This is very hard for people to understand this saying which is the title of my blog today. We tend to believe that whatever we get as part of salary or any other means is the only money that we earn and rest we do is just the spending but this is absolutely wrong. Read more to know how and ways that we all can follow in order to have self-control and save unnecessary spending on useless things.
According to the scientific research it has been found that when it comes to saving we look for immediate profit and gain instead of long term waiting and maturity or say locking period. This phenomenon is called as hyperbolic discounting.
For example, if the fees for yearly subscription of a gym is 500 SGD but monthly it is 50 SGD then we would not see that we are saving 100 SGD yearly instead we opt for monthly subscription paying more because we do not know if we would be able to come the complete year.
The market mavericks are making use of this human tendency and packaging the products such a way that we fall prey to them. The package and deals are so enticing that we tend to ignore everything and opt for it no matter if we end up expiating at later point of time.
For example, this is quite widespread in reality business that during a specific festive season, the builders and property dealers will offer gifts ranging from car, refrigerator, AC on the purchase of the house within the given stipulated time frame but eventually if you calculate properly then you would notice that builder is recovering the gift price from the property being targeted to be sold to you.
So the first lesson is to calculate and wise enough to understand the tricks and trips of these marketing gimmicks and people in this business. Do not simply fall for them instead do your proper homework before opting for anything and pay special attention when going for expensive things like house, car etc.
Also, keep your calculation always ready about the liquid cash you have and how much is already placed in the long term savings so that you would have an idea before spending on anything. This will also give you a clear perspective about opting for only the urgently required items rather than paying obnoxiously on useless products.
Also, always go for long term saving plan with maximum locking period because otherwise you will always get tempted to withdraw and splurge that money into something else.
- Written by Administrator
- Category: Money-Manager