://www.wisebread.com Back in Debt? Here's How to Pay it Off for Good http://www.wisebread.com/back-in-debt-heres-how-to-pay-it-off-for-good <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/back-in-debt-heres-how-to-pay-it-off-for-good" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_doing_taxes_000020148166.jpg" alt="Couple back in debt and learning how to pay it off" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Finding yourself back in debt after having paid it off before is a horrible feeling. I know, because I've been there. In 2012, I spent 14 months aggressively paying off <a href="http://www.huffingtonpost.com/carrie-smith/getting-out-of-debt-_b_1581507.html">$14,000 of consumer debt</a> and worked hard to become debt free for the first time in life.</p> <p>Then, in 2013 I decided to quit my job to pursue my own freelance business. This is when my financial situation became much more volatile and resulted in taking on a bit of business debt to keep things going. So when I say that it's a horrible feeling to be debt free only to find yourself back in debt, I mean it. It's not fun!</p> <p>If you find yourself in a similar place, here's the strategy I'm using to pay it off again &mdash; and keep myself out of debt <em>for good</em>.</p> <h2>Identify the Problem</h2> <p>Before you can begin to pay off debt and get back on track, it's vital that you understand <em>why </em>and <em>how </em>you're back in the situation. Creating a permanently debt-free life is much more difficult than working towards becoming free of debt for the first time.</p> <p>The mindset and lifestyle changes are vastly different. This is something I miscalculated when I first got out of debt, as I obviously didn't change my mindset or spending habits sufficiently. I'd stopped using credit cards as part of my debt payoff plan, but after about a year I thought I could handle using them again. Wrong!</p> <p>I also thought that <a href="http://www.wisebread.com/basic-tips-for-investing-in-a-business-1">investing in a new business</a> was a smart idea as it would pay off in the long run. That's all well and good, but you have to draw the line as <em>how much</em> you're going to invest in business ventures and <em>how often</em> you use credit cards as an extension of your income.</p> <p>The need to depend on personal loans or credit cards for additional cash flow proved that my new business wasn't bringing in enough income to survive on its own. Doing a thorough inventory of my spending habits to elucidate why I was back in debt again showed that I needed to not only change my mindset, but also find ways to bring in more money.</p> <h2>Try a New Plan of Action</h2> <p>Obviously, if you've gotten out of debt once you can do it again, but in order for this time to really stick, you have to change your approach and try something new. As Albert Einstein put it, &quot;Insanity: doing the same thing over and over again and expecting different results.&quot; So don't expect to follow the same plan and have it work better this time.</p> <p>My mistake was that I viewed getting out of debt as the end goal. But getting out of debt is merely step one, and <em>staying out of debt</em> while changing your mindset and spending habits is a very long-term step two.</p> <p>My new plan of action includes:</p> <ul> <li>Finding ways to level out my inconsistent income<br /> &nbsp;</li> <li>Bringing in multiple streams of income to have more of a cushion<br /> &nbsp;</li> <li>Stopping the use of credit cards and loans as an extension of income<br /> &nbsp;</li> <li>Working with an accountability partner to stay on track<br /> &nbsp;</li> <li>Living well below my means and doing monthly budget check-in<br /> &nbsp;</li> <li>Performing a cash budget challenge (or other spending challenge) on a quarterly basis</li> </ul> <h2>Decide How You Want to Live</h2> <p>There are two key parts to being debt free: staying out of debt, and living a life without using debt as a tool to get what you want. For me, that second part has been the most difficult. Your <a href="http://www.wisebread.com/13-things-you-dont-know-about-your-credit-report-but-should">credit history and score</a> is basically determined by how much debt you leverage and pay off over time.</p> <p>So if you don't want to use debt to buy things, you will have to face that fact that it won't be easy. Most banks and lenders will not understand your reasoning for paying. And there will be instances where you simply cannot buy something without using debt, so you and your family will have to come to grips with this limitation.</p> <p>As long as you define a new set of priorities and have a renewed plan of attack, you'll be able to move forward and pay off debt for good. Take comfort in knowing that you don't have to stay here, and that since you've been debt free once, you can do it again. But now you'll have more experience and lessons to fall back on!</p> <p><em>Have you ever fallen back into debt? How did you climb back out again?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-smith">Carrie Smith</a> of <a href="http://www.wisebread.com/back-in-debt-heres-how-to-pay-it-off-for-good">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/beware-of-these-common-debt-consolidation-traps">Beware of These Common Debt Consolidation Traps</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/building-a-credit-history">Building a Credit History</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/best-of-personal-finance-credit-where-credit-is-due-edition">Best of Personal Finance: Credit Where Credit Is Due Edition</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-ways-to-stop-your-spouse-from-overspending">4 Ways to Stop Your Spouse From Overspending</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-seven-deadly-sins-of-consumerism-and-the-frugal-redemption">The seven deadly sins of consumerism (and the frugal redemption).</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management credit history finances owing money paying back spending habits Thu, 16 Apr 2015 11:00:09 +0000 Carrie Smith 1386121 at http://www.wisebread.com Bigger Paycheck or Bigger Tax Refund — Which Should You Pick? http://www.wisebread.com/bigger-paycheck-or-bigger-tax-refund-which-should-you-pick <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/bigger-paycheck-or-bigger-tax-refund-which-should-you-pick" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_money_000044737724_0.jpg" alt="Woman shopping with money from big tax refund" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>One of the earliest money lessons that I remember learning from my financial planner father was the correct protocol for tax refunds: The ideal situation is to receive a modest refund of $500 or less. (See also: <a href="http://www.wisebread.com/12-smart-ways-to-turn-500-into-a-better-future?ref=seealso">12 Smart Ways to Spend $500</a>)</p> <p>This advice struck a chord because it made perfect sense. Why give Uncle Sam an interest-free loan every year just to feel the excitement of getting <em>your own money</em> back each spring? I agreed with my father that it's a far better idea to keep the money in your paycheck, invest it throughout the year, and let it work for you.</p> <p>Which prompts the question &mdash; why do nearly <a href="http://money.cnn.com/2015/01/13/pf/taxes/taxpayer-refunds/">80% of taxpayers</a> get a refund each year, at an average size of $2,800?</p> <p>What financial planning advice often overlooks is the importance of psychology in money matters. For individuals like me, who can think of nothing more fun to do on a Saturday night than balance my checkbook, getting a modest refund really is the ideal situation for managing money. But for many taxpayers, getting a big refund can be the best path to good financial decisions.</p> <p>How do you know if you would be better off with a big refund or a modest one? Learn more about the psychological quirks could influence your refund decisions.</p> <h2>The Denomination Effect</h2> <p>The denomination effect is a phenomenon wherein people are less likely to spend big bills compared to small ones. If you have ever held onto a $50 or a $100 bill for several weeks, but don't blink an eye at spending the same amount in tens, fives, and singles, then you have experienced this effect.</p> <p>When it comes to taxes, the denomination effect is why you might not even notice an extra sixty bucks in your weekly paycheck &mdash; but turn that into a $3000 refund check at the end of the year, and suddenly it's a large enough amount of money that you feel the need to do something intelligent with it.</p> <p>If you struggle with keeping track of smaller amounts of money, but feel perfectly comfortable making good decisions with a large check, then it might make sense for you aim for a large refund that you invest. It will be a better use of that three grand than frittering away your extra $60 a week. (See also: <a href="http://www.wisebread.com/50-smart-things-to-do-with-your-tax-refund?ref=seealso">50 Smart Things to Do With Your Tax Refund</a>)</p> <h2>Loss Aversion</h2> <p>This cognitive bias describes people's tendency to strongly prefer avoiding losses over acquiring gains. Loss aversion is a nearly universal behavioral quirk that explains why so many investors hold onto tanking stocks, why would-be exercisers continue sending money each month to a gym they never visit, and why you probably still have a bread machine <a href="http://www.wisebread.com/10-things-in-your-basement-you-should-throw-out-today">collecting dust in your basement</a>. We all hate to feel as though we are losing money on something that we have already paid for.</p> <p>In terms of taxes, the idea of potentially owing the IRS more money come April 15 is off-putting enough to keep many taxpayers from reducing their refunds. Losing money each paycheck to taxes is a given, but the idea of having to write a check to the IRS triggers loss aversion in many taxpayers. They would rather give up the money temporarily throughout the year and overpay Uncle Sam than face the prospect of having to give up &quot;real&quot; money if they get their accounting wrong.</p> <p>If the thought of having to pay more in taxes than you had withheld from your paychecks puts you in a cold sweat, then aiming for a large refund might be the best option for you. Yes, your money could potentially be doing more for you in your pocket, but what good is maximizing your finances if you sweat bullets thinking about tax time?</p> <h2>The Money Illusion</h2> <p>This term was popularized by the famous economist John Maynard Keynes, and it describes our inability to recognize that a dollar amount is only as good as its purchasing power. Keynes used the term to describe the phenomenon of feeling richer when you receive a raise, even though costs have also risen; meaning you are earning the exact same purchasing power you did before the raise.</p> <p>When it comes to taxes, the money illusion means that for some people, having a $3,000 refund check burning a hole in their pocket could lead them to make poor financial choices because of the sheer size of the refund.</p> <p>For instance, if you are feeling flush, you may find yourself spending with impunity in every area of your life, from the expensive chocolate you rarely indulge in, to new shoes that you don't really need. But unless you are keeping careful track of each expenditure (which is the opposite of &quot;spending with impunity&quot;), you will likely reach the end of your big refund amount and keep on spending because you are focused on the dollar amount rather than what it buys. Your <a href="http://www.wisebread.com/mental-accounting-why-you-blow-your-tax-refund-but-not-your-raise">mental accounting</a> of your refund money has trouble keeping up with your actual spending.</p> <p>If you have a tendency to burn through money quickly when you have a big windfall, then it's probably a good idea to aim for a modest tax return &mdash; and set up a direct deposit of the saved money into an investment, retirement, or savings account. That way, you can make the intelligent decisions about your money before you are faced with an amount that will trigger the money illusion.</p> <h2>Don't Discount Your Money Psychology</h2> <p>We tend to think of money as a purely rational issue, but it's foolish to ignore the fact that how you feel about money will influence your financial decisions, for better or worse. In a purely rational world, receiving a large refund check every April does not make any sense. But depending on your personal money makeup, you might find that a large refund is your ideal, or you might find that keeping more of your cash in each paycheck works best for you.</p> <p>The important thing is to be mindful when you make decisions about money, and to take your psychology and your strengths and weaknesses into account. Know yourself, and your finances will thank you.</p> <p><em>Are you getting a big refund? Why or why not?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/bigger-paycheck-or-bigger-tax-refund-which-should-you-pick">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/surprise-5-reasons-you-might-not-get-your-tax-refund">Surprise! 5 Reasons You Might Not Get Your Tax Refund</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/get-a-bigger-refund-with-these-often-overlooked-tax-deductions">Get a Bigger Refund With These Often-Overlooked Tax Deductions</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/simple-tax-strategies-to-maximize-your-tax-refund">Simple Tax Strategies to Maximize Your Tax Refund</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-ways-to-reduce-your-tax-bill-with-bonds">4 Ways to Reduce Your Tax Bill With Bonds</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-important-tax-changes-for-2016">5 Important Tax Changes for 2016</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Taxes denomination effect loss aversion money psychology spending habits tax refund Tue, 31 Mar 2015 11:00:08 +0000 Emily Guy Birken 1360774 at http://www.wisebread.com Why Our Brains Want to Buy New Stuff, Even When We Don't Need It http://www.wisebread.com/why-our-brains-want-to-buy-new-stuff-even-when-we-dont-need-it <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-our-brains-want-to-buy-new-stuff-even-when-we-dont-need-it" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/shopping-4835470-small.jpg" alt="shopping bags" title="shopping bags" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Ask anyone why they want new things, and you&#39;ll get almost the same answer from each of them: It will make their lives better. Or at least, that&#39;s what they believe. It&#39;s not a new concept, and we&#39;re all aware of it, but that doesn&#39;t stop us from either buying impulsively or fighting the desire to buy new things. It&#39;s the reason people lease a car for three years; they know they&#39;ll want a new model soon enough. And we all have a list of what we would buy if we suddenly inherited money, won the lottery, or simply found $20 in a jeans pocket. (See also: <a href="http://www.wisebread.com/mental-accounting-why-you-blow-your-tax-refund-but-not-your-raise?ref=seealso">Why You Blow Your Tax Refund but Not Your Raise</a>)</p> <p>With the New Year now in full swing, many of us are moving forward with goals for 2014. These New Year&#39;s Resolutions range from calorie diets to debt diets, but most of us give in to old habits quickly. One of the biggest is overspending on new things that we just don&#39;t need. And it all boils down to two different aspects of our psyche: emotional triggers, and behavioral ones.</p> <h2>1. We Like Novelty</h2> <p>Our brains are actually made to be <a href="http://lifehacker.com/novelty-and-the-brain-why-new-things-make-us-feel-so-g-508983802">attracted to novelty</a>. It&#39;s part of the brain&#39;s natural desire to seek out new experiences, which provides us with stimulation and improves learning capacity. That means we&#39;re fighting hard-wired instincts to seek out something new and different, every single day.</p> <p>For example, take buying a new car. When you enter the dealership, you&#39;re excited. The new car has everything you want, and then some. It smells wonderful. It&#39;s pristine. It will change the way you live your life! This is the car for you, forever. (See also: <a href="http://www.wisebread.com/how-much-should-you-spend-on-a-new-car?ref=seealso">How Much Should You Spend on a New Car?</a>)</p> <p>Well, not really. Within a year, or less, your eyes are already be searching for that next ride because the one you have is no longer impressive. It&#39;s lost its luster. It&#39;s dusty in places. There are dirty footprints on the floor. The new smell? Gone. The novelty disappears as we become familiar with it.</p> <p>Advertising plays its part in this, of course. As an ad man with almost twenty years of experience, I know all too well the tricks and psychological manipulation used to have people drooling for the latest, greatest products. We are taught in college that we must create a hole, and then fill it. But that hole will never be filled. (See also: <a href="http://www.wisebread.com/17-things-car-salesmen-dont-want-you-to-know?ref=seealso">What Car Salesmen Don&rsquo;t Want You to Know</a>)</p> <p>After understanding this hardwiring, it&#39;s easy to then understand some of the other reasons people constantly seek out new things, despite a lack of need.</p> <h2>2. We Get Bored</h2> <p>This ties into the novelty idea, but also the simple nature of something to do. Bright lights, upbeat music, fun displays &mdash; stimulation! Boredom can be the reason you start flicking through the deal sites, perhaps looking for something interesting for a birthday or anniversary. Before you know it, you&#39;re checking out online for something you had absolutely no intention of buying. (See also: <a href="http://www.wisebread.com/15-frugal-ways-to-battle-boredom?ref=seealso">Frugal Ways to Fight Boredom</a>)</p> <h2>3. We Crave Excitement</h2> <p>Shopping can <a href="http://www.womenshealthmag.com/life/benefits-of-shopping">release the same endorphins</a> in your brain that are released during sex, taking drugs, or eating chocolate. It&#39;s <a href="http://www.psychologytoday.com/files/attachments/2557/howell-and-hill2009the-mediators-experiential-purchases.pdf">thrilling to spend money</a>. For a second, we believe the brand new thing we have will make our lives so much better. Of course, this stimulation wears off quickly, and like a drug, we soon want to have that euphoric feeling again. This is one of the reasons some people can go into severe debt and bankruptcy. They have a home filled with things they don&#39;t want, and no money in the bank. Yet, they cannot fight the addiction.</p> <h2>4. We Create Distractions</h2> <p>We are all guilty of this. If there is a consuming issue at hand that you can&#39;t remedy at the moment, such as medical test results, work concerns, relationship woes, then going shopping can be a wonderful distraction. It&#39;s a pause from the worries of life, even if the worries are financial. Indeed, it&#39;s ironic that some people will go shopping, spending money they don&#39;t have, to avoid facing their financial problems. It&#39;s an easy trap to fall into.</p> <h2>5. We Bow to Peer Pressure</h2> <p>This is the classic example of keeping up with the Joneses. They say we measure our misery, and our happiness, by our surroundings. And this is the reason many people can go into debt just by trying to keep up with a more affluent family next door. They get a new car, so you want a new car. They get new bikes, so you want new bikes. They get a 70&quot; TV, so you get a 70&quot; TV. The tragedy is, many of these people are living way beyond their means. But because you see only greener grass, and will do anything to live on it. (See also: <a href="http://www.wisebread.com/is-peer-pressure-keeping-you-poor?ref=seealso">How Peer Pressure Keeps You Poor</a>)</p> <h2>6. We Are Often Passive Aggressive</h2> <p>Shopping can be a way to stick it to your spouse. This is something often seen on shows like Dr. Phil, where a neglected spouse will spend money like crazy to punish their partner, and &quot;hit &#39;em where it hurts.&quot; Of course, while it may feel good in the short term to spend his or her money, it&#39;s ultimately a behavior that will come back on you.</p> <h2>7. We Practice Symptom Substitution</h2> <p>This one is a big problem for people who replace one problem, or addiction, with another. For some, quitting smoking will lead to excessive shopping. For others, it&#39;s giving up food or alcohol.</p> <p>There are many other reasons as well, including depression, anxiety, loneliness, self-esteem issues, poor body image, past poverty, and deprivation. These are all symptoms we will substitute with overshopping, filling one void with another.</p> <h2>So, How Can We Fight The Desire for New Stuff?</h2> <p>Well, it&#39;s not so much fighting the desire. It&#39;s more about not giving in to those feelings. If you find yourself in Target, or on Amazon, for no good reason, take a pause. It&#39;s much easier to control your impulses if you pay attention to them, rather than blindly shopping. (See also: <a href="http://www.wisebread.com/9-simple-ways-to-stop-impulse-buying?ref=seealso">Simple Ways to Stop Impulse Buying</a>)</p> <p>That simple pause is usually enough to make you stop and think. Then, ask yourself some easy questions:</p> <ul> <li>How are you feeling?</li> <li>Why am I here?</li> <li>Do I need this?</li> <li>What if I wait?</li> <li>How do I pay?</li> <li>Where will I put it?</li> <li>Will this make my life better?</li> <li>Will I regret this decision later?</li> <li>Can I use the money for something else?</li> </ul> <p>Look at the consequences, and even write them down. Use this <a href="http://www.federalreserve.gov/creditcardcalculator/">online calculator</a> to remind yourself of the high cost of credit card debt. Remember, this overspending on new stuff is a common problem. It&#39;s important to recognize it before it snowballs and creates a larger problem, not just financially, but emotionally.</p> <p><em>How do you resist the allure of the new? Please share your tips in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/why-our-brains-want-to-buy-new-stuff-even-when-we-dont-need-it">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-how-americans-spent-their-money-in-the-1950s">This Is How Americans Spent Their Money in the 1950s</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/50-things-you-can-do-today-instead-of-going-shopping">50 Things You Can Do Today Instead of Going Shopping</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/13-small-kitchen-appliances-that-arent-worth-the-money">13 Small Kitchen Appliances That Aren&#039;t Worth the Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/things-you-might-not-know-about-your-local-thrift-store">Things You Might Not Know About Your Local Thrift Store</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-is-gasoline-so-cheap-a-cost-comparison-of-40-common-household-liquids">Why is Gasoline So Cheap? A Cost Comparison of 40 Common Household Liquids</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living new shopping spending habits Tue, 21 Jan 2014 10:36:25 +0000 Paul Michael 1112796 at http://www.wisebread.com Identify and Solve Your Spending Mysteries http://www.wisebread.com/identify-and-solve-your-spending-mysteries <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/identify-and-solve-your-spending-mysteries" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/finances-3258918-small.jpg" alt="spending" title="spending" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>Do you feel like some of your hard-earned cash seems to vanish into thin air each month? I kept noticing a big chunk of my change seemed to be disappearing into a monthly black hole, despite what I thought was decent budgeting. So, I decided to clean up my act and set out to locate these hidden areas. Here are a few tips that I learned along the way that can help you nab your mystery spending, too. (See also: <a target="_blank" href="http://www.wisebread.com/find-your-hidden-spending-habits-and-save">Find Your Hidden Spending Habits and Save</a>).</p> <h2>1. Unplanned Dining Splurges</h2> <p>Despite having a <a target="_blank" href="http://www.wisebread.com/five-more-tips-for-eating-in-restaurants-and-sticking-to-a-budget?wbref=readmore-2">dining budget</a>, I admit I was not keeping track of every single drink or ice cream that seemed like a small splurge at the time. While an occasional treat is well deserved, often I was being silly. For example, last week while waiting for our table, my husband and I ordered two glasses of not-so-good, lukewarm chardonnay for $21 including tip. When I go to the liquor store, I can buy two or even three suitable bottles for that price. Do the &quot;quick drink at the bar&quot; a few more times, and you can easily run up $100 a month and not really enjoy it.</p> <p>I noticed that other little treats were adding up, too. We always visited the ice cream shop after a dinner out or made a few unplanned, weekly fast food stops. Somehow, I was forgetting that the tab for such outings can easily run $15-$20 for four people.</p> <p><strong>Curbing the Treat Buying</strong></p> <p>Once I realized what was happening, I established a treat allowance per month. This consisted of setting aside a small, fixed amount in cash, bound in a rubber band. I could do what I wanted with my little roll of cash, but once it was gone, that was it for the month. This quickly stopped the previous over-spending and made me prioritize my buying and how badly I wanted something.</p> <p>Secondly, I found ways to spread out little splurges more. For drinks, it was as simple as holding off for a more economical bottle of wine at the table, or eating at home, followed by an affordable beer at the bar afterwards. For the ice cream shop visits and fast food stops, I made such trips into planned, special outings for my family. This meant not indulging after already out to dinner or because we were just driving by. Looking forward to these planned jaunts made everyone appreciate them more. Spreading treats into separate outings actually made us feel like we were going out more, too.</p> <h2>2. The Curse of the Last-Minute Gifter</h2> <p>I budgeted for big items, like Christmas and my daughter's birthday, but I was still shocked at my annual gift spend. Things like housewarming gifts, other children's birthday parties, and smaller-scale holidays were really adding up. Throw in a wedding or two, and you can easily go off the rails. I never stopped to think about just how many events we were attending and the types of gifts we bought. Additionally, I would often buy presents at the last minute, meaning I usually spent more out of convenience.</p> <p><strong>The Gift-Giving Fix</strong></p> <p>Once I realized that we were averaging 10 dinner parties, 5 kids' birthday parties, and a handful of holidays and special events per year, I made a better gift budget. Then, I saved a bundle by <a target="_blank" href="http://www.wisebread.com/25-gifts-you-can-make-today">making some of my own gifts,</a> like painted flowerpots, or easier projects like repurposed jars filled with fresh flowers from my garden. Next, I stocked up on some attractive home goods, which I found at craft stores for $5 or less, using coupons or hitting seasonal sales. When out shopping, if I saw a good deal on a toy or baby clothes, I bought a few to have as inventory for upcoming events. In the last six months, we saved over $300 by doing this, and many of these gifts were more appreciated than the default bottle of wine.</p> <h2>3. Too Many Shows, Too Little Time</h2> <p>With the dizzying array of cable packages and providers, it is hard to know if you are really saving. I took a long, hard look and realized I had at least 10 movie channels I hadn't watched in the last 12 months. And, if you have young kids, chances are your days of surfing premium channels to watch &quot;Office Space&quot; undisturbed for the fortieth time are long gone. It was time to take inventory of what I really needed and cut down. My plan was also up for renewal, and when I viewed my account online, I saw a $20 per month increase for the same stuff I currently had. This was not good.</p> <p><strong>Making Cable Worth It Again</strong></p> <p>I already had a combined package for my phone, Internet, and cable, so I was pleasantly surprised more savings could be had. First, instead of settling for what you may see online and giving up any previous promotions, investing the 10 minutes to call your provider directly can pay off. I called expecting a fight, but before I could even plead my case, the representative said <a target="_blank" href="http://www.wisebread.com/thirteen-minutes-to-a-lower-cable-bill">there were special deals for those willing to renew</a> for two more years. I was immediately given a renewal plan that included faster Internet and all of my existing features for $10 less per month. Once that was done, I cut out two premium channel lineups we never use, which saved another $30 per month.</p> <p>The next time you are looking to tune up your budget, take a look at your non-essential spending and really think through where your money goes. My examples were very relevant for a family with a young child in the house, but everyone can attempt to cut down mystery spending. By identifying the common pitfalls and making some useful adjustments, you can save a bunch and still do the things you enjoy.</p> <p><em>Have you uncovered any hidden spending habits? What did you do to spot them and correct them?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kelly-medeiros">Kelly Medeiros</a> of <a href="http://www.wisebread.com/identify-and-solve-your-spending-mysteries">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-how-americans-spent-their-money-in-the-1950s">This Is How Americans Spent Their Money in the 1950s</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-s-your-budget-personality">What’s Your Budget Personality?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-spend-almost-nothing-on-gifts-this-year">10 Gift Ideas That Cost Almost Nothing</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/bridging-the-gap-from-dining-out-to-eating-in">Bridging The Gap From Dining Out To Eating In</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-bank-christmas-tree">The Bank Christmas Tree</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting cable bill dining out homemade gifts mystery spending spending habits Wed, 03 Jul 2013 09:48:32 +0000 Kelly Medeiros 980278 at http://www.wisebread.com What's Your Credit Card Spending Style? http://www.wisebread.com/whats-your-credit-card-spending-style <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/whats-your-credit-card-spending-style" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/credit-card-4998237-small.jpg" alt="credit card" title="credit card" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>A lot of experts predicted that consumers would cut back on credit card spending this year. I'd even bet that consumer behavior analysts felt they were making pretty safe predictions. And honestly, I kind of agreed with them.</p> <p>I can think of three reasons we should all be skittish about flashing our plastic. For starters, we had the increase in payroll taxes at the beginning of this year. That alone can give people the spending yips for a while. Second, there was all that business about delayed tax refunds. Third, there's the still-sluggish economy. It's improving, but pretty darn slowly.</p> <p>But guess what? Consumers are not behaving according to plan. They're using their credit cards at a steady rate. A recent report by First Data showed that credit card sales even increased 8.1% in February. This is especially unusual because people tend to cut back on spending for a few months after the holidays.</p> <p>Now, I suspect that some of this credit card usage is by those who actually <em>were</em> affected by the tax increase or the delayed tax refunds. They need their credit cards to cover the gap between take-home pay and household expenses.</p> <p>But on a positive note, a recent report from the American Banker's Association showed that consumers who are carrying a balance are more likely to pay on time now. Delinquencies have gone way down, which is awesome, because a late payment can really drag down your FICO score. (See also: <a href="http://www.wisebread.com/10-surprising-ways-to-negatively-affect-your-credit-score">10 Surprising Ways to&nbsp;Negatively Affect Your Credit Score</a>)</p> <p>Now, stats can turn around quickly, so I'm not saying this is how consumers will behave going forward. But I do spend a lot of time talking with folks about their credit cards. I get a sense that our spending behavior, while not quite as predictable as we may have thought, kind of falls into one of the following four categories.</p> <h2>Savvy Spenders</h2> <p>You keep your credit card balances low, and you always know what your utilization ratio is. (Just a reminder for folks who don't remember what this is &mdash; the credit utilization ratio is the amount of credit you've used compared to the amount of credit you have available.) You have excellent credit, and you take pride in that.</p> <p>You always pay your balance in full &mdash; and on time &mdash; every month. You feel confident about your financial future even if the economy doesn't look great. <a href="http://www.wisebread.com/a-step-by-step-guide-to-creating-your-emergency-fund">You have an emergency fund</a> set aside for unexpected expenses, so that makes you feel like you can weather any financial setbacks.</p> <h2>Cautious Spenders</h2> <p>You might be extra cautious because you got burned during the recession. As a result, you've vowed to never get caught in a credit card mess again. So over the past few years, you've made an effort to learn everything you can about personal finance and managing credit.</p> <p>These days, you feel pretty confident about your finances. You use your credit cards regularly, but you're careful to stay under budget. Your motto is &quot;Don't spend more than you absolutely have to.&quot;</p> <h2>Smart Revolvers</h2> <p>I always advise people to <a href="http://www.wisebread.com/how-much-does-your-credit-card-debt-cost-you">pay their balances off every month</a>. But I do know there are some folks who use their cards to make ends meet. If you're a smart revolver, you've figured out how to carry a balance and minimize your interest expense.</p> <p>You're also keenly aware that your FICO score is affected by your utilization ratio. You try to pay more than the minimum payment, and you always pay the bill on time. You're doing the best you can to maintain a good (or even excellent) credit score.</p> <h2>Rookie Revolvers</h2> <p>If this is you, you have no idea what a utilization ratio is. In fact, since you didn't even read the disclosure statements, you don't know off the top of your head what your interest rate is. This group is likely to get into serious debt before they know what hit them.</p> <p>Just for the record, there's no shame in this category. Unless you had a parent who taught you about credit before you graduated from high school &mdash; or at the very least, college &mdash; you had to learn the hard way. No one is born with a working knowledge of <a href="http://www.wisebread.com/the-false-allure-of-compound-interest">compound interest</a>.</p> <p>So what's your credit card spending style? Listen, there are no wrong answers here. I'll 'fess up and admit that I was once a Rookie Revolver. Hey, I'll bet most of were at some point in time.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/beverly-harzog">Beverly Harzog</a> of <a href="http://www.wisebread.com/whats-your-credit-card-spending-style">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">The 5 Best 0% Balance Transfer Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/top-5-travel-reward-credit-cards">5 Best Travel Reward Credit Cards</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-secured-credit-cards">The 5 Best Secured Credit Cards</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/earn-more-cash-on-dining-purchases-td-cash-rewards-visa-credit-card">Earn More Cash on Dining Purchases: TD Cash Rewards Visa Credit Card</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-best-cash-back-credit-cards">5 Best Cash Back Credit Cards</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards spending habits Mon, 22 Apr 2013 10:36:30 +0000 Beverly Harzog 973601 at http://www.wisebread.com How Your Last Name Affects Your Spending Habits http://www.wisebread.com/how-your-last-name-affects-your-spending-habits <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-your-last-name-affects-your-spending-habits" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000013705626Small_2.jpg" alt="Kids lined up" title="Kids lined up" class="imagecache imagecache-250w" width="250" height="152" /></a> </div> </div> </div> <p>You may think it sounds ridiculous, but there's pretty compelling evidence that your buying patterns and, in essence, financial outcomes in life, may actually be influenced by your last name. I came across a study that used a pretty broad data set and sound design to highlight that depending on where your last name falls in the alphabet, you may be inclined to jump at &quot;deals&quot; and spending opportunities more than others. (See also: <a href="http://www.wisebread.com/when-deals-matter">When&nbsp;Deals Matter</a>)</p> <h3>Why Being a &quot;Z&quot; Is Expensive</h3> <p>According to the study (as highlighted by <a href="http://www.time.com/time/business/article/0,8599,2045050,00.html#">Time</a>) since Zs and other people with end-of-alphabet last names are generally at the back of the line from schooldays onward, there's a pattern of getting things after everyone else. From the lunch line to recess, this pattern is pounded into the psyche so much so that it actually carries forward with people who change to an earlier-letter last name later in life. While children who are always at the front of the line become accustomed to the luxury of going first, children at the back of the line start to become anxious and fearful of &quot;missing out.&quot;</p> <p>I know, you're skeptical. But the data doesn't lie. In an experiment where subjects received emails with offers of free tickets to a basketball game, the average response rate was significantly faster for R-Z names versus A-I names. In a second experiment, subjects were enticed by the prospect of being entered into a drawing to win $500 and again, the end-of-alphabet names had the quickest replies. The article outlines a few more experiments with concurring results.</p> <h3>What Does Your Last Name Mean Then?</h3> <p>Does this mean if you have a late-letter last name you're doomed to a lifetime of financial failure? Of course not. And like any broad statistical set, there will be outliers. I know plenty of impulse shoppers with names that span the alphabet.</p> <p>But if you have a late-letter last name, you should be aware of the potential forces that may be at play here. And while there may be a higher propensity for a certain behavior in your cohort, it shouldn't justify that behavior. Rather than using this new-found link as an excuse, recognize in advance that you may be predisposed to harmful consumer behavior. As the author of the Time article suggested, perhaps retailers might even focus increased marketing efforts on people based on their last names to boost their bottom lines! Think about that the next time you get an &quot;exclusive&quot; offer or have an impulse to make an unplanned purchase. Social deal sites like <a href="http://www.tkqlhce.com/click-2822544-10817658">Groupon</a> play on our fears of missing out on a deal. This is the perfect setting for frenzied impulse buying, and retailers are experts at <a href="http://www.wisebread.com/7-shopping-jedi-mind-tricks-and-how-to-spot-them">shopping Jedi mind tricks</a>. This tidbit may may save you thousands over your lifetime!</p> <p>Personally, my last name's in the middle of the alphabet, and I can't say I'm any more prone to impulsive spending behaviors than anyone else. But I'd be curious to hear your take. Are you close an A or a Z? Do you feel any influence from your place in line as a child?</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/darwins-money">Darwins Money</a> of <a href="http://www.wisebread.com/how-your-last-name-affects-your-spending-habits">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-how-americans-spent-their-money-in-the-1950s">This Is How Americans Spent Their Money in the 1950s</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-reasons-why-buying-groceries-online-is-great">3 Reasons Why Buying Groceries Online Is Great</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/a-guaranteed-way-to-avoid-impulse-credit-card-purchases">A Guaranteed Way To Avoid Impulse Credit Card Purchases</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-bank-christmas-tree">The Bank Christmas Tree</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-delayed-spending-tricks-that-help-pay-off-debt">7 Delayed-Spending Tricks That Help Pay Off Debt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Shopping impulse buying scientific study spending habits Wed, 13 Apr 2011 10:24:10 +0000 Darwins Money 522778 at http://www.wisebread.com How Spending Less Made Me Happier http://www.wisebread.com/how-spending-less-made-me-happier <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-spending-less-made-me-happier" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/126661740_09fc5a03ab_1.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>Contrary to popular belief, you don't need money to be happy. In fact, spending less can actually make you happier.</p> <p>&quot;Say what? Are you crazy? I need money to buy fancy toys, flashy cars, get into exclusive clubs, fine restaurants, big shows. Y'know, the fun stuff.&quot;</p> <p>It might seem counterintuitive, but you can become happier by <em>not</em> spending money on those things, or whatever else. And that's not just some crazy frugal talking, either.</p> <p>How? It's simple: <strong>When you don't spend, your focus shifts to finding experiences.</strong> Great experiences stay with you. And those experiences are what last and will make you truly happy, not possessions or the next fleeting entertainment rush that come and go.</p> <p>Think about it: What has really made you happy in your life so far? Some gadget you bought a while back, or...</p> <ul> <li>A beautiful walk with someone you love?</li> <li>Sitting in front of a fire with your friends?</li> <li>Playing sports with great people on a sunny afternoon?</li> <li>Hiking and enjoying nature?</li> <li>Holidays with your family?</li> <li>Spending the day making music or painting?</li> </ul> <p>Sure, that fancy gadget gave you a rush when you first held it in your hands, but you got pretty bored of or used to it soon enough, right? But those experiences you had &mdash; the ones that didn't cost a dime &mdash; stay with you forever.</p> <h3>Only Spend Enough to Create Your Experiences</h3> <p>Now, of <em>course</em> you want to spend on some things (besides the necessities like groceries and rent) &mdash; restaurant, movie, trips, ski lift tickets, music recording equipment, paint supplies, whatever. But the point here is to only spend as much as you need to create your experiences, rather than make the spending <em>itself</em> your method of finding happiness.</p> <p>New gadgets and sensation-stimulating nights out are fleeting and constantly force you to spend, spend, spend. But experiences don't cost anything and stay with you long after they're done. So, buy those nice athletic shoes, but then use them for your runs and hikes and do more of those activities that will ultimately make you very happy, rather than going back to the store to buy more shoes.</p> <h3>How to Make the Shift From Buying to Experiencing</h3> <p>OK, so don't spend to be happy and instead start seeking more experiences. Sounds nice, but easier said than done. How the heck do you make the shift from buying to experiencing? Some practical advice, please:</p> <ul> <li><strong>Look at what you regularly spend on</strong> that's not necessities like groceries and rent: going out, movies, clothes, tools, etc.<br /> &nbsp;</li> <li><strong>Decide why, specifically, you regularly spend on those things</strong>. Why/how do they make you happy?<br /> &nbsp;</li> <li><strong>Think of how you could use your existing things to create new experiences that you'd enjoy but haven't been doing much.</strong> Put your existing video collection to use by throwing movie nights with your friends, for example.<br /> &nbsp;</li> <li><strong>Make a list of free things you currently do that you enjoy</strong>, like hiking, music-making, painting, running, sports, etc.<br /> &nbsp;</li> <li><strong>Start doing more of those things </strong>while consciously cutting back on your spending.<br /> &nbsp;</li> <li><strong>The more experiences you start having, the more you'll enjoy yourself</strong>, and the less you'll have a desire to spend.</li> </ul> <p>You could say steps like these are common sense, and you'd be right. There are no secret tricks or tactics here. Pretty simple stuff. It's all about becoming conscious of your spending habits and cutting back on the nonessentials. Then, replacing the time otherwise spent on buying with pursuing experiences that really make you happy.</p> <p>Rinse and repeat, and before long you'll have less and less of a desire to go out and buy stuff. You'll be too busy loving the experience you're having out in nature, creatively creating, spending amazing time with great people, or whatever else. These experiences don't cost anything, will make you ridiculously happy, and will stay with you long after they're done.</p> <p>And ya know what's really neat? You can't buy experiences like that, even if you wanted to.</p> <h3>How Spending Less Made Me Happier</h3> <p>I used to spend constantly on new music-making gear. Instead of focusing wholly on improving my craft, I was researching what piece of equipment would let me &quot;finally get that effect I was going for.&quot; Or which piece of DAW (digital audio workstation) software would be the ideal interface for my workflow. I mean, I was obviously spending time making electronic dance tunes: Why else would I need to buy new gear? But I was always left with that feeling of wanting more. Once the shine of the new piece of gear wore off, I wanted a new one.</p> <p>Then one day I read an inspiring interview with an electronic artist, who mentioned that by purposefully limiting himself with equipment and not getting anything new, he was able to focus completely on making music. Not only did his skill level skyrocket, but he was enjoying the art of music a lot more. It wasn't about attaining a piece of gear but the sheer joy of creating beautiful sounds out of nothing.</p> <p>In other words, by spending less, he became happier.</p> <p>I noticed that I was falling under the same gear-lust trap that the artist used to be in. So I pushed myself to do the same. I sold most of my gear that I rarely used, settled on just one piece of software (Ableton Live), and forced myself not to look at music gear websites and magazines.</p> <p>It was uncomfortable at first, but I quickly got used to not thinking about buying new equipment. My attention shifted to all about the art of music-making. And, just like that artist, I found myself getting better a lot faster &mdash; not to mention enjoying music-making a lot more. It was a relief not having to think about the latest plugin or effect. All my attention was on the music-making experience.</p> <p>By spending less, I became happier.</p> <p>Today, I don't think about spending on music-making stuff at all. I'm lost in the glorious, rewarding experience of making electronic music with the tools that I already have, and I'm so much happier as a result.</p> <h3>Spend Less to Become Happier</h3> <p>Shift your focus from spending to experiencing, and you can become happier. Rather than constantly pursuing new possessions that are fleeting, you'll enjoy experiences that bring you tons of happiness, stay with you long after they're gone, and don't cost you a dime.</p> <p>Oh, and your bank account will say thank you, too.</p> <div class="field field-type-text field-field-guestpost-blurb"> <div class="field-label">Guest Post Blurb:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <p><a href="http://olegmokhov.com">Oleg Mokhov</a> is the world's most mobile electronic musician and co-founder of the premium <a href="http://soundtrackster.com">royalty free music</a> store Soundtrackster. Read more by Oleg at his website:</p> <ul> <li><a href="http://olegmokhov.com/become-a-better-artist/">7 Steps to Becoming a Better Artist</a></li> <li><a href="http://olegmokhov.com/weezer-being-remarkable/">The Weezer Method to Being Remarkable</a></li> <li><a href="http://olegmokhov.com/unique-voice/">Are You Anything Special?</a></li> </ul> </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/oleg-mokhov">Oleg Mokhov</a> of <a href="http://www.wisebread.com/how-spending-less-made-me-happier">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-how-americans-spent-their-money-in-the-1950s">This Is How Americans Spent Their Money in the 1950s</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/21-frugal-ways-to-reward-yourself-right-now">21 Frugal Ways to Reward Yourself Right Now</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-things-you-can-do-today-to-be-happy">10 Things You Can Do Today to Be Happy</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-ways-money-does-buy-happiness">9 Ways Money Does Buy Happiness</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-win-the-lottery-without-paying-a-penny-for-the-ticket">How to Win the Lottery Without Paying a Penny for the Ticket</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Lifestyle happiness spending habits Tue, 30 Mar 2010 14:00:02 +0000 Oleg Mokhov 6097 at http://www.wisebread.com New Year, New Spending Habits http://www.wisebread.com/new-year-new-spending-habits <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/new-year-new-spending-habits" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/218410335_ccb9ec3a20.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>After a month of eating badly and not really moving around, I decided it was time to get my body back in shape and get fit again. Instead of turning to an easy workout, I decided I&rsquo;d let my very fit friend talk me into the 30 Day Shred with Jillian Michaels. Although it&rsquo;s making me extremely sore and tired right now, after 5 days I can already see the benefits and know that the end is in sight and the benefits will far outweigh the sacrifice.</p> <p>Saving money is no different. Christmas has a way of sneaking up on you, and before you know it, the budget is out the window as you spend money like no other month. This year I want to encourage you to set some budget goals that are easy to maintain.</p> <h3>Habit #1: Making Wiser Choices</h3> <p>My new workout plan is hard right now, but I know &mdash; in the long run &mdash; the benefits are going to be enormous, and I&rsquo;ll feel better. It&rsquo;s also like that when it comes to spending habits. You may have gone along for years on a nice income, and then you lose your job and things were tougher. Or you may have thrived on two incomes, and then your spouse has a baby and it&rsquo;s now time to trim the fat off the budget.</p> <p>2010 can be the year that you significantly cut your grocery spending so that you can live better and have more money in your back pocket, but first you have to make the decision to do it by making wise choices. Being a wise consumer is the first step to cutting your bill, because even when you want to splurge, you will know whether or not you have the money to do it. It&rsquo;s not about cutting back in every area, but making wise grocery decisions that will lead to more money for the piggy bank. Being aware of where that money is going and how it&rsquo;s being spent is the first step on the road to new spending habits.</p> <h3>Habit #2: Buying on Sale</h3> <p>This seems simple enough, and yet it's huge when it comes to budgeting. You know the drill: you run into a store last-minute to grab a couple of things, and you end up with a cart load of groceries that weren't on sale. Because you shopped without a list and ignored sales, you spent more than you wanted to.</p> <p>Or, while browsing the aisles you found the strawberries for $3.99/lb that looked so yummy and the apples at $1/lb that just didn&rsquo;t quite appeal. The difference is a whopping $2.99/lb, and this year it&rsquo;s time to think through decisions like that. Although it may seem like such an insignificant amount, if you put just 15 items into your cart that are $2 more than another similar item, your grocery bill just went up $30. If we&rsquo;re going to really save money this year, you need to watch seasonal sales and buy accordingly. During the summer, when exotic fruits are in abundance, stock up on your need for mangoes, star fruit, and the like, but during the winter resolve to eat apples and oranges to truly cut costs.</p> <h3>Habit #3: Buying Generic Brands</h3> <p>A friend of mine and I went grocery shopping a few months ago, and watching her was an interesting study on human behavior. As she wandered the store, she &ldquo;blindly&rdquo; threw items into her cart, not paying attention to what she was doing. It almost looked like she was looking for name brands, and when she spotted one she threw it in the cart. Perhaps that&rsquo;s why her grocery bill for a family the size of mine is $75 more per week. She bought items because she always did and because her Mom used to &mdash; without even comparing prices.</p> <p>I won&rsquo;t lie. I&rsquo;m a box reader. I read the ingredients and the price. You may be thinking, &ldquo;Woah there, I don&rsquo;t have time for all that nonsense.&rdquo; In honesty, I don&rsquo;t think it takes that much more time, but it will save you a lot.</p> <p>Compare the prices and save. Generics typically cost much less than their brand name cousins. Worried about the taste? <a href="http://shopping.yahoo.com/articles/yshoppingarticles/264/supermarket-brands-vs-national-brands-which-taste-better/;_ylt=AnV9Gi9mub4Si0673gSw7GGCfNdF">This research</a> done by Yahoo proves that there&rsquo;s no difference.</p> <h3>Habit #4: Re-discover ALDI</h3> <p>Once an unclean, unkempt place with more MSG, high fructose corn syrup, and water-added ingredients than is healthy for any normal person, ALDI may not be the first place you want to shop. However, if you haven't stepped into an ALDI recently, may I suggest that 2010 be the year you do? Here's just a few reasons why...and trust me there's many more:</p> <ul> <li>Their <em>Fit n Active</em> line is perfect if you&rsquo;re on a diet or trying to eat healthy. Unlike most healthy food, it won&rsquo;t cost you the earth.</li> <li>When I&rsquo;m thinking baking, this is one store that has me covered for way less. From pie crusts to powdered sugar, I&rsquo;ve found that the ingredients at ALDI are about $1 cheaper than elsewhere.</li> <li>For a place where cutting costs is premium, I was shocked to learn they have a great <a href="http://www.aldimeals.com/">meal planner tool online</a>. If I can plan all my meals online before going and have a list to take with me, voila! How easy is that?</li> </ul> <p>Don&rsquo;t forget to bring cash or a debit card (as they don&rsquo;t take other cards), a quarter for the cart, and some reusable bags.</p> <h3>Spending Habit #5: Couponing</h3> <p>I can hear you groan through the computer as you think this is reserved for people with too much time on their hands and no children to tag along. Consider this: Through couponing I haven&rsquo;t paid for most toiletries in 8 years. Through couponing my family of 3 lives on $50 a week for groceries. As for the time spent couponing? With about an extra hour per week, I save at least 50-60% on my grocery bill. That&rsquo;s huge. In fact if I think about monetary savings it&rsquo;s about $35-$50/week that I save. That calculates out at around $40 an hour, which to me, is a great wage!</p> <p><em>Feel incentivized?</em></p> <p>I am very simple when it comes to coupons:</p> <ol> <li>I cut out mainly toiletry ones (to couple with free things at the drugstores for their rebate programs).</li> <li>I only cut what I need. Once my kiddos are old enough to cut, I'll circle the ones I want and have them clip away.</li> <li>One night a week, while watching a show on TV with hubby, I clip and sort. (Sometimes it takes way less time than that.) I then put them into one of 2 folders: one for toiletries and one for food.</li> <li>While I'm adding new ones, I take out expired ones and so I don&rsquo;t have to do tons of weeding out.</li> </ol> <p>Coupon-clipping can appear daunting at first, but it is well worth it in the long run. Over the years, it&rsquo;s enabled us to get things we already use for free, get things we don&rsquo;t use but can donate for free, and live on one income.</p> <p>Like any other habits cutting your grocery bill takes time and takes work &mdash; but, oh the payoffs! The benefit of being able to buy a caramel macchiato every week are so worth it for to me to be clued into where my money is going and what it&rsquo;s doing when it comes to the grocery store.</p> <div class="field field-type-text field-field-guestpost-blurb"> <div class="field-label">Guest Post Blurb:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <p>This is a guest post by Clair Boone. She bought diapers for 20 cents a pack and earned the applause of the cashier checking her out. Over the past year, Clair Boone&rsquo;s website <a href="http://www.mummydeals.org">Mummy Deals</a> and money-saving tips has helped thousands of people all over the U.S. save hundreds of dollars.</p> <ul> <li><a href="http://www.mummydeals.org/2009/08/how-to-make-barista-coffee-for-cheap.html">How to Make Barista Coffee for Cheap</a></li> <li><a href="http://www.mummydeals.org/2009/08/trading-services-to-save-money.html">Trading Services to Save Money</a></li> <li><a href="http://www.mummydeals.org/2010/01/sneak-peek-walgreens-deals-124-13010.html">Sneak Peak: Walgreens Deals 1/24-1/30/10</a></li> </ul> </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/clair-boone">Clair Boone</a> of <a href="http://www.wisebread.com/new-year-new-spending-habits">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-how-americans-spent-their-money-in-the-1950s">This Is How Americans Spent Their Money in the 1950s</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-keep-peer-pressure-from-destroying-your-finances">How to Keep Peer Pressure From Destroying Your Finances</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-travel-full-time-for-17000-a-year-or-less">How to Travel Full-Time for $17,000 a Year (or Less!)</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/24-tips-for-having-a-baby-without-going-broke">24 Tips for Having a Baby Without Going Broke</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/14-pricey-things-you-shouldnt-buy-and-what-to-get-instead">14 Pricey Things You Shouldn&#039;t Buy (And What to Get Instead)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Lifestyle spending habits Fri, 29 Jan 2010 17:00:02 +0000 Clair Boone 4893 at http://www.wisebread.com 5 Ways to Live Better Without Spending More http://www.wisebread.com/5-ways-to-live-better-without-spending-more <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-ways-to-live-better-without-spending-more" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/piggy-bank-plans-to-go-traveling.jpg" alt="Piggy bank plans to go traveling" title="Piggy Bank Plans to Go Traveling" class="imagecache imagecache-250w" width="250" height="253" /></a> </div> </div> </div> <p>The most simple-minded measure of your standard of living is how much money you spend: spending more equals living better. Reality is more complex. There are a lot of ways to live better without spending more.</p> <p>I'm not just talking about the &quot;touchy-feely&quot; <a href="http://www.wisebread.com/how-to-be-happy">ways of being happier</a> that come from strong connections with friends or relatives or having a spiritual aspect to your life, although that's also important. I'm talking about the sort of standard-of-living stuff that you usually have to pay cash for.</p> <h2>1. Don't buy stuff you don't really want</h2> <p>It sounds obvious, but it's not so easy in practice. It's hard enough just to grasp the difference between needs and wants. It's all the harder to grasp the difference between the things you truly want and the things that are just a passing fancy &mdash; especially in the face of advertising, the expectations of your family, the consumption practices of your neighbors, and all the other influences on the way you think about what you want.</p> <p>Still, this is the core principle of of frugal living. The less you spend on stuff you don't want (or don't want as much), the more you have to spend on the stuff you really care about. Get this right and the other pieces fall into place pretty easily.</p> <p>So, how do you get it right? Here's what I've been able to come up with:</p> <ul> <li><a href="http://www.wisebread.com/needs-wants-and-not-even-wants">Needs, wants, and not even wants</a></li> <li><a href="http://www.wisebread.com/lucky-trade-offs">Lucky trade-offs</a></li> <li><a href="http://www.wisebread.com/raise-your-standard-of-living-by-focusing-your-spending">Raise your standard of living by focusing your spending</a></li> <li><a href="http://www.wisebread.com/making-the-most-of-your-guilty-pleasures">Making the most of your guilty pleasures</a></li> <li><a href="http://www.wisebread.com/when-poor-folks-have-better-crap-than-you">When poor folks have better crap than you<br /> </a></li> </ul> <p>Probably the key tool for doing this well is a budget. Always remember, a budget is not a constraint. Those constraints that seem like they come from the budget are actually from the real world. Your budget is a <a href="http://www.wisebread.com/a-budget-is-not-a-constraint">tool for maximizing your joy</a> in the face of those constraints.</p> <h2>2. Share with others</h2> <p>There is probably no more powerful tool for raising your standard of living than sharing. After all, if you can use something without having to buy your own, you get the benefits at zero cost.</p> <p>People actually share all the time within the household &mdash; I knew very few kitchens where each person has their own pots and pans, let alone their own stove and refrigerator. In fact, a lot of people don't even think of it as &quot;sharing&quot; to have a common set of stuff in a household. Sharing between households, though, has become increasingly rare.</p> <p>I talk about some of the reasons for that in a post called <a href="http://www.wisebread.com/why-dont-people-share-more">Why don't people share more</a>. (That one picked up a bunch of good comments as well.) If that doesn't convince you to make sharing a fundamental tool for living large on a small budget, there are some less effective alternatives (that are still better than just buying everything yourself): <a href="http://www.wisebread.com/borrowing-renting-substituting-and-doing-without">Renting, substituting, and doing without</a>.</p> <p>Since sharing within households seems more normal, that's a place to start. And sharing stuff is only the beginning &mdash; it's also possible to share the work, both household work and work in the money economy. See my post: <a href="http://www.wisebread.com/strategies-for-households-with-more-than-one-adult">Strategies for households with more than one adult</a>.</p> <h2>3. Have some capital</h2> <p>Too many people think of saving only in terms of a specific goal: Saving for a new car, saving for a new house, saving to send the kids to college, and (most especially) saving for retirement. The fact is, though, that just having some money &mdash; some capital &mdash; raises your standard of living.</p> <p>Investments can earn a return &mdash; raising your income &mdash; but that's only part of the story:</p> <ul> <li>Capital makes the household run more smoothly. Just like having adequate supplies in your pantry makes your kitchen run more smoothly, having adequate capital means you're not having to waste time &quot;managing&quot; your finances--shifting money from one account to another, keeping track of bills until payday.<br /> &nbsp;</li> <li>Capital also means that you don't have to borrow. If you don't borrow you don't have to pay interest--and since you don't have to borrow, you can also negotiate a much better rate when you choose to borrow.<br /> &nbsp;</li> <li>Capital sets you free to take bigger risks. This can can lead to all sorts of good things. It can save you money (for example, though higher deductibles on your insurance). It can let you pursue your true interests (for example, by letting you start a business or get a degree). It can earn you a better return.</li> </ul> <p>Want more details? Here's some of what I've said about this before:</p> <ul> <li><a href="http://www.wisebread.com/join-the-rentier-class">Join the rentier class</a></li> <li><a href="http://www.wisebread.com/too-broke-to-be-frugal">Too broke to be frugal</a></li> <li><a href="http://www.wisebread.com/on-the-importance-of-having-capital">On the importance of having capital<br /> </a></li> </ul> <h2>4. Don't borrow (so you don't have to pay interest)</h2> <p>There are <a href="http://www.wisebread.com/good-debt-bad-debt">good reasons to borrow</a>. But however good your reason, it still costs money.</p> <p>If you've been borrowing, then <a href="http://www.wisebread.com/living-within-your-means-isnt-nasty">living within your means</a> will initially lead to a drop in your standard of living. But it's a drop that doesn't last. As long as you don't rack up debts now that you have to pay off later, <a href="http://www.wisebread.com/should-your-standard-of-living-rise">your standard of living tends to rise</a> automatically.</p> <h2>5. Cook your own food</h2> <p>This is a fairly small item &mdash; the average household spends about 15% of its money on food. But the average household spends about 6% of its money on food away from home. If you spend more than that eating out (which half of you probably do), then just a little more home cooking can save you a lot of money. And even if you spend less than average on eating out, unless you're already a subsistence farmer you can almost certainly save money and eat better by cooking more.</p> <p>Of course, someone in your household needs to be able to cook. Fortunately, it's pretty easy to <a href="http://www.wisebread.com/teach-yourself-to-cook">teach yourself how to cook</a>.</p> <p>Once you're cooking (even a little), it's pretty straightforward to <a href="http://www.wisebread.com/frugalize-any-recipe">save money in the kitchen</a>. There's lots of support for <a href="http://www.wisebread.com/healthy-frugal-eating">frugal, healthy eating</a>, such as <a href="http://www.wisebread.com/healthy-recipes-with-cost-data">healthy recipes with cost data</a> courtesy of the U.S. government.</p> <p>Really, cooking your own food would be an increase in your standard of living even if it didn't save money, simply because stuff you make yourself can be better (i.e. more to your taste) than stuff that someone else cooks. The fact that it's cheaper is just a bonus. Plus, it's <a href="http://www.wisebread.com/how-to-bake-sourdough-bread-and-save-a-buck-on-every-loaf">fun</a>.</p> <h2>6. Spend money to save money</h2> <p>Finally, here's a bonus tip that doesn't quite match the headline, because it sometimes involves spending money, so I'm not counting it as one of the five.</p> <p>There are lots of ways to spend money to save money. The most basic is simply to <a href="http://www.wisebread.com/huge-tax-free-investment-returns">stock up on things when they're cheap</a>. (This yields a return which can be huge in percentage terms and tax-free.) There's also just taking good care of your stuff.</p> <p>More generally, though, there are lots of ways that small investments (of money, time, or both) can produce a permanent decline in your cost of living. There are obvious examples, like weatherstripping or insulating your house. Some, such as learning how to <a href="http://www.wisebread.com/the-many-reasons-besides-frugality-to-do-for-yourself">make or fix things yourself</a> can be free (although sometimes you need to pay for classes or tools).</p> <p><a href="http://www.wisebread.com/non-financial-investments">Non-financial investments</a> &mdash; investments where either the investment itself or the return is in the form of something other than money &mdash; often yield a higher return than ordinary stocks or bonds.</p> <p>I think this will turn out to be especially true of investments that either save or produce energy, because they're priced based on the current costs of energy, and I happen to think that energy is going to be more expensive in the future:</p> <ul> <li><a href="http://www.wisebread.com/invest-some-of-this-cheap-energy">Invest some of this cheap energy</a></li> <li><a href="http://www.wisebread.com/fix-energy-in-tangible-form">Fix energy in tangible form</a><br /> &nbsp;</li> </ul> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/5-ways-to-live-better-without-spending-more">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-seven-deadly-sins-of-consumerism-and-the-frugal-redemption">The seven deadly sins of consumerism (and the frugal redemption).</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-inspiring-people-who-each-paid-off-over-100000-in-debt">5 Inspiring People Who Each Paid Off Over $100,000 in Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-most-valuable-thing-debt-takes-from-you-isnt-money-its-this">The Most Valuable Thing Debt Takes From You Isn&#039;t Money — It&#039;s This</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/jettison-the-junk-why-clutter-clouds-your-mind-and-saps-your-energy">Jettison the Junk: Why Clutter Clouds Your Mind and Saps Your Energy</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-the-rich-stay-rich-a-lesson-in-lateral-thinking">How the rich stay rich; a lesson in lateral thinking</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Lifestyle Cooking debt save saving spending habits Thu, 01 Oct 2009 13:00:04 +0000 Philip Brewer 3664 at http://www.wisebread.com The Bank Christmas Tree http://www.wisebread.com/the-bank-christmas-tree <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-bank-christmas-tree" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/gift_1.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="168" /></a> </div> </div> </div> <p>I try oh how I try to not walk through the day *looking* for metaphors to come smacking me in the face, but sometimes no matter how much I don&rsquo;t want to be thinking in those terms, they come raining down.</p> <p>In the bank this morning, I was waiting in line. Tiny bank. Tiny town. We all know each other. I look over at the tree which has paper ornaments from the &lsquo;needy&rsquo; children in town and their ages and what they want for Christmas. My husband and I were both planning on buying something for a girl and boy our own children&rsquo;s ages.</p> <p>But while we were able to buy our kids what they asked for (a couple of Autobot Transformers and a sterling silver locket and a Sailor Moon) we would never be able to afford the tree of the needy. What did the needy kids in our town want the town Santa bank customers to buy? </p> <p>From ages 4-17 they seemed to want iPods, and Wii and Xbox. There was literally not a single kids&rsquo; wish list that we could fulfill with something like a couple of Transformers and a piece of jewelry and a doll. And I had time to look at the whole tree in that bank line.</p> <p>Where are kids ---not just needy kids---getting the idea that it&rsquo;s appropriate for 4 year olds to have iPods? I&rsquo;m sure the 17 year olds filling out the &lsquo;needy&rsquo; cards have more awareness that a neighbor and not Santa will probably be flipping the bill. Do the 17 year olds think that gifts need to start over $100 to be a good gift?&nbsp; Did the parents put them up to this? Is this happening in your town? I know it's difficult to instruct other people's children on graciousness but wasn't there someone somewhere that could head this off at the pass?&nbsp;I've been talking to others today about this. Apparently the entitled need for expensive items is quite common on these types of Christmas toy drive programs.</p> <p>The&nbsp; bank teller, when I got to the window, said she&rsquo;s hearing it from both sides. The parents of the needy kids saying to ask big. The possible donors all flabbergasted at the nerve. And what does it say about both sides that we have these reactions? Do we have assumptions of how those in need are supposed to act? Do we also have assumptions of how those with cash should act?</p> <p>I left the bank without taking 2 of the paper ornaments to buy gifts. I apparently, don&rsquo;t have enough money or patience to fill the Christmas wish of two needy kids in my small town of 2000 people. Another friend said to just buy what I would have bought my own kids and donate that instead. But somehow it&rsquo;s touched too much of a nerve with me now. I just can&rsquo;t do it. Given that this is a 'tight' Christmas for most of us how could the organizers of this think that any potential gift giver might not have this reaction? It's just not sitting well. I feel bad for the kids and I want to slap the parents.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/maggie-wells">Maggie Wells</a> of <a href="http://www.wisebread.com/the-bank-christmas-tree">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-how-americans-spent-their-money-in-the-1950s">This Is How Americans Spent Their Money in the 1950s</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-resist-a-splurge">6 Ways to Resist a Splurge</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/debit-or-credit-which-one-should-you-choose-at-the-checkout">Debit Or Credit? Which One Should You Choose At The Checkout?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/50-great-things-to-do-with-50">50 Great Things to Do With $50</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-ways-you-are-sabotaging-your-weekly-grocery-budget">9 Ways You Are Sabotaging Your Weekly Grocery Budget</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Shopping christmas wish lists entitlement spending habits Mon, 08 Dec 2008 23:26:39 +0000 Maggie Wells 2634 at http://www.wisebread.com The seven deadly sins of consumerism (and the frugal redemption). http://www.wisebread.com/the-seven-deadly-sins-of-consumerism-and-the-frugal-redemption <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/wisebread_imce/demon.jpg" alt="demon" title="demon" width="243" height="212" /></p> <p>Sit ye down, hold your loved ones tight, and get ready for the seven deadliest sins of the modern day consumer.</p> <p>(By the way, I know I&rsquo;m a movie buff when I can reference two of the greatest films ever made in one blog headline. If you don&rsquo;t know what they are, shame on you. But even more shame on you if you&rsquo;re committing these sins right now.)</p> <p>Who says they&rsquo;re the seven deadly sins? Well, I do. I&rsquo;m no authority on the subject, I certainly didn&rsquo;t write the consumer bible. But life experience has taught me that indulging in any of these sins leads to a path of debt, disillusionment and despair. If you find yourself in the position of indulging one or more of these sins on a daily basis, seek the frugal redemption.</p> <p>&nbsp;</p> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/wisebread_imce/greed.jpg" alt="greed" title="greed" width="300" height="244" /></p> <p><em> &ldquo;I&rsquo;ll take that, and that, and that, and that&hellip;and who cares how I&rsquo;ll pay for it. In fact, I&rsquo;ll put it on the good old credit card and think about it later. Hey, it comes with six months no interest anyway. Sweet!&rdquo;</em></p> <p>Sound familiar? Greed is fairly ugly and I see it everywhere. Our obsession as a society with material things has gone beyond the norm. As Madonna once said, we&rsquo;re living in a material world. But I don&rsquo;t think anyone realized how bad it&rsquo;s become. The &lsquo;buy now, pay later&rsquo; mentality is rife. But when our own government is in debt to the tune of $8,892,888,862,434.37 (that was at the time of writing this article, and climbing $1.93 billion per day) they&rsquo;re hardly setting the standard for fiscal responsibility. An argument for another time perhaps. Still, the message is clear. Give in to greed, make way for debt.<br /> <strong><br /> The Frugal Redemption</strong><br /> If you can&rsquo;t afford it, don&rsquo;t buy it. By that I don&rsquo;t mean save up $300,000 and drop it on a new house. But examine your budget (better still, MAKE a budget&hellip;the first step on the road to debt is not having a budget). Have three bank accounts &ndash; one for saving, one for bills, one for fun. If you spend your fun money for the month, hey guess what, you&rsquo;re done. </p> <p>Get out of the cycle of wanting things you really don&rsquo;t need or can afford. Stop and think. Often my wife will go shopping for baby clothes for our newborn. She&rsquo;ll get to the counter with an armful of clothes, then think again about what she really actually wants or needs. The pile gets much, much shorter.</p> <p>&nbsp;</p> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/wisebread_imce/sloth.jpg" alt="sloth" title="sloth" width="300" height="225" /></p> <p>It can wait.<em> &quot;401k? It can wait. Savings account? Next month. Paying off the credit card? I&rsquo;ve got time. Coupons? Waste of time. Deal-hunting? Why bother?&rdquo;</em></p> <p>Sloth is a great enemy of frugality. And I know, I was a former indulger of sloth. I put off the 401k contributions because I wanted to use the extra money. I hated clipping coupons, and they were only worth 50 cents or a $1 so who cares? But boy, those little amounts soon add up. </p> <p>Basically, you snooze, you lose. Put off saving in your 401k (especially if your company matches it) and you&rsquo;re literally throwing away money. Plus, you have to put a whole lot more away later on to catch up. Make the minimum payments on your credit card and you&rsquo;ll be paying it off for decades. </p> <p><strong>The Frugal Redemption</strong><br /> Why put off till tomorrow what you can do today? Make it the day to finally start getting your life in order if you haven&rsquo;t yet made plans for the future. Ask your HR officer about the 401k plan. Look through the coupons in the Sunday paper. You will find some that apply to you, I guarantee it. Start adding more to your savings account, even if it&rsquo;s just $50 a month to begin with. Add more to your credit card payments if you can. This is all about forming good habits. </p> <p>If you can get a better deal by walking 10 minutes further down the high street, do it. Shop around whenever and wherever you can. The exercise won&rsquo;t hurt either, we&rsquo;ve become a nation of drivers. Use Internet shopping comparison tools to find great bargains. Check out sites like <a href="http://www.bargainist.com/">The Bargainist</a> , <a href="http://www.consumerist.com/">The Consumerist</a> , and of course, Wisebread. It&rsquo;s very easy to be lazy, but in the long run you&rsquo;re only fooling yourself and hurting your future. Seize the day.</p> <p>&nbsp;</p> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/wisebread_imce/gluttony.jpg" alt="gluttony" title="gluttony" width="300" height="225" /></p> <p>My dad used to say to me <em>&ldquo;your eyes are bigger than your belly&rdquo; </em>and he was right. I was always happy to take more, be it candy or extra roast potatoes on my Sunday lunch. But all too often I didn&rsquo;t eat them and they went in the trash, or went bad. Or I made myself sick. </p> <p>Sadly, I am still the same today, although I&rsquo;m really trying to get out of it. &ldquo;Hey look hon, 8lbs of cheese for $10, bargain!&rdquo; It&rsquo;s only when my wife tells me that, as usual, the cheese will go bad before we finish it that I&rsquo;ll think twice. I&rsquo;m a sucker for BOGO deals, regardless of whether I need two, or even one of the item on sale. Buying in bulk is deceptive. Great for things like rice, toilet paper and diapers. Not so great when it&rsquo;s got an expiration date that&rsquo;s fast approaching. No-one wants cheese sandwiches three times a day. <br /> <strong><br /> The Frugal Redemption</strong><br /> Again, this is all about asking yourself a few questions before you pop something in the shopping cart. Do I really need 5 cartons of orange juice because I can save 20 cents per quart? Will my family benefit from this buy 10, get 10 free offer? Is it a deal, or false economy? As those great infomercials often say, when you throw away food it&rsquo;s &ldquo;cash in the trash.&rdquo; Remember, just because it&rsquo;s on clearance or a bargain, it doesn&rsquo;t mean it&rsquo;s the bargain for you. Being a glutton for special offers could make you a glutton for punishment.</p> <p>&nbsp;</p> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/wisebread_imce/pride.jpg" alt="pride" title="pride" width="300" height="225" /></p> <p>I know people who tell themselves, &ldquo;heck, I deserved it&rdquo; when they&rsquo;re sporting a new jewel-encrusted watch or hand-made pair of the finest leather shoes. Maybe that&rsquo;s true, but it doesn&rsquo;t mean it&rsquo;s a wise move. It&rsquo;s fine to splurge once in a while, but making a habit of it can lead to all sorts of problems, including shopping addictions. </p> <p>Worse still, pride has this nasty habit of making you do things you don&rsquo;t want to do. People will borrow cash to go out on the town rather than admit to being short of money that week. And that means buying a new dress, or buying a few rounds of drinks, plus the expensive meal. All because pride won&rsquo;t let them admit, to their friends no less, that they&rsquo;re trying to save money or that they just don&rsquo;t have the cash. </p> <p><strong>The Frugal Redemption</strong><br /> Give pride a vacation. It&rsquo;s good to be proud of an achievement, or something your son or daughter has done at school, but embracing pride to allow yourself too many luxuries is never going to have a happy ending. Avoid places that will tempt you. If you have a habit of going nuts in Target or Macy&rsquo;s, stay away. If you&rsquo;re a sucker for a particular section of the store (watches, shoes) steer clear. </p> <p>As for feeling too proud to admit you don&rsquo;t quite have the cash to go out, your friends will understand. Your co-workers will understand. In fact, anyone who doesn&rsquo;t is probably someone you really don&rsquo;t want to know. There&rsquo;s no shame in staying home on a Friday night if it means you avoid the cycle of borrowing, debt and depression. Pride has its place&hellip;but it can be a frugal shopper&rsquo;s worst nightmare. <br /> &nbsp;</p> <p>&nbsp;</p> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/wisebread_imce/wrath.jpg" alt="wrath" title="wrath" width="300" height="179" /></p> <p>&ldquo;Don&rsquo;t get mad, get even.&rdquo; Wise words, although the &lsquo;getting even&rsquo; part is not always appropriate either. I think it would be more apt to say &ldquo;don&rsquo;t get mad, get what you want.&rdquo; </p> <p>Anyway, the point is this. I&rsquo;ve watched people blow up at customer service folks. I&rsquo;ve seen angry letters, I&rsquo;ve heard angry phone calls. I&rsquo;ve witnessed huge lists of demands spouted by human versions of the Tazmanian Devil cartoon. Most of the time, all it gets them is higher blood pressure and a security guard showing them the door. Anger is the first way to show you&rsquo;ve lost control of the situation. </p> <p><strong>The Frugal Redemption</strong><br /> A frugal shopper knows that you get way more flies with honey than you do with vinegar. My <a href="/how-to-complain-and-get-a-good-result">former article on complaining</a> highlighted this process, but it&rsquo;s not just about making a complaint. It&rsquo;s about life in general. </p> <p>Guess what happens if you treat you waiter with appreciation and a smile instead of disdain. Quicker service, more fries, bigger drinks, you name it, I&rsquo;ve had them all. A polite conversation with most people will get you much further than raging and expecting something for nothing. Be nice.</p> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/wisebread_imce/envy.jpg" alt="envy" title="envy" width="300" height="202" /></p> <p>This can best be summed up with that old &ldquo;Keeping Up With The Jones&rsquo;&rdquo; adage. And I have several friends who are both house-poor and car-poor because of it. </p> <p>Why are so many people in this country living in houses they cannot afford, driving cars they could never afford and wearing clothes that are way too expensive? The simple answer is still way too long to print here, but a big part of it is envy.</p> <p>I remember being told that people measure their own misery and success by their surroundings, and it&rsquo;s completely true. If you live in a nice little home and are surrounded by other nice little homes, you feel good. You&rsquo;ve done well. Transplant that nice little home into a rich area filled with mansions, swimming pools and landscaping. Now, it doesn&rsquo;t look so good. Actually it sucks. It&rsquo;s not fair, it&rsquo;s not fair, I want a big house! I want a Cadillac Escalade! I want a Rolex!</p> <p>The same applies to your job, your clothes, in fact, everything around you. But it&rsquo;s all relative. And most important, you have no idea what the people around you do, or how they pay for what they have. Maybe they&rsquo;re in debt up to their eyeballs and spend every night crying themselves to sleep. Maybe they work 24/7 to pay for the things they can never really enjoy. Maybe they had rich folks. But you should never compare, it will only lead to jealousy and misery.</p> <p><strong>The Frugal Redemption</strong><br /> This one is not easy. After all, as a species we&rsquo;re always going to compare ourselves to our friends and neighbors. But before you stop reading this and look out of your window to stare at the new Ferrari parked in your neighbor&rsquo;s driveway, here are a few facts (as of Nov 2006, provided by <a href="http://www.globalissues.org/">www.globalissues.org</a> ).</p> <p>&bull; Half the world &mdash; nearly three billion people &mdash; live on less than two dollars a day.<br /> &bull; Nearly a billion people entered the 21st century unable to read a book or sign their names.<br /> &bull; Approximately 790 million people in the developing world are still chronically undernourished, almost two-thirds of whom reside in Asia and the Pacific.<br /> &bull; According to UNICEF, 30,000 children die each day due to poverty.<br /> &bull; Some 1.1 billion people in developing countries have inadequate access to water, and 2.6 billion lack basic sanitation</p> <p>Now, I didn&rsquo;t mean to bring you down. But it certainly brings life crashing into perspective if you think you&rsquo;re not fortunate. Trust me, if you&rsquo;re reading this then you&rsquo;ve got access to more than most people will ever have. You&rsquo;re lucky. </p> <p> <img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/wisebread_imce/lust.jpg" alt="lust" title="lust" width="300" height="214" /></p> <p>First and foremost, you can relax. I&rsquo;m not about to tell you that sex is not a good way to be frugal (actually, a romantic night in bed with your partner is a lot cheaper than going to the movies&hellip;and much more fun).</p> <p>No, the kind of lust I&rsquo;m talking about is that longing, aching desire that takes over you and cuts off the common sense to your brain. In my case, I&rsquo;ve been lusting after a 42&rdquo; LCD TV for about, hmm, a year now. And every week, it grabs me a little bit more. It doesn&rsquo;t help that every time I go into Best Buy they have more of them, and they cost less. But the frugal shopper in me is winning, so far. It&rsquo;s saying &ldquo;wait, the price will drop more, the quality will go up, you don&rsquo;t need it.&rdquo; But it won&rsquo;t be long before the lust wins, telling me that I could be watching my Blade Runner DVD in HD on a huge screen and be drooling at the mouth in movie nirvana. </p> <p><strong>The Frugal Redemption</strong><br /> It&rsquo;s all a question of willpower. The 32&rdquo; goldfish bowl TV I have right now is not great. But it&rsquo;s not bad either. It&rsquo;s just a TV after all, which I watch less and less these days as my babies get older. Put things into perspective. You&rsquo;re a smart cookie&hellip;you&rsquo;re a frugal shopper after all. </p> <p>My advice is this. Concentrate on what you really need, not what you want. There&rsquo;s a big difference. And think for a second about how much better life would actually be with that object you&rsquo;re lusting after right now. If it&rsquo;s a new car, how much time do you actually spend in it? Is the one you have all that bad? Could the money be spent on something way more important or impactful, like perhaps a family vacation (life experiences stay with you forever&hellip;a car, on average, 5 years).</p> <p>At the end of the day, wants are fleeting. They are all too often replaced by bigger and more expensive wants. The objects of your desire will one day be put out with the garbage, or sold, or given away. You can&rsquo;t take them with you. So, calm your lusts.</p> <p>There you go. Seven deadly sins. Not a short tale, but a worthy one I think. We all succumb to them from time to time, but we can be strong. We can.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/the-seven-deadly-sins-of-consumerism-and-the-frugal-redemption">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-live-better-without-spending-more">5 Ways to Live Better Without Spending More</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/jettison-the-junk-why-clutter-clouds-your-mind-and-saps-your-energy">Jettison the Junk: Why Clutter Clouds Your Mind and Saps Your Energy</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-you-have-what-you-want-and-do-you-want-what-you-have">Do you have what you want… and do you want what you have?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/debt-repayment-is-not-an-expense">Debt repayment is not an expense</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-scientists-say-you-should-be-committing-the-7-deadly-sins">Why Scientists Say You Should Be Committing the 7 Deadly Sins</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Lifestyle debt debt reduction desire envy frugality gluttony greed lust overspending pride sins sloth spending habits willpower wrath Tue, 17 Apr 2007 22:43:46 +0000 Paul Michael 521 at http://www.wisebread.com