Phil's Personal Finance Tip of the Day:
5 Habits You Didn’t Know Were Costing You
Everyone has bad habits. Maybe you obsessively check Facebook while at dinner with friends, arrive late to meetings or interrupt people when they’re talking. Chances are you’re at least sometimes aware of these bad acts. But you might not realize how other habits are costing you actual money.
And we’re not talking about a daily Starbucks fix. If you get pleasure out of those lattes, by all means enjoy them.
But some other under-the-radar tendencies can end up sabotaging your financial health, and you may not even realize it.
1. You shop with friends
Shopaholics are typically portrayed by women in popular culture. But at least in one respect, men can out-shop women. A 2011 study, “The Influence of Friends on Consumer Spending,” found that men spend more when they’re accompanied by a friend than when they’re alone, and the effect wasn’t the same for women.
The results of four experiments showed that men shopping with a buddy spent 54% more than men shopping solo, while women spent about the same whether they shopped by themselves or not. The authors posit that the reason for the discrepancy comes from a key difference between men and women – albeit a gender stereotype. Men focus on status and “engage in self-promotion through increased spending while shopping with friends” – in other words, they tend to show off – whereas women are “communion-oriented,” meaning they aim for cooperation and harmony, "leading them to keep their spending under control in the presence of a friend."
You buy a new smartphone; it comes with a monthly usage fee based on data consumed, an early termination fee and a complicated two-year contract. The problem: Many people underestimate how much data they’ll use and end up exceeding their plan limit, while others overestimate their future usage and pay for minutes they never use. Oren Bar-Gill, a professor at New York University’s School of Law, studied pricing misperception in the cellphone market, and found that many consumers choose the wrong plan for their needs.
In a 2009 study, Bar-Gill, author of “Seduction by Contract: Law, Economics, and Psychology in Consumer Markets,” analyzed data on the plan choice of more than 3,500 cellphone users and their usage patterns (how many minutes they talked each month for 20 months). He calculated the total amount each paid for service given their chosen plan, as well as the amount they would’ve paid given their actual usage. Bar-Gill found that more than 65% of users signed up for plans that didn’t fit their specific usage patterns, and based on that data, estimated that consumers lose a total of $13.3 billion annually.
To read the entire article from Lisa Scherzer | The Exchange:
http://finance.yahoo.com/blogs/the-exchange/5-habits-didn-t-know-were-costing-143008913.html
Inspirational Quotes@Inspire_Us from Twitter:
Educating the mind without educating the heart is no education at all. - Aristotle
Hi my name is Philip J. Miano and I am the founder of PJM Personal Finance and Productivity Coaching specializing in Budgeting, Debt Reduction, Bank Reconciliations, Goal Setting, Time Management, and Organizational skills. Please visit my website: http://pjmcoaching.com.
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