Golden packaging “means” something is of high quality; regal. Green packaging means how good something is for us. Red stimulates appetitive and aggression; fun. Purple denotes something that is rare, worth the extra money.
You can lead a horse to water, but you can’t make him drink.
Money is Sexy
Money is Sexy2012 Edition
RulesKeep stories to a minimumSave big questions for the endInterrupt politely
black background, white stripes? orwhite background, black stripes?
Question What is the difference between gross income and net income?
Gross Income vs. Net IncomeGross Income is what the employer agrees to pay the employee. It doesn’t take in account taxes, benefits and other deductions.Net Income is what the employee receives after deductions and taxes.
Did You Know$100 in 1960 was equivalent to $670.09 in 2005? The value of dollar things haveWhat wouldthe most risen. And value of our has fallen. you $100 to buy in the 1960s would cost you more than $600 today.
Price and Income Gap• Income = blue line, Price = red line
How Budgets FailYou don’t think you need oneYou think a budget limits your spendingYou use inaccurate informationYou don’t protect yourself from yourselfYou don’t make short-term and long-term financial goalsToo much Facebook
Monthly Payments = Affordability Just because you can make the monthly payments doesn’t mean you really can afford it.Can you really afford the car payment once you consider gas, insurance, repairs, maintenance, and all other related costs?
Think In Terms of InterestAn ATM will charge you on average $2.50 to withdraw money from their machine. Let’s assume we withdraw $20. $20 + $2.50 = $22.50 $2.50 per $20 = 12.5% APR or 150% APY (12.5% x 12 months)
Study of Americans’ spending habits says each hour of weekly television viewing correlated to an increase in spending of $200 annually.
The Truth About SpendingStatistically speaking, Arnold says, people spend 12 to 18% more when they pay with a card -- credit or debit -- than when they use cash. "Bear in mind that even if you are proactive and monitor their account online, theyre still statistically going to blow through that allowance quicker,"
Watch What You Say Sometimes we say things to convince ourselves how to spend our money. “It’s only $20 dollars.” “It’ll only cost me $10 a month.” “It comes out to just $100 every year.”
Look But Don’t Touch!Studies show the longer a person touches anobject, the greater the value is for that item.Meaning the longer you touch something, themore likely you are to buy and pay even more forit than its sticker price —irrespective of if you evenhave a need for it.
Real Life Examples Car dealerships Costco, Sam’s Club (free samples) Furniture store Yard/Garage Sales & Flea Markets Pretty much any clothing store Any more?
Take the Free Sample and Run!Obviously, free samples are supposed toencourage you to buy that product. But, thechances of you buying the product increase if youhave a conversation with the vendor. Yes, thatrelationship, despite how small and harmless,from friendly chit-chatter often leaves you with asense of obligation to buy.
The Fear of Missing OutRetailers like Costco are infamous for selling anitem for a short period and then taking it away tonever be seen again. Couple that with theassumed discount you’re getting because you’reshopping at a warehouse club store and thetemptation might be too strong to escape.
Read Between the SignsBe careful of loud signage that screams “lowprice” or “hot deal”. It can give you the falseimpression of a bargain that’s not even there.Another tactic, “bargain” bins of a mix of stuff withbig signs and a single digit price.
Sneaky Economics 101 Remember the supply and demand curve? When supply is up, price is down. That’s how we tend to think so that’s why retailers like to display a lot of one thing in big piles or stacks. Our line of reasoning is that there is so much of it, it must be at a bargain. Wrong. The reverse tends to happen when we see few of one item.
We’re Already Here, We Might as Well ShopWarehouse Clubs don’t have many locations andmany times people will make a trip out of visitingthem. If you view the trip as longer then a normaltrip to the grocery store you might be inclined tospend more. Plus, you’re likely to spend sometime there browsing around. Who goes toDisneyland for two rides? Plus, the stores are sohuge you want to explore every nook and cranny.
Don’t Be a Glutton Warehouse Clubs allow you to buy products in bulk. But sometimes when we have so much of something we tend to be wasteful of it.
Dirty Little StoreStores often jack up prices to maximize profits An anonymous Target employee admitted if something is selling really well at, say, $9.99 the store will raise the price to $13.99 (and then mark it on sale)
“Shop Today and Save 50% Next Week” Why you fall for it : The promise of bigger savings in the future appeals to people who think they can game the system.
“Limit Five Per Person” Why you fall for it : Limits trigger a feeling that the deal is so great that, if not for that limit-four-per-customer rule, shoppers would be filling their carts to the brim, leaving none for you. According to a 2007 study in the Journal of Retailing changing the structure of a sale from “Buy two” to “Buy eight” resulted in a 55% increase in sales — regardless of the price of each option. Why do you think they’ll put limits on big purchase items like laptops? Who buys more than one laptop at a time?
“Our big sale ends tomorrow/today/in an hour” Why you fall for it : Fear, pure and simple. This tactic appeals to a basic instinct to grab what’s available or be left without. Think of the crowds stocking up on bottled water and canned goods before a major storm comes through. In those frenzied hours, it’s a matter of survival.
“Get 23% Off” Why you fall for it : Real estate brokers have long known that uneven pricing (say, $524,755 versus $525,000) catches buyers’ attention, because those odd numbers suggest a bargain that has already been marked down -- whether that’s actually the case or not. Amazon.com recently advertised discounts of “up to 61%” on its bulk groceries, for example.
“Get a Free Gift with a $50 Purchase” Why you fall for it : A 2009 study from researchers at New York University and California State University found that promotions were more effective if they highlighted the product to be purchased, rather than the gift. It’s the retail equivalent of finding money on the ground. And shoppers equate added value with a discount — even if they’re spending extra money to get a freebie they wouldn’t have otherwise purchased and might not even use.
Sure that’s an Investment?Be careful. You’ll hear the word “investment”being thrown around when it has nothingreally to do with the true definition of theword.The word “invest” is often used when peoplespend more than they know they should andwant to convince others as well asthemselves that they made the right decisionfrom a financial standpoint.
Spending vs. Saving Please don’t confuse spending with saving.The only true way to save is to not spend
“These boots are regular price $150 but they’re on sale for $100. I’m saving 50 bucks!”
What do they know?They know it’s something (new) without difficult for a person to weighthe true value of comparing it to something else.
What does smooth jazz or Sade have in common with grocery stores?
What is the best deal?☺Buy 2 , Get 1 Free☻Buy one for $4.00
Pay AttentionNo clocksWhen you walk in a store, are you always right?Most recent/expensive at eye levelProduct positioningThey pick the colors on purpose
Are Credit Cards Making You Fat? According to a new study published in the Journal of Consumer Research, paying with a credit card instead of cash leads to more impulse food purchases, and most impulsefood purchases are not of the healthy variety.
Two factors contribute to this intriguing effect. First, there is a correlation between unhealthiness and impulsiveness of food items: Unhealthy food items also tend to elicit impulsive responses. Second, cash payments are psychologically more painful than card payments, and this pain of payment can curb the impulsive responses to buy unhealthy food items...
A Credit Score Measures New Credit 10% Types of 10% CreditLength of Credit History 15% Your Outstanding Debt 30% } Credit Score Payment History 35%
How Long Does Information Remain? Negative information 7 years Bankruptcies 10 years Judgments 7 years Student loans 7 years Inquiries 2 years* Closed bank/credit union 5 years accounts (on ChexSystems Network)
Credit – Hard/Soft InquiriesHard inquiries Soft inquiries•Mortgage applications •Consumers pulling•Auto loan applications their own credit files•Credit card •Lenders sending you aapplications pre-approved credit offer in the mail•Personal loanapplications •Lenders with whom you have an existing•Collection agency relationship viewingskip-tracing your credit periodically
Unexpected Items on Your Credit Report Late fines for library fees Unpaid parking tickets Unpaid child support payments Unpaid utility bills
Consider this…Experts estimate that you lose 1 point for every percent of your credit limit that you use. So if you have a total credit limit of $10,000 and have an outstanding balance of $4,000 (40%), your score would be 40 pointslower than if youhad a $0 balance.Ideally, credit experts say, your never want your balance to exceed 30 percent of your credit limit.
Debunking – Credit Cards & ReportsWait, so closing credit cards won’t bring down my score? Even after cancelling and disappearing from report will hold on to that payment history regardless. 7 years for negative information. 10 years for positive information.
Debunking – Credit Cards & ReportsCredit Utilization Ratio…really is important Looks at total used credit and total available credit. To avoid getting dinged close credit cards only when there is zero balance on all active credit cards. BTW, those with the best scores on average have 10% credit utilization ratios.
How to Close Credit Card w/o Getting Dinged1. Pay off card in full2. Call customer service to ensure balance is really zero3. Cancel the balance over the phone4. Ask for written confirmation5. Wait, and check credit report to see if account is really closed
Lower Credit LimitIf you frequent your credit card ask to lower the limit so you’ll have less to spend. But be careful of the credit utilization ratio! If you lower your credit limit but don’t reduce your spending you can risk maxing out your card. They say you shouldn’t spend over 30% of your credit limit.
Debit Card vs. Credit CardAutomatic withdrawals (ACH electronic funds transfer) are not protected from overdraft feesUnder the Truth in Lending Act, consumers maximum liability for unauthorized use of their credit card is only $50, and when a card is used online, its zero.Over-pumping at gas stations can result in overdraft charges.
My Name is _____ and I Buy Stuff OnlineOut of PayPal, Credit Cards and Debit Cards which is the safest?“Internet Specials”Quick and EasyShipping & Handling
Hassan’s Suggestion Set up a separate online checking account Transfer only what you need when you need it If using PayPal only link to reserved checking account and not your main bank account The 3-5 business days it takes for the money to transfer into your account gives you more time. Is this a Need or a Want?
Be Careful Are you a victim of “lifestyle” inflation? The temptation to increase yourexpenses and purchases when you begin to earn more money (because of a new job, promotion, etc.)
To get something you’ve never hadbefore, you should try something you’ve never done before.
Times New Roman Isn’t Good Enough Anymore Re-think the way you are marketing yourself Revisit the resume SlideShare.net LinkedIn.com Wordpress.com/Blogspot.com Facebook.com Twitter.com
Taking Back the Power☻Money Isnt the Key to Happiness, But How You Spend It Is - (Researchers) have found that our types of purchases, their size and frequency, and even the timing of the spending all affect long-term happiness. One major finding is that spending money for an experience — concert tickets, French lessons, sushi-rolling classes, a hotel room in Monaco — produces longer-lasting satisfaction than spending money on plain old stuff.
The biggest threat toobtaining your goals is Yourself.