Comments on: Psychology of Money: The Last Mile of Saving http://www.iwillteachyoutoberich.com/blog/psychology-of-money-savings/ Personal finance blog for college students, recent graduates and everyone else -- including entrepreneurship -- for getting rich. Featured in the Wall Street Journal and New York Times. Sun, 12 Feb 2012 18:46:58 +0000 hourly 1 http://wordpress.org/?v= By: Randall http://www.iwillteachyoutoberich.com/blog/psychology-of-money-savings/#comment-125860 Randall Tue, 29 Jun 2010 03:16:46 +0000 http://www.iwillteachyoutoberich.com/?p=5736#comment-125860 Hey Ramit! I followed your link to the original Failure of the Last Mile article (http://www.iwillteachyoutoberich.com/blog/the-failure-of-the-last-mile/) where you mention www.bestbuysux.org. I went to check it out since I've had some of my own terrible experiences, and the site has now been turned into "everything that's great about Best Buy." Bummer. And the worst part is, it LIES! But where do I go to complain? Maybe I can start up my own www.bestbuydotcomsux.com site? Is acquiring this website a profitable move for whoever took it over, or a benefit to Best Buy? Does it quell consumer's concerns, or merely inflame them more? Hey Ramit! I followed your link to the original Failure of the Last Mile article (http://www.iwillteachyoutoberich.com/blog/the-failure-of-the-last-mile/) where you mention http://www.bestbuysux.org. I went to check it out since I’ve had some of my own terrible experiences, and the site has now been turned into “everything that’s great about Best Buy.” Bummer. And the worst part is, it LIES! But where do I go to complain? Maybe I can start up my own http://www.bestbuydotcomsux.com site? Is acquiring this website a profitable move for whoever took it over, or a benefit to Best Buy? Does it quell consumer’s concerns, or merely inflame them more?

]]> By: Sudan Gautam http://www.iwillteachyoutoberich.com/blog/psychology-of-money-savings/#comment-125844 Sudan Gautam Sun, 27 Jun 2010 06:23:24 +0000 http://www.iwillteachyoutoberich.com/?p=5736#comment-125844 Telling you the fact before reading this post i has just won the bargaining and thought that i had saved certain amount to spend on something else. I have been practicing this kind of saving habits from last 4-5 years. Now surely i shall practice what i have learned today. Saving is getting into action this is the most powerful statement from your post. Thank you for such a changing habit suggestion. looking for your next post. Telling you the fact before reading this post i has just won the bargaining and thought that i had saved certain amount to spend on something else. I have been practicing this kind of saving habits from last 4-5 years. Now surely i shall practice what i have learned today. Saving is getting into action this is the most powerful statement from your post. Thank you for such a changing habit suggestion. looking for your next post.

]]> By: The psychology of making huge career jumps | I Will Teach You To Be Rich http://www.iwillteachyoutoberich.com/blog/psychology-of-money-savings/#comment-125835 The psychology of making huge career jumps | I Will Teach You To Be Rich Sat, 26 Jun 2010 17:11:12 +0000 http://www.iwillteachyoutoberich.com/?p=5736#comment-125835 [...] Psychology of Money: The Last Mile of Saving » AKPC_IDS += "4986,"; [...] [...] Psychology of Money: The Last Mile of Saving » AKPC_IDS += "4986,"; [...]

]]> By: Rebalancing & asset allocation: critical for investing. So why don’t you do it? | I Will Teach You To Be Rich http://www.iwillteachyoutoberich.com/blog/psychology-of-money-savings/#comment-125834 Rebalancing & asset allocation: critical for investing. So why don’t you do it? | I Will Teach You To Be Rich Sat, 26 Jun 2010 17:09:16 +0000 http://www.iwillteachyoutoberich.com/?p=5736#comment-125834 [...] « Psychology of Money: The Last Mile of Saving [...] [...] « Psychology of Money: The Last Mile of Saving [...]

]]> By: Mark Kenny http://www.iwillteachyoutoberich.com/blog/psychology-of-money-savings/#comment-125771 Mark Kenny Thu, 24 Jun 2010 15:29:52 +0000 http://www.iwillteachyoutoberich.com/?p=5736#comment-125771 Maybe I'm a pessimist, but I always see the "paying less, not saving more" side of things. Unless I get something really great quality for a ridiculous price, I don't feel like I've saved anything -- and even then I still feel like I've spent money rather than saved it. Do you think this is a good thing or a bad thing? Maybe I’m a pessimist, but I always see the “paying less, not saving more” side of things. Unless I get something really great quality for a ridiculous price, I don’t feel like I’ve saved anything — and even then I still feel like I’ve spent money rather than saved it.

Do you think this is a good thing or a bad thing?

]]> By: Anne http://www.iwillteachyoutoberich.com/blog/psychology-of-money-savings/#comment-125755 Anne Wed, 23 Jun 2010 19:26:38 +0000 http://www.iwillteachyoutoberich.com/?p=5736#comment-125755 My biggest problem with this is planning to spend my "extra" $100 5 different ways. I can get really creative with ways to spend money. I get excited, and before I know it I've spent $500 in my head which makes it even harder to put the actual $100 in savings. Because I've already found so many other things I "need." I will also use an extra $100, to justify a $300 purchase that I can't really afford to make. I did a lot of this "saving my way into debt" in my early 20's. I slowly, but surely am working myself out of that mentality. My biggest problem with this is planning to spend my “extra” $100 5 different ways. I can get really creative with ways to spend money. I get excited, and before I know it I’ve spent $500 in my head which makes it even harder to put the actual $100 in savings. Because I’ve already found so many other things I “need.” I will also use an extra $100, to justify a $300 purchase that I can’t really afford to make. I did a lot of this “saving my way into debt” in my early 20′s. I slowly, but surely am working myself out of that mentality.

]]> By: Kathleen Burns Kingsbury http://www.iwillteachyoutoberich.com/blog/psychology-of-money-savings/#comment-125750 Kathleen Burns Kingsbury Wed, 23 Jun 2010 18:27:33 +0000 http://www.iwillteachyoutoberich.com/?p=5736#comment-125750 Yes, we do play games when it comes to how we think about money. My favorite one is when my husband says we "made money" because he got his expense check from his company. For 18 years, I have been explaining that this check covers expenses that were already incurred. But he still likes to see it as free money. I think it makes him feel good to think he is getting bonus cash. Funny how so much of how we think around money is for some sort of emotional gain. Kathleen Yes, we do play games when it comes to how we think about money. My favorite one is when my husband says we “made money” because he got his expense check from his company. For 18 years, I have been explaining that this check covers expenses that were already incurred. But he still likes to see it as free money. I think it makes him feel good to think he is getting bonus cash. Funny how so much of how we think around money is for some sort of emotional gain.

Kathleen

]]> By: Brigitte http://www.iwillteachyoutoberich.com/blog/psychology-of-money-savings/#comment-125705 Brigitte Tue, 22 Jun 2010 18:32:34 +0000 http://www.iwillteachyoutoberich.com/?p=5736#comment-125705 Nope, I'm sorry, but you're wrong. Saving 25% on my car insurance means I have that 25% of the money still in my account. That money is already saved in the bank, simply by not spending it on the item for which it was originally budgeted. I don't need to move it to a savings account for that money to somehow magically exist. Moving it to another budget item where it can do more good may not always be "saving" in the sense that it's in a "savings" account, but it's still in my hands--I've saved it from my car insurance company's hands. I buy my clothes at thrift stores. I don't budget $200 for clothes, I budget $30 for clothes. If I buy a used shirt for $5, there is no way I'm going to put $20 into savings just because I would have paid $25 for that shirt brand new. First off, it's not brand new--it's not WORTH $25. Also, if I put $20 into savings at that point, taking it out of my clothing budget, I now don't have the money to buy shoes I need for work. How in the world is that helping me?? Now, you could say, "oh you don't take it out of your clothing budget you take it out of your checking account." My budget is based on every penny I earn. I don't have "extra" money in my checking account, I have budgeted money that hasn't been spent yet. Maybe I budgeted $10 for buying a shirt and found one for $5--You can bet I'm going to spend that extra $5 buying a new pack of underwear that isn't stretched and faded, or some socks without holes in them. But I'm not going to put it into a savings account. Nope, I’m sorry, but you’re wrong. Saving 25% on my car insurance means I have that 25% of the money still in my account. That money is already saved in the bank, simply by not spending it on the item for which it was originally budgeted. I don’t need to move it to a savings account for that money to somehow magically exist. Moving it to another budget item where it can do more good may not always be “saving” in the sense that it’s in a “savings” account, but it’s still in my hands–I’ve saved it from my car insurance company’s hands.

I buy my clothes at thrift stores. I don’t budget $200 for clothes, I budget $30 for clothes. If I buy a used shirt for $5, there is no way I’m going to put $20 into savings just because I would have paid $25 for that shirt brand new. First off, it’s not brand new–it’s not WORTH $25. Also, if I put $20 into savings at that point, taking it out of my clothing budget, I now don’t have the money to buy shoes I need for work. How in the world is that helping me??

Now, you could say, “oh you don’t take it out of your clothing budget you take it out of your checking account.” My budget is based on every penny I earn. I don’t have “extra” money in my checking account, I have budgeted money that hasn’t been spent yet. Maybe I budgeted $10 for buying a shirt and found one for $5–You can bet I’m going to spend that extra $5 buying a new pack of underwear that isn’t stretched and faded, or some socks without holes in them. But I’m not going to put it into a savings account.

]]> By: U. Romilion http://www.iwillteachyoutoberich.com/blog/psychology-of-money-savings/#comment-125689 U. Romilion Tue, 22 Jun 2010 15:36:26 +0000 http://www.iwillteachyoutoberich.com/?p=5736#comment-125689 I completely subscribe to your point of view, MP, regarding the need to make also the last mile of saving: you saved nothing until you’ve got the money in the bank (or where-ever you usually put it). For me this is another form of building financial self discipline and pushing yourself towards more savings. By moving more money from my checking account to my savings account, the threshold to use that money becomes higher (I really hate to take any money out of my savings account and almost never do it except for long term investments). This takes away some of the financial slack on my checking account that I tend to use more impulsively than I’d want to. I sort of hate to admit that I still need this kind of discipline building, but the truth is that it seems to have become even more important over the years as I have managed to build a considerable asset basis. Earlier, when I was really driven to get wealthy, it was easy to be very disciplined about saving money. Now that I’ve already achieved what I originally aspired for, I need that extra discipline to keep focused. I believe this is really necessary though: wealth makes it easy to evolve into spending habits that first seem innocent but gradually grow and grow until they really start eating into your wealth. Thanks again, MP, for reminding us of this last mile that helps to ensure many more miles on our journeys towards financial happiness. I completely subscribe to your point of view, MP, regarding the need to make also the last mile of saving: you saved nothing until you’ve got the money in the bank (or where-ever you usually put it). For me this is another form of building financial self discipline and pushing yourself towards more savings. By moving more money from my checking account to my savings account, the threshold to use that money becomes higher (I really hate to take any money out of my savings account and almost never do it except for long term investments). This takes away some of the financial slack on my checking account that I tend to use more impulsively than I’d want to.

I sort of hate to admit that I still need this kind of discipline building, but the truth is that it seems to have become even more important over the years as I have managed to build a considerable asset basis. Earlier, when I was really driven to get wealthy, it was easy to be very disciplined about saving money. Now that I’ve already achieved what I originally aspired for, I need that extra discipline to keep focused. I believe this is really necessary though: wealth makes it easy to evolve into spending habits that first seem innocent but gradually grow and grow until they really start eating into your wealth.

Thanks again, MP, for reminding us of this last mile that helps to ensure many more miles on our journeys towards financial happiness.

]]> By: Scott http://www.iwillteachyoutoberich.com/blog/psychology-of-money-savings/#comment-125687 Scott Tue, 22 Jun 2010 15:22:01 +0000 http://www.iwillteachyoutoberich.com/?p=5736#comment-125687 My thoughts exactly. My thoughts exactly.

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