Comments on: Ahh so THAT’S what it’s called… “Mental Accounting!”

By: J. Money

J. Money — Mon, 31 Jan 2011 02:06:36 +0000

yep! pros and cons to both sides really :)

By: Catherine

Catherine — Wed, 26 Jan 2011 16:52:15 +0000

I never really thought of this as “a thing” but you’re right – we all do that. Or 99% of us do. We’d rather keep some money in the bank than clear our debt. An urge and type of behaviour I’m trying to push against within myself right now. Sure there’s no money in the bank, but the credit card balance is a lot smaller!

By: J. Money

J. Money — Fri, 26 Nov 2010 18:30:50 +0000

good for you, girl! a strong work ethic is no joke, appreciate you sharing with us :)

By: Sarah

Sarah — Mon, 22 Nov 2010 09:07:13 +0000

What’s something you’re currently doing that might not make the most sense? (But you keep doing anyways because it keeps you sane?)

Mine’s a little different.

I am a full time student, and I come from a well to-do family. I don’t need to pay for tuition, books, rent, living expenses, but I work 3 jobs and take a full load of classes. Why don’t I just not work (or at least just quit 2 of my jobs)?

Because I can’t stand the thought that people think I am born with a silver spoon in my mouth. I don’t want people to think I got anywhere in life just because of my parents. I work dang hard at school and at work because I’ve seen my parents’ work ethic, not because they pay for my grades.

I would way rather have everyone think I’m a poor starving college student than some rich beezy who has never worked a day in her life.

By: J. Money

J. Money — Fri, 19 Nov 2010 06:08:25 +0000

@Yana – Lucky for me I only pay 6% or something w/ USAA ;) Should I be saving it? Of course. Will it make me happier though? Nope. So at that point it doens’t matter.
@Jenna – Sometimes it’s good not to do auto-pay though, like with utility bills (cell phones esp!) and other variable things (credit cards). This way you’re always in controll and will consciously think about it before you go and pay off.
@Josh – It’s true, I wouldn’t pay to have the options, but I’m not in that situation right now. My only two options are “Pay the bill off” or “don’t pay it off” (well, also “pay some off” but you get the point). If it were at 14% for me it would have already been gone. But 6% isn’t enough to justify the lack of happiness.
@Kevin – Yup! Can’t go back to your mortgage company or utility company and ask for your money back. But you’re right with credit cards.
@WR – You are a busy bee!! That’s awesome though. Much better to have too much going on than too little at least for me. And you’re right – I will be using my blog money for something special: QUITTING my 9-5!!! Haha… no, I’m not joking.
@Cassandra Gardner – Yup! I always think my family would be happier if I bought something for myself with their money than pay a bill. Unless I was in loads of debt and would be idiotic of me not to.
@StackingCash – I’ve said it before, and I’ll say it again: I’d marry USAA if it were a chick and I were single! I bet she’s hot ;)
@Sarah – That probably would be a nice balance, eh?

By: Sarah

Sarah — Thu, 18 Nov 2010 21:16:18 +0000

Having money in the bank is about having an emergency fund that you can tap without having to get more debt in the event something were to happen. This way you can avoid the endless cycle of almost paying off your credit card, and then racking it back up for some unexpected expense.

I wouldn’t say put money into a savings account and not pay off your debt, but try to do a little of both.

By: StackingCash

StackingCash — Wed, 17 Nov 2010 07:45:16 +0000

At first I was thinking you should never give a penny to those evil credit card companies. Then I read your response saying it was a USAA credit card. LOL! As much as I envy your ability to use USAA, I think your love of the company is a bit to much.

My financial set up would make everyone but the retired cringe. No investments, just strictly cash. Just remember that there is someone crazier than you :) Even though I feel sane…hmmm…

By: Cassandra Gardner

Cassandra Gardner — Wed, 17 Nov 2010 03:40:01 +0000

I agree with the thought that there are certain windfalls that should be spent on non-essentials. I receive birthday and Christmas money from family and I feel that this money should be spent on fun things. I understand that if there are pressing bills that are important to be paid immediately, these funds should go to them first. However, I like to consider this guilt free money, meaning I can blow it on a massage or a new dress without guilting myself over the things that it could have been spent on.

By: WR

WR — Wed, 17 Nov 2010 03:29:33 +0000

“What’s something you’re currently doing that might not make the most sense? (But you keep doing anyways because it keeps you sane?)”

That’s a tough one. I do a lot of things that don’t make sense.

I have zero CC debt, zero consumer debt (other than a bunch of mortgages but technically those fall under assets of an LLC)

My biggest mistake is probably not delegating. I am currently installing a wood floor, writing a book, coaching soccer, raising a family and about 1,000 other little things that go along with a job, family, entrepreneurship and life in general. I have been spending lots of time streamlining (i.e selling some assets, aggregating accounts into a single investment house – Vanguard got my vote in case you were wondering ) but my simplification efforts, I feel, are not enough. I need to let go and hire some good help.

As a result, I have neglected the exercise and health stuff (My mental accounting tells me that installing the wood floor is somehow equivalent to jogging 5 miles). Not even close but I tend to let little pressures get in the way of what I know is best for me.

I have found that I need to have at least one or two real, physical projects going on. My job and my business life is built on pixels and ideas. It’s hard to define a solid finish-line. It’s nice to finish a tangible, lasting project. As an example, I recently built a fireplace mantle out of 150 year old barn wood. It was an absolute blast.

@J – btw, the ‘entrepreneurship’ money is better than ‘9-5’ money and should be treated as such. Profits are better than wages. All money is simply a measure of value and that money in particular represents Values that you hold dear. Do something special with your blog profits. (I donated $200 this A.M. from some of my business profits. A colleague of mine is running a great charity campaign: Build a well, win an ipad http://www.mycharitywater.org/p/campaign?campaign_id=9627 )

-WR

By: Kevin

Kevin — Wed, 17 Nov 2010 01:04:45 +0000

I never realized there was a name for it either. I know it makes more sense to pay off credit cards but I am more comfortable with the cash in hand as well. I think its good to have an emergency savings regardless because that paid off loan isn’t going to do much good when you’re in a tight spot (a credit card might though).