Common advice about controlling spending is to track all your purchases and add them up each week or month. I believe that this is effective, but have been fuzzy on why it seems to work so well. Why can’t people just spend less without the constant reminder of how well they are doing? I got some insight on this question from, of all places, poker. For poker players there is a certain thrill to dragging in a pot of chips. The thrill is there whether it is a $1 pot or a $10 pot. The $10 pot gives a bigger thrill, but not 10 times bigger. Similarly, losing a $10 pot feels worse than losing a $1 pot, but not 10 times worse. This leads to some players playing in such a way that they maximize happiness by taking in many small pots, but losing some big ones. As long as they don’t count their dwindling chips, they can actually be happy playing this way. Counting your chips is a lot like adding up your spending at the end of the month to see what happened. You may feel good about ...
Thanks for the mention, some good comments about Pet Insurance too!
ReplyDeleteThanks for the mention. It seems that retailers are miscalculating the ecofees on various products too, in some cases it can add 50% or more to the original cost of the item. Lots of people calling into the local radio station I listen too with anecdotal evidence. We may see a Canadian Tea Party...
ReplyDeleteThanks for the link Michael. Insurance rates are getting ridiculous in Ontario, let's hope the Auto Reform will bring them back to normal in the long term.
ReplyDeleteThanks for the mention Michael!
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