Why are we always unable to restrain consumption? Why can't I save any money?

" Money Psychology " Dan Ariely, Jeff Chrysler, Dan Ariely is also the author of the book " Who Says People Are Rational ". These two books are actually very similar, and the content in them overlaps. Compared with another book, the content of "The Psychology of Money " is relatively easy to understand. It is almost introduced with stories, making it easy for people to understand why people spend money like this.

This book is divided into three parts in total. The first is to discuss the definition of money, the second is how people view money and how to evaluate it, and the last is to give suggestions to make people re-examine the definition of money.

1. What exactly is money?

First of all, let's listen to a story. George is an ordinary office worker with a lot of work pressure. There is a child who is waiting to be fed at home. The financial situation is very tight. He usually saves food and money. He has to calculate every meal. When he arrived in Las Vegas and entered the gorgeous casino, the noisy environment made him forget about the pressure of work. He took out 6,000 yuan from the ATM, a handling fee of 6 yuan, anyway, he could win it back later, he sat In front of the gambling table, the chips in his hand were output one by one, and the chips didn't feel like money at all, so he lost 6,000 yuan in one hour.

Why do daily consumption and entertainment consumption feel so different to people?

We can save 50 bucks on coffee every morning, but spend money on travel with no mercy.

When we pay cash, we always think twice, but the consumption of swiping cards is often several times higher than that of cash. In fact, credit cards and casino chips have similar functions, and I will talk to you later.

The example of casinos seems to only happen in casinos. At that time, in this society, we also unknowingly walked into the money trap of businessmen.

In ancient times, people used to barter when shopping. With the invention of currency, people can exchange items more effectively. Money is small, portable and divisible, and has the largest functional storage. Some items are not stored. of this feature, such as food.

The invention of money allows people to concentrate on everyone's profession, and then let everyone use their profession to exchange what they need.

But how much is each item worth?

Why is an IPone really worth 40,000 yuan?

How much does a Picasso painting cost? Some people are willing to spend two to three million yuan to buy a painting, while others think it is too wasteful to spend one hundred yuan on a painting.

How much price we are willing to pay for something, when we buy something at a certain price, we must give up other things, this is the opportunity cost.

Faced with more and more exquisite products on the market, it becomes more difficult for consumers to choose whether a cup of coffee worth 100 yuan or a cup of coffee worth 30 yuan is better. We try to judge the value of the purchase, but commercial Marketing tactics prevent us from seeing every penny spent.

In the second part, we evaluate value, which has nothing to do with value at all.

Relativity is disorienting.

It makes us eat more, we think we can know how hungry we are and decide how much to eat, but in fact we choose based on the number of food, for example, when there are 8, 10, 12 ounces on the menu Steak, we usually go for the 10 oz steak, but if there's a 10, 12, 14 oz steak on the menu, we might go back to the middle 12 oz steak and then we'll eat more than we need.

Professor Wansink conducted a study in Chicago Films. He gave every audience who entered the movie theater a bucket of popcorn for free. These popcorns were actually stored for 5 days, and they tasted like cotton, which was soft and unpalatable. , and then test how much popcorn these viewers ate.

Half of the audience took a large bucket of popcorn, and the other half took a medium-sized popcorn. However, the average audience who took a large bucket of popcorn would eat 53% more. More than half of the popcorn was eaten.

Wansink has another well-known experiment. He asked the subjects to sit down and drink tomato soup. The experimenters did not know that the soup bowl was specially designed. No matter how they drank it, the soup would slowly add to their bowls. , the subjects didn't even notice that they had downed a huge pile of soup, they kept drinking and drinking until the experimenter kindly told them to stop.

Large plates and large packages of food will make people feel like eating more.

Relativity is a special algorithm of the human brain, which affects our understanding of the value of food and any specific thing, and also affects our thinking about spending money.

In a high-end resort, a cup of Coke costs more than 100 yuan, and we may happily pay, although it only costs 25 yuan in a convenience store. .

There are 10 yuan candy in front of the checkout counter. Compared with the two or three hundred yuan we bought, it’s only 10 yuan. Let’s buy it.

The easier the relativity is to compare, the easier it is to choose?

Suppose you are asked today "what do you want to eat tonight?", you may stop and think about what you want to eat, because there are too many choices, Western, Chinese, Thai, all kinds of meals are in your head Zhong Lun said it again.

But today if I change the question "Do you prefer chicken steak or pizza at night?", this question is much simpler, because it is easier to choose one of the two than to choose from a bunch of food.

Basically, it is difficult for us to evaluate the value of a thing, so when we buy something, it is easiest for us to directly compare it with the amount. As for the value, performance, battery life, etc., we cannot compare these performances one by one.

Therefore, in order to allow consumers to compare directly, merchants directly launch discounted products, which will force the brain to let go of its vigilance. It should be cheaper if there is a discount. When there are three prices for similar products, we tend to choose the middle product, because we believe that the middle price is the best choice, neither luxurious nor cheap.

Especially when all values are mixed together, it is more difficult for us to choose.

We cannot analyze the value given by telecom, we need to accurately compare their service quality, data transmission, 4G network, overage charges, minutes, roaming, base station coverage, game capacity, global communication services, fees, brand reputation, etc. The details make it difficult for consumers to assess how much money is worth in order to have relative value.

In real life, it is also difficult for us to calculate the opportunity cost of one dollar, whether we can buy one more dress or watch one more movie. If money can be classified into categories, the scope of brain comparison can be reduced.

The book suggests that the simpler the division of money accounts, the better. Some people may divide them into five equal parts, education, living expenses, deposits, entertainment, and car fares. We think that the more detailed the accounts are, the more we can restrain our behavior, but the result is just the opposite. If you have to think about which account the money belongs to every time you make a transaction, whether the book I bought is an entertainment account or an education account, whether the cup of coffee I drank today is a living expense or an entertainment account, this is like a dieter who cares about every calorie. , Eventually lead them to get angry, frustrated, and simply give up overeating, so complex budget classification, often in the end is to give up.

Therefore, it is suggested in the book that you only allocate the money you can "spend freely", deduct the basic monthly expenses or savings, and give yourself an extra amount, maybe 500 yuan a week, and you can have 2,000 yuan a month. You can spend whatever you want. If you want to drink, buy clothes, and take an Uber, you can use this money to pay for it. The simpler things are, the longer you can last.

Spending money hurts, we all know that.

Unlike physical pain, the feeling of spending money is not like being stung by a bee or a chronic disease. The pain of spending money is the feeling of unhappiness when we think about money being spent, which will make the whole shopping feeling, become Not so happy.

In recent years, researchers have also studied the human brain. The act of paying does stimulate the areas of the brain that deal with physical pain. It is not only high-priced products that cause pain, but any price will make consumers feel pain.

Human beings are animals that seek advantages and avoid disadvantages. In order to reduce the pain of spending money, credit cards, electronic wallets, and automatic bank debits have been invented to avoid the pain of taking money out.

Researchers have studied how different payment methods affect consumers' payment.

He divided the experimental group into two groups. The first group asked them to watch the video first and then pay, which is a bit like swiping a card before paying the money, and the second group asked them to pay when they clicked the video.

The prepaid group is the people who watch and then pay, with an average cost of 18 US dollars, and the other group of people who pay now, with an average cost of 12 cents.

The former is a full 50% more than the latter. When the payment becomes more obvious, we will change the consumption pattern. Simply put, if you often use credit cards to spend, the amount you spend will definitely be higher than paying in cash. Come more, and if you want to spend less, pay more in cash.

What are sunk costs?

Sunk cost means that after we invest in a certain thing, even if you know that your choice is wrong, it is still difficult to give up the investment, so that the deeper the hole we dig, we know that the stock has been locked up, but we are reluctant to sell it. Lost, or even added more, looking forward to earning it back one day.

To demonstrate the idea of sunk costs to students, Dan devised a contest in which he asked contestants to bid on a $100 bill, starting at $5, and each contestant could only increase by $5.

The first place winning bidder must pay the final money.

The second unsuccessful bidder also had to pay his bid.

As the bidding begins, the bids increase until the first place bids $55 and the second place bids $50, the combined price of the two far exceeds the item being bid on, which is $100, but the bidding process continues, Someone called $85, when $90 was called, Dan first called a pause, and reminded the contestants that the bidding item was only $100 bills, and now calling $90 means they can only earn $10, can you please Whether to continue bidding, the other party's answer is, "yes."

So the bidding continued, and when the bidding price exceeded $100, we thought that the bidding should stop, but the bidders were unwilling to stop, because the second bidder thought that he would have to pay $95, but he had nothing. At that time, he will continue to shout endlessly, because he does not want to pay the sunk cost of 95 US dollars. Dan said that he once used 100 euros to earn 590 euros. The sunk cost makes it impossible to stop losses rationally.

So he said, there are two best ways: the first one is not to participate in the competition from beginning to end, that is, not to buy stocks, not to bid and so on. Second, if you really participate, you must set up a stop loss point.

Language has magical power

Stories can distort people's values. People experience beauty through words and language. If we value this experience or thing more highly, people are willing to pay more. Even if things have not changed, food and taste are actually different. Nothing has changed, only the perception of consumers has changed.

Therefore, adding reduced-fat beef, cotton shirts, and natural vegetable juices to the menu will affect people's feelings. This seems to be good for the body, so it is normal to be more expensive.

Hope is more exciting than getting.

Expectation makes our purchase a wonderful experience. When something is not available, we will be full of anticipation and endorphins will be secreted in the brain. The opposite of expectation is worry, which is another negative expectation. Worse, even when things don't happen, we're just tense, stressed, and unbearable.

So anticipation is often more pleasant and frightening than obtaining it. Think about the person you had a crush on in high school, whether you are looking forward to it or afraid of being hurt.

According to stereotypes, women are usually weaker than men in mathematics. If the experimenter keeps emphasizing that she is a woman, these women's performance in mathematics and science will be worse than usual. , the student's self-expectation will also be lowered, which will affect his test scores.

Expectations do have an impact. If you want to make yourself better, you have to hypnotize yourself, make a dream version, expect yourself to be better, and let your actions and tone move towards your expectations.

Third, re-examine the definition of money.

The third chapter is the focus of this book. The author is very funny. He said that if you go directly to the third chapter of the book to find the answer in the bookstore, he wants to tell you that you are not helpful to his writing efforts, because you After reading it, I will definitely not buy his book again.

This chapter is to talk about the traps we face with money, how to avoid these traps, I will simply list six items, and readers please help the author a lot, haha.

1. Don't go crazy and buy something when you see the word "special price", regardless of the quality or suitability.

2. Divide the income into accounts to limit the amount you can spend on entertainment and leisure each month.

3. Try to use cash for consumption.

4. Shop around without losing money, do your homework before buying things, avoid the embarrassment of unequal knowledge and being manipulated by merchants.

5. Excessive comparison of money, while ignoring the value of goods or service experience.

6. There is no free lunch in the world, and the lethality of free is more serious than the price. He will make people lose their judgment on the quality of things, and even underestimate the opportunity cost. For example, a free lunch takes hours to queue up, ignoring the time cost .

This book actually cites the book "Who Says People Are Rational" many times. Since I have read that book, I read this book faster. I have shared how I save money on my official website before. Yes, I will briefly describe it here. If you want to know the details, please click the link below.

( Why can't I save money? MAGGIE shares six money saving techniques. )

1. I will separate the accounts. As mentioned in this book, I will directly deduct the cost of my savings insurance after my salary, and I will use the remaining money as living expenses.

2. Before shopping, I will look at a few more stores, and wait for two or three days longer, thinking about whether I am impulse shopping or really need this thing.

3. Don’t ask for famous brands, and don’t use too good things for your children. It is easy to go from frugal to extravagant, but difficult to go from extravagant to frugal.

4. Record all expenses. The records here are not for you to record for the whole year. You can record for a month first, and you will probably know your average monthly living expenses, and then think about whether those expenses are really necessary. Is it really necessary to subscribe to a magazine? Do mobile phone charges really need to be so high?

5. If you don't know what to save money for, save for retirement first.

6. Spend time learning about financial management and read more books on financial management.

Well, the above are some of Maggie’s thoughts on this book. If you like my sharing, please leave a message below.

Book information:

Title: The Psychology of Money

By: Dan Ariely, Jeff Chrysler

Publisher: Tianxia Culture

Book e-book link: http://moo.im/a/htBOUX

Further reading:

It is better to study smart than to study hard. There are skills in examinations.

The 30-year "advertising master" tells you, stop using logic for sales.

As long as you are willing to persist for many years, the achievement of compound interest rolling out will be extraordinary.

"Writing Lesson: Just Write One Bird After One Bird" After Reading

Link to Maggie's mother to talk about insurance and life