How and Why We Rationalize Spending

Millions of Americans find themselves in credit card debt, and many of them complain that they don’t know how the debt got so unmanageable.

While there may be reasons for accruing debt such as a medical ailment or job loss, often it is just the result of poor judgement and overspending.

Yet many people rationalize their spending and do not see themselves as the problem.

How We Rationalize Spending

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Don’t Let Your Purchases Fall Prey to Your Emotions

Many U.S. citizens would prefer to pay full price rather than negotiate.  Sometimes it is because they feel uncomfortable negotiating and other times it is because they have become emotionally attached to the thing they want to purchase and don’t want to try to negotiate for fear of losing it.

Psychologists recognize the power of emotional attachment and suggest that if you do want to negotiate for an item, do not hold it or touch it because it shows you are already emotionally attached to the item and “own” it in your mind, which lowers your negotiating power.

While many of us aren’t privy to private negotiations, a barrage of television shows allow us to watch others negotiate—successfully and unsuccessfully.  If you have ever watched TLC’s Say Yes to the Dress, you may be surprised, as I often am, to see a woman go into the bridal shop with a firm budget of say, $4,000.  Perhaps a friend suggests she tries on a beautiful dress, and she does.  She falls in love with the dress and sees herself walking down the aisle in it.  It is HER dress.
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Cheap, Inexpensive, and Frugal Halloween Costume Buying Tips

chewbacca-and-yoda-costumes

Who dressed YOU?

Halloween is great fun! I remember how exciting it was going around town in my Halloween costume, getting candy from all of the neighbors.  I still get to enjoy that now through my kids!

Do you remember those old Halloween costumes? You know the ones that came in a box and it was made up of a thin plastic mask with eye holes that hurt and it was held onto your head with an elastic piece that usually didn’t last the night and the body of the costume was a plastic sack-like piece you climbed into which also didn’t make it through the night?  Those were great!  I remember one year I was Chewbacca and another I was Yoda ( I remember terrorizing my younger sister with those masks too; I was such a stinker!).  I’m sure I was Superman and Batman as well.
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Budgeting for Christmas Shopping Before it’s too Late

Shopping for christmas goodies

Yes, it is only just Fall and the leaves are barely starting to change color but before any of us realize it, the snow will be on the ground and Jingle Bells will be playing at the mall (OK, the holiday music will start once Halloween is over).

Budgeting for Christmas shopping now may sound like a chore but it can be the life line you need to avert debt.

Typically when a person goes Christmas shopping and there is no budget, then this gives the illusion of having no limits – and no limits often leads to January credit card bills that hurt.

According to a Gallup poll in 2013, Americans polled expected to spend about $700 for gifts during the holiday season.  Do you have that in your savings, ready to spend on gifts?

Designing a budget helps you to avoid that steep downhill in January; and this helps to keep the happiness of the Christmas holidays lasting well into the new year.
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Rebates are a Sham and I Hate Them

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Rebates, ahh yes, rebates.  They have to be the greatest “catch” of them all when it comes to buying products at a discounted price.  I’ll say it: rebates are a sham!  How many times have you really wanted something and written a check for a rebate thinking you’d see your money back soon but don’t?  Then you get the sinking feeling.  You realize that your money is now gone forever.  It really is a terrible feeling.  Unfortunately, this story is all too familiar for a lot of people out there. Continue Reading

Netflix Price Hike: Your Netflix Alternatives

family watching movie

A little while back, Internet subscription service Netflix, known for providing movies and television shows by DVD or streaming option, informed their 25 million users that they would be increasing the prices of their plans.  Netflix was a popular option for movie buffs, as they had affordable options to watch movies, first by sending DVD rentals to the subscriber’s mailbox.  They then offered virtual streaming of movies and television shows through the Internet and other media devices and game consoles.  Fans of Netflix were furious to know that popular plans would now be more expensive.  What Netflix alternatives are out there now that they raised their prices? Continue Reading

How to Avoid Buying a Used Car Lemon

wrecked_car

It was the summer of 2010.  I had just graduated college and had saved up a down payment for my dream car, a 2004 Acura TL.  I had researched the heck out of that car and it came out on top whenever I compared it to other vehicles.  I was on a mission to get my used car and no one was stopping me!

At first, I tried the used car dealerships.  A found a couple that I loved but my excitement about the cars overtook my common sense.  I narrowed it down to two cars and brought my Dad to help me look and check for warning signs.  At each of the cars we looked at, it took my Dad literally less than five seconds to tell me the car was a lemon.  I was in denial!  How could these cars be lemons!  As it turns out, my Dad spotted spray paint near the bottom of the doors.  Also, when we asked the dealers about maintenance records, they didn’t exist.  According to my Dad, these were signs that we were looking at a lemon.
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