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Don’t Fall For These 6 Psychological Money Traps That Make You Spend More!

Don’t Fall For These 6 Psychological Money Traps That Make You Spend More!

When it comes to the numbers of money, many times psychological quagmires overrule rational thought. What we may originally think is a great idea, turns into a gigantic pitfall. Take a look at these psychological money traps and see what you can do to avoid them.

1. You don’t know when to pull out.

Otherwise known as the “Sunk Cost Fallacy,” this trap occurs when we believe that just because we already own or have invested in something that we must keep it. If you find yourself saying, “I have to keep this going, in order to recoup,” or “I will just wait and see if I make my money back.” Then this is probably your pitfall of choice. Both of which are understandable yet counter intuitively irrational thoughts. There are certain times when projects or investments should be simply be abandoned.

How to avoid this trap: Don’t become too emotionally attached with your investments. Most often the reason why we hold onto investments or projects longer than we should is so that we are seeking to prove that it was a wise choice in the first place.

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2. You fall into the allure of the word Free.

I completely get it, the word free is extremely enticing. However, don’t let the perception of the word lead to irrationality. Free isn’t always free and many times it is already factoring into the price of other goods and/or services.

How to avoid this trap: Slow It Down. While the allure of free is nice, you do not want to jump into a rash decision and regret it later. Take into account a couple of things: first, how much do I need this free item and more than likely the service or good I have to purchase in order to obtain it? Secondly, quickly calculate a cost estimate that is likely to go with that item. For instance, if there is an offer for a free <insert item you may not have needed here> you should consider your maintenance and upkeep of the item before accepting such an offer.

3. You Rush to Buy Things.

It is completely understandable that when the salesman is reiterating that this sale is for today only and there is a very very very small amount left, you want to buy it immediately. Or, you see a new pair of shoes and you just have to have them. However, by quickly jumping into the purchases you put yourself in a position where it’s possible that you will become upset with the product a few days or weeks down the line. While immediate gratification is nice in the beginning it quite often leads to buyers remorse. More often than not, typically you then have a hard time saving money for other more important things as well.

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How to avoid this trap: It is completely understandable that you want to reward yourself. So measure what you are considering purchasing against long term goals. Realize that if you buy those shoes you won’t be able to eat at as nice of a restaurant when you take your vacation to San Diego.

4. You have cash piles at home even when you are in debt.

This is otherwise known as mental accounting where you separate money and/or debts based on predetermined status like the source of the money or what you initially set it aside for while it is done with the best intentions at heart, it is a recipe for trouble in the long run. The problem with this method is because you are most often accumulating debt much faster than the “money jar” or other methods savings you have set forth. Having a separate pile of cash for food and another for gas may also seem like a good idea initially, but both prices and our needs fluctuate with time. While you may need $500 in food and $150 in gas for the month of January. You might need to adjust that for summer months when you are munching on salads and taking road trips. Participating in mental accounting provides you less flexibility.

How to avoid this trap: Allow all money that you have to be a part of your financial plan. Also, try to change your perspective of your finances and look at it on a holistic level. Keep in mind that money is money no matter what is the source or intended purpose. A quick change may result in a more positive financial result.

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5. You base your buying decision on the default option.

While you may originally believe that a company providing you with a default option is a matter of convenience to the customer in actuality can be done in a manner to persuade your choices and buying habits. If done properly the default effect (where you allow the default option to influence your decisions), shows the same evidence as nudging. Psychologists have narrowed it down to work in three manners: Loss Aversion, Cognitive Effort, Switching Costs.

How to avoid this trap: Keep in mind how much of a product you actually need. Just because a large soda is only a 60 cent upcharge, will you actually drink it or will you end up wasting it? If you aren’t going to have a need for that soda or anything else that requires an upcharge, your money will be better spent elsewhere.

6. You invest in something just because you’re familiar with it.

Otherwise known as the ‘Familiarity Bias’, it is a tendency that causes you to do things such as invest in stocks for companies we work for or only look to investments from a close area or proximity to where you live. Familiar biases can be a money trap because even though you may be familiar with a company or the area they are based in, it may not be the best or wisest investments. While it makes sense to factor in things such as transaction costs, basing an entire invest just because you are familiar with something is illogical.

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How to avoid this trap: Be willing to step out of your comfort zone. Expand you research outside of your typical areas. If there is one thing that investors mention until they run out of breath is a diversified portfolio. Also, speaking with or bringing in a professional may be a good use of your time and resources. Don’t forget that mother knows best, “don’t put all of your eggs in one basket.”

If you’ve managed to navigate through life and not fall for any of these traps, then kudos to you. However, if you are like the majority of us, follow the above suggestions and your financial future will be certain to be brighter.

Featured photo credit: Cohdra via mrg.bz

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Published on January 17, 2020

How to Eat Healthy on a Budget (The Definitive Guide)

How to Eat Healthy on a Budget (The Definitive Guide)

Have you ever looked at health gurus and wondered how on earth they can afford all that health food? Or maybe you’ve tried multiple times to start eating healthy only to find the $600 monthly budget overwhelming?

If you’re anything like me, you know exactly what I’m talking about! I absolutely understand the sinking feeling of looking back over a grocery budget and finding you went way over what you intended. And besides that, it can be hard to justify buying a tiny $5 bag of carrot chips while a $1 mound of potato chips is sitting right next door.

My husband and I recently ran into that struggle. We got married this past year and soon found ourselves trying to balance 12 hour work-days with keeping our relationship strong and trying to keep our personal businesses afloat. Granted, our budget was the one thing that took a hit! After we started tracking our spending, we were shocked to see we were spending over $1000 a month just on food! A little planning cleared that right up.

So, how to eat healthy on a budget?

Here’re the top tips I learned that helped us shave over $600 monthly off of our food budget so we could reinvest that in the areas that really mattered to us![1]

1. Meal Plan

You’ve probably heard the saying “Fail to Plan, Plan to Fail” right? Well, this saying couldn’t be any more true than in the area of healthy budgeting! The fact is, most healthy foods don’t actually cost that much… the pre-made time saving ones do!

If you go about creating a healthy meal plan within your budget, you could easily cut costs down to around the same price you are paying for junk food.

Meal planning is as simple as working in foods you already have in your fridge/freezer, adding in several meals with simple ingredients and seasonal veggies, and breaking it down into a shopping list.

Often, finding a few meals to make in big batches will save you the most money in the long run, which leads me to my next point.

2. Cook in Bulk

Not only will cooking in bulk save you a whole lot of time, it will save you a whole lot of money too! Believe it or not, if you find meals to make with similar ingredients, you can easily save more money than when you were eating unhealthy.

Don’t believe me? Just look at a $4 frozen pasta dinner. Now, sub that with a veggie pasta dinner. 5 zuchinni ($3), Pasta sauce ($2.50), and chicken ($5) could last you a full 5 meals which adds up to a whopping total of just over $1 per meal!

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That’s not even digging in to all the money you will save from fast-food. Trust me, a little $10 spent here and there add up! You’ll be saving a whopping amount from all the meal prep you will do!

3. Cook all Your Meals in One Day

The science behind this is 2-fold.

Number one, if you have lots of meals to grab and go, you will be far less likely to binge on pricier food when you get hungry. Let’s be real, you’re not going to spend 1 hour cooking when hub-n’-grub is at your bekon-call!

Number 2, meal prepping ahead of time will help you stick to your meal plan better when you’re not in the mood. Let’s face it, we’re all going to have days when protein and veggies doesn’t exactly sound appealing. But, if you have a full meal that’s quick to grab in the fridge, it will be easier for you to fill up on the good stuff rather than spending money on what you don’t really need.

4. Cut Back on Snacks and Specialty Items

I can almost hear you from across the screen. “But, I thought snacks were good for me!” Here’s the deal: Snacks are expensive! And healthy snacks, oh my goodness, say goodbye to your paycheck!

Look, I’m definitely not saying that healthy snacks are bad. Quite frankly, I would much rather you chow down on Halo Top than a triple-butterfinger-fudge sundae. It’s just that… healthy snacks are why eating healthy gets a bad rap for being expensive.

Look at it this way: You could either buy a week’s worth of groceries full of chicken, fish, beans, veggies, and fruits for $30. Or, you can spend that $30 on six snacks that will leave you hungry for more.

What’s more, the ingredients for gluten-free baked goods, sugar free substitutes, or protein powders alone will add up to you eating a full week’s budget in one sitting. By all means, if you want to work some yummy items into your budget, do it! But don’t confuse that extra monthly $300 of delicacies as a necessity. Your body and budget will thank you!

5. Satisfy Yourself with Your Favorite Subs

We all have an emotional tie to food. Maybe pasta reminds you of home! Or maybe a fresh-baked pizza is what gives you a feeling of comfort. Whatever you favorite food, find a way to work it into your budget in the best way.

We’re only human, and depriving ourselves of what we love will never end well. More often than not actually, it ends in take-out or a pricey-premade substitute.

Instead of finding yourself in this situation, find a way to make your favorite foods fit your budget. Zuchinni noodle pasta might just give you that feeling of home without breaking the bank. Or maybe you could google a healthy pizza alternative you would like that you could make at home. Often, something similar to your craving will be enough to give you a sense of satisfaction.

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Or, just buy your cheat meal and save it for a special day. That’s okay too!

6. Stick to the Cheaper Proteins

Okay, I know we all love steak. Unfortunately, buying pre-cooked or expensive cuts of meat are one of the easiest ways to drain a budget.

Instead of purchasing those, try buying frozen chicken or eggs. A 5 lb bag of frozen chicken can be as cheap as $5, and you can buy a whole weeks worth of eggs for just over $1. You could even try going vegetarian for a few meals if you really want to cut down on costs!

7. Buy Frozen Fruits and Veggies

I know, we all love our fresh fruits and veggies! However, sometimes frozen might be the way to go if you’re looking to cut costs!

Fruits and veggies are easiest to ship when frozen, making them a much cheaper option. Contrary to popular belief, scientists have actually found that frozen might be better for you too![2]

The reason is, frozen produce is picked at its prime and shipped immediately. Fresh fruit tends to be picked much earlier so it will ripen while being shipped. Not only does this make it less nutrient dense, but sometimes the fruits are actually pumped with artificial flavors to make up for the lack of real nutrients.

While I’m all for fresh fruits and veggies, don’t feel guilty if you opt for frozen foods due to a budget.

8. Bump up the Calories with Rice and Beans

The problem some people find when trying to eat healthy is that it can be hard to get the amount of calories you need without relying on expensive “specialty” items. Instead of stocking up on pricey gluten-free breads and pasta, I say stick to simple rice and beans as the bulk of your meals.

Brown Rice is very cheap and easy to use as a base for bowls and dishes. Likewise, beans can add a bit of fiber making you feel full and satisfied without having to spend a lot of money.

If you are trying to cut on body fat, use extra veggies as the bulk of your meal and add in rice and beans as a filler.

9. Try Acai Bowls

Acai Bowls can be a really cheap and satisfying meal as long as you do it right.

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You can find cheap fruits at most stores or just freeze your fresh fruits before it goes bad.

Making your own granola can save you a lot of money as well. The total cost for this delicious meal should only add up to a few dollars compared to triple that price if you were to buy one pre-made.

10. Make Your Own Meal Kits

Do you like your meals freshly cooked? Sending meal kits to your doorstep is an easy way to drain your budget. Instead, try making your meal kit at home! Not only is it fun, you will easily get a delicious taste.

Simply find a few simple meal cards or print some out and fill a ziplock with the ingredients for each specific day. Don’t know what recipe to make? Another option is to order one month of meal kits and recycle the recipe into ingredients for the upcoming months with ingredients you picked up from the store.

11. Don’t Drink Your Calories

A few dollars spent here and there can really add up! Just as with specialty items, healthy drinks can be a blackhole for you. An energy drink and kombucha and coffee each day could easily have you spending and extra $300 each month!

I you really need a special drink fix, try making your favorites at home. Bring a coffee in, make kombucha, or even try making lemonade with stevia or a healthy soda. You’ll be surprised w hat a big difference such a small change can make on your budget!

12. Buy Cheap Online

Just like anything else, it pays to be prepared. Buying foods from online retailers can be a really affordable way to save money as long as you’re prepared.

Plan ahead for those more expensive specialty items you can’t live without. It will save you tons of money compared to having to buy food from a specialty store.

13. Don’t Fret about the Clean Fifteen

One of the huge things that can mess with a person’s budget is eating organic. For the record, I am 110% all for eating organic whenever you can. However, for some people, it can be hard to make organic food fit into a budget.

Instead of scratching healthy eating for a smaller budget, try to buy meat and the dirty dozen organic, and don’t go crazy about the rest. The clean fifteen are the fifteen safest foods to buy that aren’t organic! Meanwhile, the dirty dozen is the most worthwhile avoiding. According to Produce Retailer, these are the dirty dozens:[3]

  1. Strawberries
  2. Spinach
  3. Kale
  4. Nectarines
  5. Apples
  6. Grapes
  7. Peaches
  8. Cherries
  9. Pears
  10. Tomatoes
  11. Celery
  12. Potatoes

14. Pay Attention to Storage

Keeping the food you have is just as important as how much food is in the first place. Try to stay on top of how much produce you can actually use before it goes bad. It might not be a bad idea to pencil an extra shopping trip in the middle of the week to keep food fresh.

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Investing in good food storage containers could go a long way in saving you in the long run as well.

15. Freeze Food Before it Goes Bad

Instead of getting mad at yourself at the end of the week for all the wilted produce you need to throw out, try freezing it before you get to that point.

Most frozen veggies will taste delicious in stir fries and soups. You can freeze fruits to make sorbet or smoothies. Frozen greens can be chopped up and tossed into just about anything for a nutrient boost!

16. Consider Ditching Most Supplements and Powders

I have nothing against superfood powders and supplements. However, if your budget is tight, it can be hard to fit supplements and powders in.

Instead of adding in powders, add extra nutrients to you food. Add lots of greens and veggies to all your meals to meet your nutrient needs. If you need a specific supplement, you can find great deals online as well!

17. Use Budget App

There are so many great apps you can download for free. One of my current favorite is HoneyDue because you can track your budget easily with your spouse. There are many options available, just find the one that you’re most likely to use. The ones that download your spendings automatically are often the easiest and will give you a more accurate number.

My husband and I use the same app, but have a separate budget for each of our weekly food plan and for our additional snacks. Keeping things separate can often be helpful to know exactly where your money is going. Plus, it can help hold you accountable if you have a significant other you are sharing money with.

18. Use What you Have

Most people have unused protein powders lying around in their cabinets. Instead of letting that go to waste, work them into your meal plan. Protein powders can make amazing doughnuts, pastries, or pancakes!

19. Enjoy the Process!

Finding ways to enjoy your new lifestyle will be helpful in sticking to it long term. Find fun in seeing how much you can save each month. Make a competition with someone to see who can stick to the lowest budget and create something fun to do for the winner with some of the money saved! Blast some music in the kitchen while cooking your new recipes.

Budgeting and health doesn’t have to be a drag. Make it fun and you’ll enjoy your new lifestyle long-term!

Featured photo credit: kevin laminto via unsplash.com

Reference

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