Erroneous perception of income and expenses

Some people make a lot of money, others have little income. Some of the potential buyers you can hear that thing are too expensive at the time, others consider this product too cheap. And “a lot” and “expensive” is how much?

It turns out that for understanding a little money or a lot, need something to compare and consider the situation in context. For example, against the salary of the head of your own seems small, but looking at the ratings of the financial magazine Forbes, the head is not regarded as a wealthy man. A donation in the amount of 200 dollars, for example, in a shelter for homeless animals seems great. But if you think about that for that money you can buy one cup of coffee, the same amount is negligible. Further complicating the assessment of erroneous perception, which many people do not even think.

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Example 1

When buying a car the dealer offers a discount of 1000 dollars. The client most likely will not feel the difference, paying 357 or 358 thousand dollars. The mat cost 1000 dollars as a gift or the same discount, but purchase insurance for the price of 4 thousand dollars instead of 5, will cause a sense of savings and deals.

Conclusion: in reality, will not have difference from the purchase amount in the wallet there was an extra thousand dollars. No need to compare the discount with the price of the goods.

Example no. 2

On the shelf in the shop there are three kinds of cheese for 100, 500 and 1000 dollars per kilogram. Most buyers will opt for the middle price category. Coming home and having no other objects to compare, the buyer ceases to feel the difference. This can be seen for any goods, standing side by side with more expensive and cheaper alternatives that is widely used by marketers, marketing slow-moving products.

Conclusion: next time, choosing a cheese sandwich for breakfast, it is better to look at the composition, not the price.

Example no. 3

The probability to win at the casino or lottery is comparable to burning money. However, people buying lottery tickets or betting, quite a lot, but those who are torn or washed notes in the toilet, to meet not just. The fun of waiting for the freebies and excitement prevent to assess the real chances of winning. Oil on the fire pour generously marketers, clearly talking about a single winner and the loser says nothing about the millions of people.

Conclusion: do not waste money and time on unprofitable activities.

Example no. 4

A well-known brand produces a new product at a higher price. In most cases changing only the packaging or design of the product without significant changes of the composition. So you see chewing gum and chocolate with a new flavor, electric kettles new forms, phones with a housing of another color, etc.

Conclusion: when purchasing new items should assess the magnitude of changes compared to the previous model and the appropriateness of the overpayment.

Example no. 5

When the discount information on the product or service many of the feeling the benefits. But the tour in a hot country for half the price, tv with a discount of 90% or two pairs of shoes for the price of one will not necessarily be a good purchase. Most likely, the initial cost was greatly inflated.

Conclusion: buying a product or service in action it is necessary not to focus on the discount and compare it to the original prices with similar products.

Example no. 6

Income received a one-time large sum. A feeling of wealth and ability to afford larger purchases. As a result, the money spent by the end of the month is not even enough for bare necessities, you have to apply for the borrowed funds and incur losses on interest.

Conclusion: when you receive income, regardless of its size first to make a scheduled payment and subtract the amount that will be enough “life” to the date of your next income, and the rest to spend.

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Example no. 7

Tomorrow you need to make a payment on the loan, and the amount seems huge and have nowhere to take it. Every month loan payment is stressful. But if you start to make partially during the whole month in small amounts, a feeling of a large payment will be lost. By the end of the month will have to pay only a small remnant.

Conclusion: large payment to pay small amounts is psychologically easier.

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