Author Topic: The hidden reasons people spend too much  (Read 3165 times)

sirdoug007

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The hidden reasons people spend too much
« on: November 03, 2015, 12:39:53 PM »
This is a very interesting article about the psychological reasons why people overspend.  I find the part about people's horrible judgement of future expenses very interesting and true to my experience.

This really highlights the necessity of tracking actual expenses.  Our brains just don't work well at figuring that stuff out unless we keep detailed records.

What do you folks think?


http://www.wsj.com/articles/the-hidden-reasons-people-spend-too-much-1446433200

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steveo

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Re: The hidden reasons people spend too much
« Reply #1 on: November 03, 2015, 01:21:17 PM »
I don't budget or track my expenses. I do track my savings and therefore my expenses but only because income - savings = expenses.

I think though in general that there are lots of good points in that article. I think people in general judge expenses assuming their incomes will increase whereas I think most people on here are assuming that their incomes will stop. I also think that people judge their wealth by their salary.

Retired To Win

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Re: The hidden reasons people spend too much
« Reply #2 on: November 03, 2015, 05:43:31 PM »
This is a very interesting article about the psychological reasons why people overspend.  I find the part about people's horrible judgement of future expenses very interesting and true to my experience.

This really highlights the necessity of tracking actual expenses.  Our brains just don't work well at figuring that stuff out unless we keep detailed records.

What do you folks think?

Detailed data is always better.  But I don't need lots of numbers on an Excel spreadsheet to know when something costs more than I ought to be spending on that kind of thing.  I know it in my gut, by instinct almost.  I just guess that quite a few people lack that instinct.

WildJager

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Re: The hidden reasons people spend too much
« Reply #3 on: November 03, 2015, 06:02:48 PM »
I don't budget or track my expenses. I do track my savings and therefore my expenses but only because income - savings = expenses.

I think though in general that there are lots of good points in that article. I think people in general judge expenses assuming their incomes will increase whereas I think most people on here are assuming that their incomes will stop. I also think that people judge their wealth by their salary.

The wealth based on salary though is as prevelant as it is perverse.  To most of us, I think we know why that doesn't logically make sense, so I won't belabor it.  However, it's relatively easy to see who fail to understand why.  The ever present, "I got a raise so I'm going out to dinner/buying a new car!" before the first paycheck even arrives.

 

Wow, a phone plan for fifteen bucks!