Speaker 1: Welcome to Before Breakfast, a production of I Heart Radio.
Speaker 1: Good Morning, This is Laura. Welcome to the Before Breakfast podcast.
Speaker 1: Today's tip is to remember that every dollar, or whatever
Speaker 1: unit of currency your country uses, is worth the same.
Speaker 1: Sometimes it's easy to ignore small amounts in large transactions,
Speaker 1: but use strategically small amounts of money can make a
Speaker 1: big difference. If you ever study how humans behave around money,
Speaker 1: you will learn that we are not entirely rational. We
Speaker 1: tend to view things in terms of proportion rather than
Speaker 1: absolute numbers. So, for instance, if you are buying a
Speaker 1: computer and the first store you visit has it for
Speaker 1: nine dollars, and you learn that a nearby second store
Speaker 1: has it for nine hundred seventy five dollars, you're highly
Speaker 1: likely to view that as no big deal and just
Speaker 1: purchase it where you are. But if you were shopping
Speaker 1: for pencils and visited a store that charged twenty seven
Speaker 1: dollars for a set of pencils that were three dollars
Speaker 1: somewhere else, you would probably be furious. You'd talk about
Speaker 1: highway robbery, and you'd be running over to the cheaper
Speaker 1: store as fast as you could. And this is true
Speaker 1: even though that two difference is worth exactly the same
Speaker 1: no matter what you're buying. We often shunt money into
Speaker 1: categories in our brains, but every dollar is worth the
Speaker 1: same no matter where it is. That's important because moving
Speaker 1: money into certain categories can make a huge difference in
Speaker 1: life satisfaction. An extra fifty dollars a month as part
Speaker 1: of your rent or mortgage payment may not seem like
Speaker 1: a whole lot, but adding that extra fifty dollars to
Speaker 1: your fun budget each month means that you could go
Speaker 1: get a pedicure two more times, or go out to
Speaker 1: eat two more times, or hire a sitter for another
Speaker 1: three hours or so. All of these repeated bits of
Speaker 1: entertainment might boost life satisfaction a lot more over time
Speaker 1: than whatever you're getting for the extra fifty dollars spent
Speaker 1: on your housing. One reason mortgage fees are what they
Speaker 1: are is that banks assume people are spending so much
Speaker 1: money on their home purchase that they won't fight about
Speaker 1: a little bit of extra money in the process. But
Speaker 1: a five dollar fee that gets tacked on at the
Speaker 1: end of a negotiation could have paid for a long
Speaker 1: weekend trip that is a real source of pleasure. Paying
Speaker 1: a bank more than you need to, not so much,
Speaker 1: it might be worth fighting back. In general, I find
Speaker 1: it's better not to automatically adopt the normal proportions of
Speaker 1: income for spending in various categories. By making slightly unorthodox
Speaker 1: choices in terms of proportions, you could do things that
Speaker 1: might seem indulgent. For instance, spending your income on housing
Speaker 1: instead of would allow for a lot of childcare or
Speaker 1: travel or dinners out or entertainment. In my book All
Speaker 1: the Money in the World, I look at weddings spending
Speaker 1: in particular. Something like floral arrangements are fun, and they
Speaker 1: are indeed pretty, but spending thousands of dollars on flowers
Speaker 1: for one day might do less for marital happiness then
Speaker 1: spending that same quantity of money on date nights or
Speaker 1: outsourcing during the busy years of young kids. Spending a
Speaker 1: lot on wedding flowers is considered normal, but not doing
Speaker 1: it opens up a lot of future possibilities. In any case,
Speaker 1: as you think about how you spend your money, it
Speaker 1: might help to consider if moving some cash out of
Speaker 1: the big categories could open up a lot of flexibility
Speaker 1: in the smaller ones. Every dollar is worth the same
Speaker 1: just because some dget proportions are normal doesn't mean they're
Speaker 1: right for you. Ask what else that money can buy
Speaker 1: and see if doing that might make you happier. In
Speaker 1: the meantime, this is Laura. Thanks for listening, and here's
Speaker 1: to making the most of our time. Hey, everybody, I'd
Speaker 1: love to hear from you. You can send me your tips,
Speaker 1: your questions, or anything else. Just connect with me on Twitter,
Speaker 1: Facebook and Instagram at Before Breakfast pod that's B the
Speaker 1: number four, then breakfast p o D. You can also
Speaker 1: shoot me an email at Before Breakfast podcast at i
Speaker 1: heeart media dot com that Before Breakfast is spelled out
Speaker 1: with all the letters. Thanks so much, I look forward
Speaker 1: to staying in touch. Before Breakfast is a production of
Speaker 1: I heart Radio. For more podcasts from I heart Radio,
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