Mental accounting, car insurance, debt and weight, divorce and more.
The College Investor — Let’s start with what “mental accounting” means. It’s “the tendency of humans to develop and make decisions based on purely mental categories.” Jay uses tax refunds as an example. Every year this money becomes a new and separate financial category — because people mentally create it.
And because it “was never factored” into our budgets, many consumers spend it recklessly. He provides a bunch of other categories, like bonuses and birthday money. He also includes “How to Stop Mental Accounting.” This may sound complicated, but once you read the post it all makes sense. Check it out — and put that tax refund in your emergency fund.
Student Loan Hero — This may come as a surprise but it’s true. Katie says “Insurance companies take data from your FICO credit score and create their own auto credit score.” Data may include payment history, credit utilization and more. Esurance says “credit scores can accurately predict accident potential.” Crazy, right?
Maybe so, but she reveals how much people with great credit scores save compared to those with merely good scores. Read this post and you might find less expensive insurance rates — after you follow her advice. Also, check out this post on car insurance myths and facts.
Money Talks News — This is win/win — especially post holiday season when both debt and weight balloon for many people. Geof provides 10 ways “to reduce your credit card balance and your waistline at the same time.” The fifth way is interesting and seems nonsensical when you read it: “eat less, pay less” by buying food in bulk. Geof argues that if you buy in bulk and weigh and measure the food you eat, you’ll probably eat less. But this requires discipline.
The seventh way is: “Take the stairs.” Avoid the elevator at work. I worked on the fourth floor once and always used the stairs. I also walked the stairs after eating lunch. It’s good exercise and actually wakes you up when you’re suffering from the dreaded mid-afternoon crash. After you finish this post, read more about money and losing weight.
The Dollar Stretcher — Brianna says “Most studies show that 40-50% of marriages end in divorce in North America.” Avoid divorce and the costly outcome ( U.S. divorce costs average $15,000), by reading this post. She quotes a doctor who works with couples and families and his advice is “engage in collaborative activities as a couple.” In other words, do stuff together.
Makes sense, right. Unless you can’t stand hanging out with your spouse. Otherwise, try the five couples-oriented activities she provides. I enjoy the fourth one: “Exercise together.” You get in shape and have fun watching each other endure nearly intolerable pain. Or just take a walk together. Check out the other four things then read this post on money and marriage.
Scott Alan Turner — Budgeting shouldn’t destroy your personal life — especially if you do it properly. But if you don’t budget, Katie lists seven possible consequences. The first is “being broke.” The other six aren’t much better. The obvious alternative is budgeting and Katie provides four “tips on how to have fun on a budget and still maintain your relationships.”
The first is incredibly important: “Plan ahead.” If you don’t plan, your budget and spending will unravel quickly. She calls herself “the cruise director in my house.” She makes plans and budgets accordingly. A night at home with friends who bring snacks and drinks is inexpensive. A night on the town is expensive. Plan accordingly.
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Article last modified on November 20, 2017. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Around the Web: Mental Accounting - AMP.