People are less likely to blow a rebate.
If President Bush wants us to spend that tax rebate, he needs to call it a tax "bonus." Or so wrote behavioral scientist Nicholas Epley in a New York Times guest column.
"A rebate, psychologically speaking, is the return of a loss of one's own money ... so it is unlikely to be seen as extra spending money," wrote Epley, a professor at the University of Chicago Graduate School of Business.
In one experiment at Harvard, he and some colleagues gave out $50 checks. Half the study participants were told it was a "rebate," while the other half got a "bonus." A week later, the bonus recipients had outspent the rebate crowd by more than 50 percent.
Can simple word choices really make that much difference? Sure they can. The word "budget" makes some people's jaws clench. Somehow the phrase "spending plan" sounds a lot better.
Freebies abound if you have time and know where to look.
Something for nothing? Sign me up!
Sign up a whole bunch of us, apparently. Readers of the Smart Spending message board recently revealed the best ways to troll the Internet for freebies. Seems their mailboxes spill like busted piñatas with toys, gift cards, sample toiletries, OTC meds, T-shirts, magazines – and even cold, hard cash.
- Bing: Find free stuff
And then there are those freebie endorphins.
"I just like the idea of getting stuff for free," said Karen, a Pacific Northwest reader, who got "a nice Adidas tote bag" from My Coke Rewards.
Some of these frugal tactics are just plain gross.
Re-used any dental floss lately?
All together now: Eeeewwww!
Yet a reader of the Smart Spending message board knows a guy who did this. "There’s nothing grosser than dental floss hanging over the towel rack," said the reader, who posts as "Willowtears."
Sure there is. How about the folks who flush their toilet only once a day? Or the guy who would re-use wash water "until it was black"? Or the woman whose mom strained and re-used cooking oil regardless of pedigree: "Doughnut-flavored taquitos, yum."
- Bing: How to conserve water
All this came from the "Most Extreme Savings Tactics" thread on the message board. I’m pretty extreme myself, but I flush my toilet each and every time, thanks.
Nation's addiction to credit is unsettling to say the least.
Just before Christmas, the Associated Press reported that Americans are losing the battle with credit-card debt. We're falling behind on payments, and defaults and delinquencies are increasing rapidly.
The subprime mortgage mess is partly to blame, economists say. But they also cite "America's long-standing attitude that debt -- even high-interest credit card debt -- is not a big deal."
Howard Dvorkin, the founder of a Florida credit counseling service, put it this way: "The desire of consumers to want, want, want, spend, spend, spend -- it's the fabric of our nation."
Dvorkin's words irritated the heck out of me. Unfortunately, they happen to be true.
Making every penny count is actually kind of fun.
When I wrote "Surviving and thriving on $12,000 a year," some people thought it was a scam. They wrote notes to the editor along the lines of, "Come on, nobody could really live on that." The fact is, plenty of people in this country live on less.
These days, some readers ask whether this part-time writing job changed things. As I noted in the follow-up to the original article, my life changed but my lifestyle didn't. The additional income has let me visit family, invest in decent shoes, and buy the occasional rotisserie chicken.
I still hate to pay retail, though.
Yesterday's errands are a good example. I'm listing a typical day of frugal hacks to show that yes, I do still live this way and that no, it's not onerous. Actually, it's kind of fun.
Do you really need all that junk?
A little cleaning can save dollars along with your sanity. That's what Smart Spending message board reader "Lynn D" says, anyway.
In a thread called "Making home a haven," the grad student notes that her formerly crowded condo made her feel "stressed and boxed in," which led to her wanting to go out, which led to her spending money.
At first, she tried to combat the tendency by spending more money -- on storage bins, hooks, an entertainment center and other things allegedly designed to help. Finally, Lynn D figured out the real problem: "I needed to get rid of (junk)!"
Now she finds herself staying at home more, whether it's to do her nails or watch a movie on a couch no longer littered with papers and books. Lynn D admits to another savings, too: She no longer has to buy things she already owns but couldn't find in all the clutter.
Readers can learn from my mistake.
A nasty upper respiratory virus recently laid me low. During this time I discovered, to my chagrin, how easy it is to overspend with a debit card when you're not feeling good.
I'm about to blame illness for yet another personal-finance gaffe: the Big Bill-Pay Snafu.
It turned out to be correctable, but it was a boneheaded error. Here's hoping you will learn from my mistake.
Pay early, pay often
A small credit card bill arrived over the weekend and I went online to pay it. I'd paid my other bills on Jan. 30. After typing in the amount, I happened to glance to the "last payment made" column on the right. It showed that this bill had already been paid, on Jan. 30.
In fact, it had been overpaid -- by about $750.
Using cards keeps his finances (and pockets) organized.
"Broke Grad Student" would like to have a big honking wad of cash as much as the next guy. But that's a dream because of his big honking student loan debt. In a post called "6 reasons why I hate cash," he explains why he otherwise has little use for bills and coins.
He's right. Cash is easily misplaced. It probably took us 20 years to train ourself to check our pockets for money before putting our clothes in the wash. Among his other reasons:
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