7 good money (habits) after bad

Who is responsible for your money life? Of course, the FI program says, “You are” and offers tools and perspectives for steering your money life back into alignment with your goals, dreams and values. The social sciences of neuroeconomics and behavioral economics can help explain why your brain goes to sleep or gets distracted by baubles – and a recent article from bankrate.com describes seven money traps and how to get out of them. Here’s a summary The lure of free

There is no free lunch, of course. Or free product. The free  sample or free service or first one free are what stores call loss leaders  — meant to lead you in so you will eventually lose your money. No money down doesn’t mean no money ever. No finance charges for a year may lead to mega finance charges later. There is now a free investment advice site, http://www.wikinvest.com/ that is both generated and monitored by users – but it doesn’t mean you can go to sleep. Antidote? Do the math. Slow down. Investigate.That’s why knowing your “real hourly wage” is so powerful. When you can think in life energy, the cost of freebies becomes far more vivid.

The “anchor-price”ploy

Is a $10 glass of wine cheap? If the last one you drank was $15, yes. If it was $5, no. Our brains are wired to compare present situations to previous ones to make good choices – which was handy early in our evolution to keep from eating poison or falling into traps. That’s why in Your Money or Your Life we talk about the “internal yardstick for fulfillment” – being able to look within, not at the Joneses, to determine if a possession or a purchase is “enough” or “too much.” Just because it’s cheaper doesn’t mean you really want it.

Instant gratification

Versus delayed gratification. So many of us live in an environment of advertising and shopping malls, constantly invited to spend now… and now… and now.  The FI program distinguishes between thrill and fulfillment. Thrill is what you feel at the moment of purchase. Fulfillment is what you feel when you use or savor a purchase for many years to come. To avoid thrills that undercut fulfillment, charge your goals and dreams with vivid imagination and emotion. If you dwell on how great FI3 will be, what you’ll do, how you’ll feel, where you’ll go, then ‘forego-ing’ the daily shopping thrills is much easier.

The next four habits -  Dollars-to-donuts decoy, Separate-buckets blunder, “Sacred-fund” slip-up, The lost-money fallacy – I’ll summarize in a future post. Or just go read the article!