WEBVTT - Every dollar is worth the same

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<v Speaker 1>Welcome to Before Breakfast, a production of I Heart Radio.

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<v Speaker 1>Good Morning, This is Laura. Welcome to the Before Breakfast podcast.

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<v Speaker 1>Today's tip is to remember that every dollar, or whatever

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<v Speaker 1>unit of currency your country uses, is worth the same.

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<v Speaker 1>Sometimes it's easy to ignore small amounts in large transactions,

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<v Speaker 1>but use strategically small amounts of money can make a

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<v Speaker 1>big difference. If you ever study how humans behave around money,

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<v Speaker 1>you will learn that we are not entirely rational. We

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<v Speaker 1>tend to view things in terms of proportion rather than

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<v Speaker 1>absolute numbers. So, for instance, if you are buying a

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<v Speaker 1>computer and the first store you visit has it for

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<v Speaker 1>nine dollars, and you learn that a nearby second store

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<v Speaker 1>has it for nine hundred seventy five dollars, you're highly

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<v Speaker 1>likely to view that as no big deal and just

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<v Speaker 1>purchase it where you are. But if you were shopping

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<v Speaker 1>for pencils and visited a store that charged twenty seven

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<v Speaker 1>dollars for a set of pencils that were three dollars

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<v Speaker 1>somewhere else, you would probably be furious. You'd talk about

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<v Speaker 1>highway robbery, and you'd be running over to the cheaper

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<v Speaker 1>store as fast as you could. And this is true

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<v Speaker 1>even though that two difference is worth exactly the same

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<v Speaker 1>no matter what you're buying. We often shunt money into

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<v Speaker 1>categories in our brains, but every dollar is worth the

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<v Speaker 1>same no matter where it is. That's important because moving

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<v Speaker 1>money into certain categories can make a huge difference in

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<v Speaker 1>life satisfaction. An extra fifty dollars a month as part

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<v Speaker 1>of your rent or mortgage payment may not seem like

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<v Speaker 1>a whole lot, but adding that extra fifty dollars to

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<v Speaker 1>your fun budget each month means that you could go

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<v Speaker 1>get a pedicure two more times, or go out to

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<v Speaker 1>eat two more times, or hire a sitter for another

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<v Speaker 1>three hours or so. All of these repeated bits of

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<v Speaker 1>entertainment might boost life satisfaction a lot more over time

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<v Speaker 1>than whatever you're getting for the extra fifty dollars spent

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<v Speaker 1>on your housing. One reason mortgage fees are what they

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<v Speaker 1>are is that banks assume people are spending so much

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<v Speaker 1>money on their home purchase that they won't fight about

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<v Speaker 1>a little bit of extra money in the process. But

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<v Speaker 1>a five dollar fee that gets tacked on at the

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<v Speaker 1>end of a negotiation could have paid for a long

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<v Speaker 1>weekend trip that is a real source of pleasure. Paying

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<v Speaker 1>a bank more than you need to, not so much,

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<v Speaker 1>it might be worth fighting back. In general, I find

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<v Speaker 1>it's better not to automatically adopt the normal proportions of

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<v Speaker 1>income for spending in various categories. By making slightly unorthodox

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<v Speaker 1>choices in terms of proportions, you could do things that

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<v Speaker 1>might seem indulgent. For instance, spending your income on housing

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<v Speaker 1>instead of would allow for a lot of childcare or

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<v Speaker 1>travel or dinners out or entertainment. In my book All

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<v Speaker 1>the Money in the World, I look at weddings spending

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<v Speaker 1>in particular. Something like floral arrangements are fun, and they

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<v Speaker 1>are indeed pretty, but spending thousands of dollars on flowers

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<v Speaker 1>for one day might do less for marital happiness then

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<v Speaker 1>spending that same quantity of money on date nights or

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<v Speaker 1>outsourcing during the busy years of young kids. Spending a

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<v Speaker 1>lot on wedding flowers is considered normal, but not doing

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<v Speaker 1>it opens up a lot of future possibilities. In any case,

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<v Speaker 1>as you think about how you spend your money, it

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<v Speaker 1>might help to consider if moving some cash out of

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<v Speaker 1>the big categories could open up a lot of flexibility

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<v Speaker 1>in the smaller ones. Every dollar is worth the same

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<v Speaker 1>just because some dget proportions are normal doesn't mean they're

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<v Speaker 1>right for you. Ask what else that money can buy

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<v Speaker 1>and see if doing that might make you happier. In

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<v Speaker 1>the meantime, this is Laura. Thanks for listening, and here's

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<v Speaker 1>to making the most of our time. Hey, everybody, I'd

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<v Speaker 1>love to hear from you. You can send me your tips,

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<v Speaker 1>your questions, or anything else. Just connect with me on Twitter,

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<v Speaker 1>Facebook and Instagram at Before Breakfast pod that's B the

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<v Speaker 1>number four, then breakfast p o D. You can also

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<v Speaker 1>shoot me an email at Before Breakfast podcast at i

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<v Speaker 1>heeart media dot com that Before Breakfast is spelled out

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<v Speaker 1>with all the letters. Thanks so much, I look forward

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<v Speaker 1>to staying in touch. Before Breakfast is a production of

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