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Why paper maps still matter in the digital age

<p>Ted Florence is ready for his family trip to Botswana. He has looked up his hotel on Google Maps and downloaded a digital map of the country to his phone. He has also packed a large paper map. “I travel all over the world,” says Florence, the president of the international board of the <a href="https://imiamaps.org/">International Map Industry Association</a> and <a href="https://www.avenzamaps.com/">Avenza Maps</a>, a digital map software company. “Everywhere I go, my routine is the same: I get a paper map, and I keep it in my back pocket.”</p> <p>With the proliferation of smartphones, it’s easy to assume that the era of the paper map is over. That attitude, that digital is better than print, is what I call “technochauvinism.” In my book, <em><a href="https://mitpress.mit.edu/books/artificial-unintelligence">Artificial Unintelligence: How Computers Misunderstand the World</a></em>, I look at how technochauvinism has been used to create an unnecessary, occasionally harmful bias for digital over print or any other kind of interface. A glance at the research reveals that the paper map still thrives in the digital era, and there are distinct advantages to using print maps.</p> <p><strong>Your brain on maps</strong></p> <p>Cognitive researchers generally make a distinction between surface knowledge and deep knowledge. Experts have deep knowledge of a subject or a geography; amateurs have surface knowledge.</p> <p>Digital interfaces are good for acquiring surface knowledge. Answering the question, “How do I get from the airport to my hotel in a new-to-me city?” is a pragmatic problem that requires only shallow information to answer. If you’re traveling to a city for only 24 hours for a business meeting, there’s usually no need to learn much about a city’s layout.</p> <p>When you live in a place, or you want to travel meaningfully, deep knowledge of the geography will help you to navigate it and to understand its culture and history. Print maps help you acquire deep knowledge faster and more efficiently. In experiments, <a href="http://dx.doi.org/10.1016/j.chb.2016.10.014">people who read on paper consistently demonstrate better reading comprehension</a> than people who read the same material on a screen. <a href="https://doi.org/10.1177/0165551512470043">A 2013 study</a> showed that, as a person’s geographic skill increases, so does their preference for paper maps.</p> <p>For me, the difference between deep knowledge and surface knowledge is the difference between what I know about New York City, where I have lived for years, and San Francisco, which I have visited only a handful of times. In New York, I can tell you where all the neighborhoods are and which train lines to take and speculate about whether the prevalence of Manhattan schist in the geological substrate influenced the heights of the buildings that are in Greenwich Village versus Midtown. I’ve invested a lot of time in looking at both paper and digital maps of New York. In San Francisco, I’ve only ever used digital maps to navigate from point to point. I’ll be the first to admit that I don’t know where anything is in the Bay Area.</p> <p>Our brains encode knowledge as what scientists call <a href="https://doi.org/10.1016/j.chb.2016.10.014">a cognitive map</a>. In psychology-speak, I lack a cognitive map of San Francisco.</p> <p>“When the human brain gathers visual information about an object, it also gathers information about its surroundings, and associates the two,” wrote communication researchers Jinghui Hou, Justin Rashid and Kwan Min Lee <a href="http://dx.doi.org/10.1016/j.chb.2016.10.014">in a 2017 study</a>. “In a similar manner to how people construct a mental map of a physical environment (e.g., a desk in the center of an office facing the door), readers form a ‘cognitive map’ of the physical location of a text and its spatial relationship to the text as a whole.”</p> <p>Reading in print makes it easier for the brain to encode knowledge and to remember things. Sensory cues, like unfolding the complicated folds of a paper map, help create that cognitive map in the brain and help the brain to retain the knowledge.</p> <p>The same is true for a simple practice like tracing out a hiking route on a paper map with your finger. The physical act of moving your arm and feeling the paper under your finger <a href="https://www.nytimes.com/2019/01/06/smarter-living/memory-tricks-mnemonics.html">gives your brain haptic and sensorimotor cues</a> that contribute to the formation and retention of the cognitive map.</p> <p><strong>Map mistakes</strong></p> <p>Another factor in the paper versus digital debate is accuracy. Obviously, a good digital map is better than a bad paper map, just like a good paper map is better than a bad digital map.</p> <p><a href="https://medium.com/@mitpress/3-recommendations-to-combat-technochauvinism-9099b257b92c">Technochauvinists</a> may believe that all digital maps are good, but just as in the paper world, the accuracy of digital maps depends entirely on the level of detail and fact-checking invested by the company making the map.</p> <p>For example, a <a href="http://articles.latimes.com/2012/dec/20/business/la-fi-tn-apple-google-maps-lost-20121220">2012 survey by the crowdsourcing company Crowdflower</a> found that Google Maps accurately located 89 percent of businesses, while Apple Maps correctly found 74 percent. This isn’t surprising, as Google <a href="https://www.google.com/streetview/understand/">invests millions in sending people</a> around the world to map terrain for Google StreetView. Google Maps are good because the company invests time, money and human effort in making its maps good – not because digital maps are inherently better.</p> <p>Fanatical attention to detail is necessary to keep digital maps up to date, as conditions in the real world change constantly. Companies like Google are constantly updating their maps, and will have to do so regularly for as long as they continue to publish. The maintenance required for digital content is substantial – <a href="https://www.pprune.org/private-flying/601767-maps-obsolete.html">a cost that technochauvinists often ignore</a>.</p> <p>In my view, it’s easier to forgive the errors in a paper map. Physical maps usually include an easily visible publication date so users can see when the map was published. (When was the last time you noticed the date-of-last-update on your car navigation system?) When you are passively following the spoken GPS directions of a navigation system, and there is, say, an unmarked exit, it confuses the GPS system and causes chaos among the people in the car. (Especially the backseat drivers.)</p> <p><strong>The best map for the job</strong></p> <p>Some of the deeper flaws of digital maps are not readily apparent to the public. Digital systems, including cartographic ones, are more interconnected than most people realize. Mistakes, which are inevitable, can go viral and create more trouble than anyone anticipates.</p> <p>For example: Reporter Kashmir Hill has written about a Kansas farm in the geographic center of the U.S. that has been <a href="https://splinternews.com/how-an-internet-mapping-glitch-turned-a-random-kansas-f-1793856052">plagued by legal trouble and physical harassment</a>, because a digital cartography database mistakenly uses the farm’s location as a default every time the database can’t identify the real answer.</p> <p>“As a result, for the last 14 years, every time MaxMind’s database has been queried about the location of an IP address in the U.S. it can’t identify, it has spit out the default location of a spot two hours away from the geographic center of the country,” Hill wrote. “This happens a lot: 5,000 companies rely on MaxMind’s IP mapping information, and in all, there are now over 600 million IP addresses associated with that default coordinate.”</p> <p>A technochauvinist mindset assumes everything in the future will be digital. But what happens if a major company like Google stops offering its maps? What happens when a <a href="https://www.theverge.com/2018/1/19/16910378/government-shutdown-2018-nasa-spacex-iss-falcon-heavy">government shutdown</a> means that <a href="http://satnews.com/story.php?number=827160505">satellite data</a> powering smartphone GPS systems isn’t transmitted? Right now, ambulances and fire trucks can keep a road atlas in the front seat in case electronic navigation fails. If society doesn’t maintain physical maps, first responders won’t be able to get to addresses when there is a fire or someone is critically ill.</p> <p>Interrupting a country’s GPS signals is also a realistic cyberwarfare tactic. The U.S. Navy has resumed training new recruits in <a href="https://www.telegraph.co.uk/news/worldnews/northamerica/usa/11931403/US-navy-returns-to-celestial-navigation-amid-fears-of-computer-hack.html">celestial navigation</a>, a technique that dates back to ancient Greece, as a guard against when the digital grid gets hacked.</p> <p>Ultimately, I don’t think it should be a competition between physical and digital. In the future, people will continue to need both kinds of maps. Instead of arguing whether paper or digital is a better map interface, people should consider what map is the right tool for the task.</p> <div><a href="https://mitpress.mit.edu/books/artificial-unintelligence"></a><em>MIT Press provides funding as a member of The Conversation US.</em><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: http://theconversation.com/republishing-guidelines --></div> <p><span><a href="https://theconversation.com/profiles/meredith-broussard-659409"><em>Meredith Broussard</em></a><em>, Assistant Professor of Journalism, <a href="http://theconversation.com/institutions/new-york-university-1016">New York University</a></em></span></p> <p><em>This article is republished from <a href="http://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/why-paper-maps-still-matter-in-the-digital-age-105341">original article</a>.</em></p>

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8 ways to make more money in 2020

<p><span>The start of a new year is a great time to evaluate your money habits and identify places where you can boost your income or decrease your spending. While the process can feel overwhelming, especially if you’re drowning in bills, you’ve got this – and we’ve got your back. We rounded up a wide assortment of great tips for all aspects of your financial life so that you can turn your dream of saving money into a reality. Believe it or not, just a few simple tweaks can help you get (and keep) more money in your pocket in 2020.</span></p> <div class="tg-container categorySection detailSection"> <div id="primary" class="contentAreaLeft"> <div id="page3" class="slide-show"> <div id="test" class="slide listicle-slide"> <h2 class="slide-title">1. Buy gift cards at a discount, and sell ones you don’t want</h2> <div class="slide-description"> <p>Most of us have at least a few old, unwanted gift cards stashed away in a drawer. Leaving them unused is like throwing away money. Instead, turn them into cash by selling them online. Many of the sites that buy gift cards also sell those cards at a discounted price. This is a great way to save money on gift cards for yourself or others.</p> </div> </div> </div> </div> </div> <div class="tg-container categorySection detailSection"> <div id="primary" class="contentAreaLeft"> <div id="page4" class="slide-show"> <div id="test" class="slide listicle-slide"> <h2 class="slide-title">2. Shop through sites that offer cashback rewards</h2> <div class="slide-description"> <p>Meghan Fox, a savings expert, suggests users maximise their savings by buying discounted gift cards and then using those cards at a site that pays cash back. Check out sites such as Cashrewards and PricePal which offer cashback rewards for purchases at a variety of retailers and websites.</p> </div> </div> </div> <div id="page5" class="slide-show"> <div id="test" class="slide listicle-slide"> <h2 class="slide-title">3. Use social media for positive motivation</h2> <div class="slide-description"> <p>“Follow financially savvy young professionals instead of, say, travellers,” says Brian Walsh, a certified financial planner at SoFi. “They will inspire you to stick to your goals rather than keeping up with the Joneses.”</p> </div> </div> </div> <div id="page6" class="slide-show"> <div id="test" class="slide listicle-slide"> <h2 class="slide-title">4. Declutter and make money on Facebook Marketplace</h2> <div class="slide-description"> <p>Go through your closet, apartment, garage or storage unit, and sell things you no longer wear or need on Facebook Marketplace. “I have sold several thousand dollars worth of stuff to declutter our house!” says Deb Liu, Vice President of Marketplace and Commerce at Facebook. “I [also] get the kids involved. We’ve sold some of their games and toys. It’s a win-win: They think they’re earning money for even more toys, and I get to teach them about math and budgeting!”</p> </div> </div> </div> </div> </div> <div class="tg-container categorySection detailSection"> <div id="primary" class="contentAreaLeft"> <div id="page7" class="slide-show"> <div id="test" class="slide listicle-slide"> <h2 class="slide-title">5. Cash in on special-event items you won’t use again</h2> <div class="slide-description"> <p>Lindsey Nickel, a wedding planner at Lovely Day Events, suggests newlyweds help recoup some of their wedding expenses by selling items they used at their event. “These items are very wedding-specific and probably won’t be used again,” she says. “So instead of taking up storage, I tell them to sell them on sites like Facebook Marketplace and help out the next bride instead. Ask your professional photographer for the big day to take high-quality pics of the items.”</p> <div class="tg-container categorySection detailSection"> <div id="primary" class="contentAreaLeft"> <div id="page8" class="slide-show"> <div id="test" class="slide listicle-slide"> <h2 class="slide-title">6. Take advantage of price matching</h2> <div class="slide-description"> <p>This can help you avoid a lot of driving around or wasting time shopping at a bunch of different sites. But be sure to read the store policies carefully. Some will only price-match the items at brick-and-mortar stores (not websites) or stores within a certain geographic location.</p> </div> </div> </div> <div id="page9" class="slide-show"> <div id="test" class="slide listicle-slide"> <h2 class="slide-title">7. Become a preferred shopper</h2> <div class="slide-description"> <p>Sign up for retailers’ email promotions and follow them on social media. You will often get access to special coupons, sales and discount promotions. That said, it’s a good idea to create a special email address for these promotional emails to keep them from swamping your primary inbox.</p> </div> </div> </div> </div> </div> <div class="tg-container categorySection detailSection"> <div id="primary" class="contentAreaLeft"> <div id="page10" class="slide-show"> <div id="test" class="slide listicle-slide"> <h2 class="slide-title">8. Let your home pay for itself</h2> <div class="slide-description"> <p>All over the world, there are millions of unused bedrooms in homes that could potentially be rented out. “This is often especially true for empty nesters and retirees,” says Wendi Burkhardt, CEO of Silvernest. “Rather than letting them gather dust, profit from them by renting them out to a long-term housemate. Estimates show that you can earn an average of $10,000 a year per room. Even better is that you can split bills with your housemate, helping you slash monthly expenses while you’re earning passive income on the side.”</p> <p><em>Written by Bobbi Dempsey. This article first appeared in </em><span><a rel="noopener" href="https://www.readersdigest.com.au/food-home-garden/money/38-ways-to-make-more-money-in-2020" target="_blank"><em>Reader’s Digest</em></a><em>. For more of what you love from the world’s best-loved magazine, </em><a href="http://readersdigest.innovations.co.nz/c/readersdigestemailsubscribe?utm_source=over60&amp;utm_medium=articles&amp;utm_campaign=RDSUB&amp;keycode=WRN93V"><em>here’s our best subscription offer.</em></a></span></p> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> <p><img style="width: 100px !important; height: 100px !important;" src="https://oversixtydev.blob.core.windows.net/media/7820640/1.png" alt="" data-udi="umb://media/f30947086c8e47b89cb076eb5bb9b3e2" /></p>

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The psychology behind why people buy

<p>Between <a href="https://ideas.repec.org/a/eee/joreco/v21y2014i2p86-97.html">40% and 80%</a> of purchases are impulse buys. Marketers often get blamed for this, but while marketing tactics may be <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1744-6570.2010.01187_2.x">cynical, manipulative, and even deceptive</a>, shoppers are generally wise to their ways.</p> <p>Of greater concern, is the fact that up to <a href="https://academic.oup.com/joc/article-abstract/64/5/915/4086043?redirectedFrom=fulltext">95% of our daily decisions</a> are potentially determined by <a href="https://www.sciencedirect.com/science/article/abs/pii/S105774080570108X">impulsive, unconscious processes</a>. All too often, consumers are ignorant of the <a href="http://psycnet.apa.org/record/1992-98649-000">social influences</a> and <a href="https://www.researchgate.net/publication/288902202_Social_psychology_and_consumer_psychology_An_unexplored_interface">psychological states</a> that make them vulnerable shoppers. In fact, most people entertain a costly <a href="http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.552.7516&amp;rep=rep1&amp;type=pdf">illusion of invulnerability</a> and consider themselves especially shrewd shoppers.</p> <p>You can avoid spending too much by becoming more mindful of the factors that influence your shopping behaviours. Here are six factors which could cause you to overspend, along with some tips about how to counteract them.</p> <h2>1. Social pressure</h2> <p>Human beings are very susceptible to social pressures. The cooperative and competitive behaviours, which have ensured our survival as a species, also nudge us <a href="https://youtu.be/_qHYmx7qPes">to spend more than we need</a>.</p> <p>For example, the social norm of reciprocity obligates us to exchange gifts and good deeds at Christmas.</p> <p>Competition also fuels consumption: sales reinforce a sense of scarcity, and use time constraints to provoke a fear of missing out among shoppers – even when they’re buying online. Flash sales – such as Black Friday – create a herd mentality, which can provoke panic buying, hysteria <a href="http://blackfridaydeathcount.com/">or worse</a>. Being aware of these pressures will minimise their effects and allow you to maintain a sense of perspective.</p> <h2>2. More abstract money</h2> <p>The concept of money is a shared myth, powered by the human imagination. Our <a href="https://www.harpercollins.com/9780062316097/sapiens/">imagination has been instrumental</a> in the rapid development of the species, allowing people to swap pieces of paper and bits of metal for things they want. From notes and coins, to debit and credit cards, and most recently phones and <a href="https://www.fitbit.com/uk/fitbit-pay">Fitbits</a>, the human imagination accommodates increasingly abstract forms of money. This is dangerous.</p> <p>These new forms of money ease the “<a href="https://youtu.be/PCujWv7Mc8o">pain of paying</a>”, reducing the level of guilt we feel when parting with money. It temporarily hides the financial repercussions of our purchases (the lower bank balance or lighter wallet). This leads people to splurge without keeping track of the true financial costs of their decisions. Using cash when shopping will increase the pain of paying and make you more sensitive to how much you’re spending. This, in turn, will ensure that you only spend money on the items you really want.</p> <h2>3. Decision fatigue</h2> <p>Research <a href="https://www.guilford.com/books/Handbook-of-Self-Regulation/Vohs-Baumeister/9781462533824">suggests that</a> people have limited reserves of willpower. As we make decisions throughout the day, this reserve becomes exhausted, resulting in “resource depletion”. <a href="https://www.jstor.org/stable/10.1086/510228">Resource depletion</a> causes people to act impulsively. Doing shopping early in the day, and avoiding other sources of stress, such as big crowds, will minimise the risk of resource depletion.</p> <h2>4. Mindsets</h2> <p>Psychological states known as “<a href="https://www.sciencedirect.com/science/article/abs/pii/S1057740810000215">mindsets</a>”, which influence perceptions and decision making, can also make people more likely to spend. They occur outside of our conscious awareness, when the thought processes we use in one situation are carried over and used to process information in the next.</p> <p>Thinking positively in one situation can predispose a person to think positively in an unrelated situation – for example, generating supportive thoughts about giving to charity might prime a person to have positive thoughts about the bottle of detergent they see in an ad break a few minutes later. The makes them more likely to buy it.</p> <p>Mindsets also influence shopping goals. People with a “deliberative mindset” are open minded and likely to review all their options, while people with an “implemental mindset” are more close-minded and goal-focused. An implemental mindset reduces procrastination and focuses people to pursue their buying goals. These goals could be explicitly stated in a shopping list or even activated unconsciously.</p> <p>The implemental mindset can be dangerous, because it creates <a href="http://journals.ama.org/doi/10.1509/jmkr.44.3.370">shopping momentum</a>. This is when buying one thing makes you more likely to buy another since your goal-focused mindset remains active even after you bought what you intended. This is one of the reasons why people emerge from shopping centres burdened down with several bags, having gone in to buy one item.</p> <p>Unfortunately, <a href="https://www.sciencedirect.com/science/article/pii/S074959781000110X">switching between different mindsets</a> can deplete your mental resources and cause you to spend more. Making rules to guide your decisions before you go shopping can counteract the effects of these mindsets and reduce the risk of shopping momentum. For example, telling yourself that if a product is below a certain price, you will buy it, but if it costs more, you will not. Making a list and setting a budget will help you remember the old adage, “it is not a bargain unless you need it”.</p> <h2>5. Making comparisons</h2> <p>Shopping is essentially a three step process. First you ask yourself, “do I want to buy something?”; then, “which product is the best?”; and finally, “how will I buy the product?”. But when people consider two possible purchases, it induces a “<a href="https://academic.oup.com/jcr/article-abstract/34/4/556/1820298?redirectedFrom=fulltext">which-to-buy</a>” mindset, which primes them to skip the first question, and makes them more likely to buy something.</p> <h2>6. The halo effect</h2> <p>Using mental shortcuts help us navigate everyday life more efficiently. Yet these shortcuts <a href="https://www.penguin.com.au/books/thinking-fast-and-slow-9780141033570">can also lead to</a> incorrect assumptions and costly mistakes. In the context of shopping, not all assumptions are bad. Indeed, some assumptions are central to marketing. For example, branding works because we assume that products under the one brand have a similar level of quality.</p> <p>But other assumptions are less reliable. The “halo effect” occurs when we make incorrect assumptions, which lead us to think positively about something. So, the eye catching deals we see in the front window often make us assume that the other in-store deals are equally valid and generous.</p> <p>To counteract the halo effect, you need to come prepared. Knowing the recommended retail price (RRP) of products will ensure that you are not influenced by high anchor prices that give the impression of deep discounts. Remaining sceptical and calm will improve your decision making and reduce the risks of cognitive bias. This will likely be good for society, the environment and your pocket.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/108680/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><em><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: http://theconversation.com/republishing-guidelines --></em></p> <p><em><a href="https://theconversation.com/profiles/brian-harman-648072">Brian Harman</a>, Lecturer in Marketing, <a href="http://theconversation.com/institutions/de-montfort-university-1254">De Montfort University</a> and <a href="https://theconversation.com/profiles/janine-bosak-400922">Janine Bosak</a>, Associate Professor in Organisational Psychology, <a href="http://theconversation.com/institutions/dublin-city-university-1528">Dublin City University</a></em></p> <p><em>This article is republished from <a href="http://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/how-to-avoid-overspending-uncover-the-psychology-behind-why-people-buy-108680">original article</a>.</em></p>

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Why we think businesses are out to get us

<p>Justin Welby, the archbishop of Canterbury, made headlines in the U.K. for <a href="https://www.archbishopofcanterbury.org/speaking-and-writing/speeches/archbishop-canterburys-speech-tuc">his speech</a> at the Trades Union Congress conference in Manchester, England.</p> <p>His remarks were forcefully pro-union and strongly disapproving of corporations, the profit motive and the wealthy.</p> <p>He singled out Amazon for not paying their fair share of taxes in the U.K. and the gig economy as a “reincarnation of an ancient evil.”</p> <p>To the archbishop, capitalism, with its pursuit of profit and inequality of outcomes, is inherently immoral.</p> <p>Other religious leaders have, over the years, made similar points. In 2015, Pope Francis <a href="https://nationalpost.com/news/world/dung-of-the-devil-pope-francis-denounces-capitalism-greed-and-the-pursuit-of-money">denounced capitalism</a> and the pursuit of money and, in 2008, the then-archbishop of Canterbury, Rowan Williams, wrote an article for a British magazine <a href="https://blogs.spectator.co.uk/2012/03/from-the-archives-rowan-williams-on-capitalism-and-idolatry/">criticizing capitalism</a> in the wake of the financial crisis.</p> <p>Such negative views of business and profit are hardly uncommon.</p> <p>A recent article in the <em>Journal of Personality and Social Psychology</em> documented widespread <a href="http://psycnet.apa.org/fulltext/2017-31434-001.html">anti-profit beliefs</a>.</p> <p>In my research with some of my graduate students, I have found that people often take a dim view of businesses, interpreting many different actions —such as a <a href="http://acrwebsite.org/volumes/1010014/volumes/v39/NA-39">small price increase</a> or a <a href="http://tinyurl.com/ybptgtra">product recommendation</a> — as an attempt to take advantage of consumers.</p> <h2>Viewed as conscious entities</h2> <p>But what underlies these views? Why is business and the pursuit of profit so maligned?</p> <p>We think the answer lies, in part, in how people view firms and the resulting inferences they draw from the attempts of these firms to make a profit. To the first point, people seem to view companies as conscious entities — as living, breathing organisms with thoughts, feelings, intentions and motives.</p> <p><a href="https://opinionator.blogs.nytimes.com/2015/06/15/do-corporations-have-minds/">Research using functional magnetic resonance imaging (fMRI) scanners</a> has found that patterns of neural responses when considering other people’s mental states (<a href="https://www.psychologytoday.com/ca/blog/socioemotional-success/201707/theory-mind-understanding-others-in-social-world">the parts of the brain involved in “theory of mind”</a>) are indistinguishable from the pattern of responses when considering the behaviour of organizations.</p> <p>What this means is that people are likely to attribute distinctly human motives to business actions that are the product of entirely different processes.</p> <p>In addition to viewing companies as people, consumers often view their transactions with firms as zero-sum — like sharing a pie, where more for one person means less for the other. This means that when companies are perceived to be making a profit, that profit is viewed as coming at the expense of customers.</p> <h2>Distrust of profitable firms</h2> <p>This is where profiting becomes problematic. Because we mentally view firms as people, this is seen as a wilful act — a deliberate attempt to take advantage of customers — and it violates an important norm of interpersonal conduct, a moral norm even, that forbids benefiting at another’s expense.</p> <p>We have found that a wide range of actions by businesses appears to be interpreted in this light: price increases, <a href="https://www.sciencedirect.com/science/article/pii/S002243591100090X">discounts for other people</a>, product recommendations and even advertisements.</p> <p>Even when people don’t buy goods or services from a company, and therefore no profit is made, perceptions that a firm tried to profit lead to negative responses.</p> <h2>Even sales clerks are suspect</h2> <p>In one extreme example, we found that even when a salesperson recommended the cheaper of two alternatives, customers still assumed it was to benefit at their expense.</p> <p>Our research has not yet investigated how firms can mitigate such reactions or whether they even can. If our results are anything to go by, some readers may think that these are legitimate reactions that should not be curtailed.</p> <p>However, we would point out that a purchase is a consumer decision. No company is forcing consumers to buy their products against their will.</p> <p>What’s more, businesses bear the burden of the risk in offering products for consumers’ consideration; the products that they make available to us are often a tremendous source of value in our lives; and, ultimately, the only reason companies develop and offer such products is to make a profit. Otherwise, what would be the point of going into business?<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/103977/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: http://theconversation.com/republishing-guidelines --></p> <p><em>Written by <span>Laurence Ashworth, Associate Professor, Marketing, Queen's University, Ontario</span>. Republished with permission of </em><a rel="noopener" href="https://theconversation.com/why-we-think-businesses-are-out-to-get-us-103977" target="_blank"><em>The Conversation</em></a><em>. </em></p>

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Should we stop buying new clothes?

<p>The fashion industry is one of the most <a href="https://www.unenvironment.org/news-and-stories/story/putting-brakes-fast-fashion">polluting industries</a> in the world, producing 20% of global wastewater and 10% of global carbon emissions – and it’s estimated that by 2050 this will have increased to <a href="https://www.downtoearth.org.in/news/environment/fashion-industry-may-use-quarter-of-world-s-carbon-budget-by-2050-61183">25%</a>. A staggering <a href="https://www.governmenteuropa.eu/fast-fashion-waste/92213/">300,000</a> tonnes of clothes are sent to British landfills each year.</p> <p>The <a href="https://www.greenmatters.com/p/what-is-fast-fashion">fast fashion</a> business model, first developed in the early <a href="https://www.edology.com/blog/fashion-media/rise-of-fast-fashion/">2000s</a> is responsible for the <a href="https://econsultancy.com/four-factors-fuelling-the-growth-of-fast-fashion-retailers/">increase in consumer demand</a> for high quantities of low-quality clothing. Many fashion products now being designed and made specifically for short-term ownership and premature disposal. Clothing quality is decreasing along with costs, and the increased consumption levels of mass-manufactured fashion products are pushing up the consumption of natural resources.</p> <p>The pressure to facilitate consumer hunger imposes significant social and environmental pressures on the manufacturing supply chain. The UK’s consumption levels of fashion are the highest in Europe, at <a href="https://www.parliament.uk/business/committees/committees-a-z/commons-select/environmental-audit-committee/news-parliament-2017/fashion-bosses-reveal-environmental-record-17-19/">26.7kg per capita</a>. This compares to a consumption rate of 16.7kg in Germany, 16kg in Denmark, 14.5kg in Italy, 14kg in the Netherlands and 12.6kg in Sweden.</p> <p>The need for change is tentatively being acknowledged by fashion brands and manufacturers. Many different market sectors in fashion, from high street to high end, are increasingly taking action. But it’s very conservative. For example, high street retailer H&amp;M are boycotting the use of <a href="https://www.independent.co.uk/news/world/americas/amazon-fires-brazil-hm-brazil-leather-deforestation-cattle-a9094586.html">Brazilian leather</a> over concerns that the country’s cattle industry has contributed to the deforestation of the Amazon rainforest. Meanwhile, other brands, such as Adidas, Stella McCartney and Patagonia, are focusing their action on the use of waste products in the development of textile materials for new collections.</p> <p>Of course, such policies can only be positive. But are fashion brands really doing enough to change? Recent <a href="https://www.un.org/press/en/2019/ga12131.doc.htm">UN reports</a> state that we have 11 years to prevent irreversible damage from climate change. It’s doubtful that the small, incremental changes made by brands will do enough to significantly contribute towards the fight on climate change, so more pressure from consumers and campaign groups is needed.</p> <p>Fashion brands are not the only ones who have the power to create change. Consumers also have leverage – and it’s key that they use it. As London Fashion Week opened earlier this month, large <a href="https://www.independent.co.uk/life-style/fashion/london-fashion-week-extinction-rebellion-protest-funeral-march-finale-a9109816.html">protests and demonstrations</a> highlighting fashion’s contribution to climate change reinforced the impact that consumers can have on raising public awareness of environmental issues. Consumer-driven behaviour change can encourage brands to adapt their practices towards a more sustainable future for the fashion industry.</p> <p>If real change is to happen, more people must begin to take a proactive approach and act in reflection of their moral values. Small lifestyle changes can create a big sustainable impact. So here are four things for you to consider before you buy any new clothes:</p> <h2>1. Think before you buy</h2> <p>Before we just buy more new clothes and contribute to escalating pollution, we need to think about the alternative options. This might not only save us money, but is also certainly better for the environment. These options include using what we have, borrowing, swapping, thrifting and making. Buying new items should be seen as the final choice, once all other options have been considered. This approach goes very much against the principles of fast fashion, with slow and considered consumption being the priority.</p> <h2>2. Shop by your values</h2> <p>We need to think about where we shop, as each purchase effectively acts as a vote towards the practices of a brand. By doing a small amount of research into a company’s responsible values, we can begin to make informed decisions about our shopping behaviour. This will ensuring that your chosen store reflects your personal beliefs.</p> <p>For example, if you want to know where your fashion comes from then you need to choose a brand that is transparent and open about their supply chain. Brands like <a href="https://communityclothing.co.uk">Community Clothing</a>, owned by Sewing Bee judge Patrick Grant, tell shoppers exactly where the raw materials were sourced from, where the yarn was produced and even where the final garment was made. Likewise, if you specifically want to take action against ocean plastic waste, then a brand like <a href="https://ecoalf.com/en/">Ecoalf</a> might be for you.</p> <h2>3. Buy a pre-loved item</h2> <p>The second-hand market is having a revival. Once seen as an edgy, individual and cost-effective method of shopping, it soon fell out of favour, to be replaced by cheap, mass-market product from fast-fashion retailers. But with Oxfam opening their <a href="https://www.bbc.co.uk/news/uk-england-oxfordshire-49650226">charity superstore</a> and Asda launching a pre-loved fashion <a href="https://www.edie.net/amp-news/12/Asda-forays-into-second-hand-clothing-market/">pop up shop</a>, buying second-hand clothing can give fashion products a new life and prevent the purchasing of new fashion garments.</p> <h2>4. Dispose responsibly</h2> <p>As well as considering where we buy our clothes, we too must consider the end-of-life options for our fashion items. It is estimated that <a href="http://www.wrap.org.uk/content/clothing-waste-prevention">£140m</a> worth of clothing goes to landfill each year. Many of these items will be made from synthetic fibres, meaning they can take anywhere between <a href="https://www.close-the-loop.be/en/phase/3/end-of-life">20-200</a> years to decompose. Again, people should explore a range of options available here, such as donating clothing to charity, recycling, reuse, repair and passing on items to friends and family. Why not hold a clothes swap at your house one weekend?</p> <p>Responsible procurement, ownership and disposal are all vital considerations when exercising your power to create sustainable change for the future of the fashion industry. Today, shoppers have more influence and ability to create change than ever before, with <a href="https://www.forbes.com/sites/jefffromm/2018/02/21/how-gen-z-is-using-social-media-to-affect-real-life-social-change/#1f29e7d149f4">social media platforms</a> allowing easier voicing of complaints and concerns. Meanwhile, the emergence of a <a href="https://www.ellenmacarthurfoundation.org/circular-economy/concept">circular economy</a> business model is again pushing consumers to take a more active role in creating change.</p> <p>We can no longer sit back and wait for brands to take action. Individual drive and willingness to change everyday behaviour will be crucial in changing the future environmental impact of fashion.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/123881/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: http://theconversation.com/republishing-guidelines --></p> <p><em>Written by <span>Alana James, Senior Lecturer in Fashion, Northumbria University, Newcastle</span>. Republished with permission of </em><a rel="noopener" href="https://theconversation.com/why-you-should-stop-buying-new-clothes-123881" target="_blank"><em>The Conversation</em></a><em>. </em></p>

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Secret car-buying tips your dealer won’t tell you

<p>Find out how to get the most value out of your purchase by side-stepping these common car dealer practices.</p> <p><strong>That car we advertised at the unbelievable price?</strong></p> <p>It’s a stripped-down model with a manual transmission, no air-conditioning, and crank windows. But we got you in, didn’t we?</p> <p><strong>The best time to buy is at the end of the month</strong></p> <p>… and it’s best to negotiate the trade-in separately. Negotiate up from the invoice price (what we paid for the car, easy to find on the Web), not down from the sticker price.</p> <p><strong>Everybody believes his trade-in is worth more</strong></p> <p>You’ve got bald tyres, chicken bones under the seats, and dust blowing from the vents, but you’re going to tell me your car is in “excellent” condition? Now who’s the pushy salesperson?</p> <p><strong>Here’s how to get a great price with minimal haggling</strong></p> <p>Call and ask for the Internet manager or fleet manager.</p> <p><strong>This is what happens once I’m sitting behind the desk</strong></p> <p>You’ll feel like I’m in control and may be willing to pay a little more. (We learn this during training.)</p> <p><strong>Ever wonder about those ads that promise a minimum $3,000 trade-in value for your clunker?</strong></p> <p>Those dealerships also pad the sales price to make up for the difference.</p> <p><strong>Every spring we have guys who show up and say they’re interested in one of our trucks and want to give it a spin</strong></p> <p>They think we don’t see the mulch on the floor when they bring it back.</p> <p><strong>Notice how many times we go back and forth to our manager?</strong></p> <p>The loud music, the gongs, and the blaring flat-screen TVs? All are distractions designed to help you lose track of what we’re doing with the deal.</p> <p><strong>We’re making less money on the car than you think</strong></p> <p>Our profit margin is typically 2 to 4 percent.</p> <p><strong>We all get our cars from the same place at roughly the same price</strong></p> <p>So if one dealer is offering to sell it for $2,000 less, there’s probably a catch.</p> <p><strong>Go in armed and educated</strong></p> <p>Study the pricing of the car you like and have your financing lined up. If you walk in with nothing, you’re not a customer, you’re a victim. Don’t be a victim when it comes to rental cars, either.</p> <p><strong>An older woman who walks in without an appointment, alone, is typically someone we can make a lot of money on</strong></p> <p>She’s usually uncomfortable with the process and just wants to get it over with.</p> <p><strong>If you want to test drive a bunch of models or need a lot of information…</strong></p> <p>Don’t pull in on a weekend without an appointment. Come by on a Tuesday or Wednesday.</p> <p><strong>Once you’ve agreed on a price, you think you’re done, but we’re just getting started</strong></p> <p>Worn out and ready to go home, you sign document after document. Then you wake up the next day, look down, and you signed a contract that had a $1,995 extended warranty that isn’t worth the paper it’s written on. And you’re stuck.</p> <p><em>Written by Michelle Crouch. This article first appeared in </em><span><a href="https://www.readersdigest.com.au/food-home-garden/money/secret-car-buying-tips-your-dealer-wont-tell-you"><em>Reader’s Digest</em></a><em>. For more of what you love from the world’s best-loved magazine, </em><a rel="noopener" href="http://readersdigest.innovations.co.nz/c/readersdigestemailsubscribe?utm_source=over60&amp;utm_medium=articles&amp;utm_campaign=RDSUB&amp;keycode=WRN93V" target="_blank"><em>here’s our best subscription offer.</em></a></span></p> <p><img style="width: 100px !important; height: 100px !important;" src="https://oversixtydev.blob.core.windows.net/media/7820640/1.png" alt="" data-udi="umb://media/f30947086c8e47b89cb076eb5bb9b3e2" /></p>

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How to curb your online shopping habit

<p><span>The holiday season might make us more inclined to browse through stores and make impulse purchases. The convenience of online shopping makes it easier to find the best deals and get your gifts and necessities in order. However, if you’re trying to stay on budget, there are things you can do to avoid overspending on the internet.</span></p> <p><strong><span>Remove your details</span></strong></p> <p><span>Make the shopping experience less convenient and <a href="https://www.lifehacker.com.au/2019/11/how-to-stop-spending-money-on-instagram/">build a buffer</a> between your banking account and the shops by removing all your payment information from your phone and go-to shopping websites. While it doesn’t fully prevent you from spending, putting in your credit card information manually might make you think twice about that item. </span></p> <p><strong><span>Wait it out</span></strong></p> <p><span>You might be worried about the cut-off dates, but waiting it out might be more beneficial for your wallet. “Put the item in your cart online and wait – ideally, at least 72 hours,” Lending Club financial officer Anuj Nayar told <a href="https://www.mic.com/p/instagram-is-making-you-spend-more-money-heres-how-to-stop-17293969"><em>Mic</em></a>. “You will, most likely, change your mind about making the purchase, realise you don’t love the item as much as you did a few days before or forget about it altogether.”</span></p> <p><strong><span>Follow financially savvy accounts</span></strong></p> <p><span>Keep your head in the goal of saving by having like-minded people in your social feed. You will be able to see other people’s journey towards similar objectives and perhaps gain a few helpful tips along the way. </span></p>

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What the royals would earn if they had real-life jobs

<p><span>As members of the royal family, the Dukes and Duchesses might be <a href="https://www.oversixty.com.au/travel/international-travel/the-world-s-richest-royal-in-2019-revealed/">worth millions of dollars</a> – but how much would they earn as a commoner?</span></p> <p><span>Training and qualifications provider <a rel="noopener" href="http://www.theknowledgeacademy.com/" target="_blank">The Knowledge Academy</a> has analysed the royals’ skills and qualifications to discover the job and the salary they would have if they were part of today’s job market.</span></p> <p><span>Duchess Meghan came out as the top earner with an expected annual salary of £350,000 thanks to her acting experience, while Prince Harry and Prince William could earn between £21,000 and £55,000 as a charity worker or a major in the army.</span></p> <p><span>Duchess Kate – the first royal bride with a university degree – could earn up to £23,000 in a corporate administrative or marketing role, considering her experience working for high-end retailer Jigsaw and her parents’ party supplies company Party Pieces.</span></p> <p><span>Sophie, Countess of Wessex would earn £40,000 with her secretarial training and PR experience. Her husband Prince Edward, who had worked in production for theatre and television, could earn up to £28,000 as an experienced production assistant.</span></p> <p><span>Princess Anne and Duchess Camilla, who had limited work experience, were expected to have a salary of £19,000 and £17,500 as a charity worker and a secretary respectively.</span></p>

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Why shopping addiction is a real disorder

<p>UK-based healthcare group the Priory is well-known for treating gambling, sex, drug, alcohol and computing addictions – especially of the <a href="https://www.thesun.co.uk/fabulous/7327125/the-priory-celebrity-guests-katie-price-rehab-centre-cost/">rich and famous</a>. Now it has added a new condition to its list: shopping addiction.</p> <p>Research suggests that as many as <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/add.13223">one in 20 people</a> in developed countries may suffer from shopping addiction (or compulsive buying disorder, as it’s more formally known), yet it is often not taken seriously. People don’t see the harm in indulging in a bit of “retail therapy” to cheer themselves up when they have had a bad day.</p> <p>Indulging in the occasional bit of frivolous spending is not a bad thing, if it is done in moderation and the person can afford it. But for some people compulsive shopping is a real problem. It takes over their lives and leads to genuine misery. Their urges to shop become uncontrollable and are often impulsive. They end up spending money they don’t have on things they don’t need.</p> <p>The worst part is that compulsive buyers continue to shop regardless of the negative impact it has on them. Their <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMc1805733/">mental health gets worse</a>, they get into serious debt, their social network shrinks, and they may even contemplate suicide – but shopping still provides the brief dopamine rush they crave.</p> <p>There is no doubt that people who engage in this behaviour suffer, and often badly. But it is debatable whether compulsive buying disorder is a condition in its own right or a symptom of another condition. Often it is difficult to diagnose because people with compulsive buying disorder have symptoms of other disorders, such as <a href="https://psycnet.apa.org/record/1994-29953-001">eating disorders and substance abuse</a>.</p> <p><strong>Formal criteria needed</strong></p> <p>The most commonly used manuals for diagnosing mental disorders are the <a href="https://www.psychiatry.org/psychiatrists/practice/dsm">DSM</a> and <a href="https://icd.who.int/en">ICD</a>, and neither include diagnostic criteria for compulsive buying disorder. One reason may be that there are many theories about what kind of illness the disorder is. It has been likened to <a href="https://psycnet.apa.org/record/1995-01870-001">impulse control disorder</a>, mood disorders, <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1360-0443.1987.tb00424.x">addiction</a> and <a href="https://www.sciencedirect.com/science/article/pii/S0005789402800259">obsessive-compulsive disorder</a>. How the disorder ought to be classified is an ongoing debate.</p> <p>What is also an <a href="https://www.macmillanihe.com/page/detail/Consumption-Matters/?K=9780230201170">ongoing debate</a> is what the disorder should be called. To the general public, it’s known as “shopping addiction”, but experts variously call it compulsive buying disorder, oniomania, acquisitive desire and impulse buying.</p> <p>Researchers also struggle to agree on a definition. Perhaps the lack of a clear definition stems from the fact that research shows that no single factor is sufficiently powerful to explain the causes of this compulsive behaviour.</p> <p>What most experts seem to agree on is that people with this condition find it difficult to stop and that it results in harm, showing that it is an involuntary and destructive kind of behaviour. People with the condition often try to hide it from friends and partners as they feel shame, thereby alienating themselves from the people who are best placed to support them.</p> <p>Although the disorder has not yet been clearly defined by name, symptoms or even category of mental health problem, most researchers agree on one thing: it is a real condition that people truly suffer from.</p> <p>The fact that the Priory, a well-established healthcare group, is treating people with compulsive buying disorder, may help to raise awareness of the condition. Hopefully, this will result in more research being conducted to help define diagnostic criteria. Without the criteria, it will be difficult for healthcare professionals to diagnose the illness and treat it. This is a condition that is crying out to be properly recognised and should not be trivialised.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/123813/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: http://theconversation.com/republishing-guidelines --></p> <p><em>Written by <span>Cathrine Jansson-Boyd, Reader in Consumer Psychology, Anglia Ruskin University</span>. Republished with permission of </em><a rel="noopener" href="https://theconversation.com/shopping-addiction-is-a-real-disorder-123813" target="_blank"><em>The Conversation</em></a><em>.</em></p>

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How to tell when a special deal is not so special

<p>Special offers at the supermarket aren’t always what they seem. It doesn’t mean you can’t get better value by taking advantage of discounts and deals – you just need to make sure it really is going to save you money. Here are some “deals” that you should approach with caution:</p> <p><strong>1. Price cuts that aren’t real</strong></p> <p>Just because some deals say it costs less than full price, it doesn’t always mean it was on sale at the higher price for long. Sometimes promotions featuring a “was/now” price change sticker are on sale at the reduced price for longer and more often.</p> <p><strong>2. Bigger packs more expensive</strong></p> <p>Big “value packs” suggest the best value. But it’s sometimes the case that it’s cheaper to buy the smaller packs. You can also get caught out by the packaging being downsized but the price staying the same, or fruit and vegetables being cheaper sold loose rather than in packs (and vice versa).Tip: Most supermarkets have the unit price (eg, per 100g) on the label located on the shelf, so you can check whether it’s cheaper to buy in bulk.</p> <p><strong>3. Multi-buys can cost more than single items</strong></p> <p>If you need more than one of an item, multi-buys such as Buy One, Get One Free, can save you cash. Be careful though: some supermarkets have been found to increase the price of one item when they’re in a promotion and lower it when they’re not. This makes you think you’re saving more than you really are.</p> <p>The word “Special!” makes the shopper believe the product on sale is scarce, available only in one shop, and for a short time only. The shopper responds almost instinctively by buying the product – retail psychologists called this response the Scarcity Effect.</p> <p><em>This article first appeared in </em><span><a rel="noopener" href="https://www.readersdigest.com.au/money/How-to-Tell-When-a-Special-Deal-is-Not-So-Special" target="_blank"><em>Reader’s Digest</em></a><em>. For more of what you love from the world’s best-loved magazine, </em><a rel="noopener" href="http://readersdigest.innovations.co.nz/c/readersdigestemailsubscribe?utm_source=over60&amp;utm_medium=articles&amp;utm_campaign=RDSUB&amp;keycode=WRN93V" target="_blank"><em>here’s our best subscription offer.</em></a></span></p> <p><img style="width: 100px !important; height: 100px !important;" src="https://oversixtydev.blob.core.windows.net/media/7820640/1.png" alt="" data-udi="umb://media/f30947086c8e47b89cb076eb5bb9b3e2" /></p>

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Majority of people return lost wallets: The most honest countries

<p>Honesty is one of the traits we value most in others. We often assume it is a rather rare quality, making it important for us to find out who we can actually trust in this selfish world. But according to new research, there’s no need to be so cynical – it turns out most people in the world are honourable enough to return a lost wallet, especially if it contains a lot of cash.</p> <p>The study, <a href="https://science.sciencemag.org/lookup/doi/10.1126/science.aau8712">published in <em>Science</em></a>, looked at how often people in 40 different countries decided to return a lost wallet to the owner, after the researchers handed it in to the institution in which they said it had been found. Surprisingly, in 38 countries, the wallets with higher sums of money were returned more often than those with smaller amounts. This was the opposite of what the researchers had expected, they thought there would be a minimum dollar value at which participants would begin to keep the money.</p> <p>Overall, 51% of those who were handed a wallet with smaller amounts of money reported it, compared with 72% for a larger sum. The most honest countries were Switzerland, Norway and the Netherlands whereas the least honest were Peru, Morocco and China.</p> <p>So why is this and what does it tell us about the psychology of honesty? To get an idea, I ran a very informal focus group to find out what kinds of things people may ask themselves when making a decision to return a found wallet. A common view was that no one wanted to appear to act in a socially unacceptable way, and nobody wanted to appear to be a thief. And, of course, the more money in the wallet, the greater the crime.</p> <p>An important aspect of the new study, however, was that the wallets were handed in to people working in the institutions in which they were said to be found. Given that people in one institution may know each other and may start suspecting each other, there was a very real chance of being found out if the wallet was not handed in. This is perhaps different from finding a wallet yourself on public transport when all you may grapple with is your own conscience.</p> <p>The “found wallet” test has been used in research before but this is the first global study to use it and it involved more than 17,000 lost wallets. In 2009, a researcher <a href="https://www.youtube.com/watch?time_continue=26&amp;v=33SwGGm9eQc">carelessly “dropped”</a> a number of wallets all over Edinburgh to see what would happen. He got 42% of the wallets back, but wasn’t not the most interesting finding. It wasn’t only the money in the wallet that influenced whether it would be returned. Where a family photo, an image of a cute puppy, a baby or an elderly couple were included, the chances of the wallet being returned significantly improved.</p> <p><strong>Impressive advantages</strong></p> <p>We value honesty and other moral traits <a href="https://www.researchgate.net/publication/258920778_Moral_Character_Predominates_in_Person_Perception_and_Evaluation">higher than non-moral qualities</a>, including intelligence or humour. As honesty has become one of the cornerstones of society, we start eduacting fellow citizens about it from an early age, even in nurseries. Developmentally, we make decisions early on about morality and moral behaviour, such as whether to share a toy. In 1958, psychologist <a href="https://en.wikipedia.org/wiki/Lawrence_Kohlberg">Lawrence Kohlberg</a> developed an entire theory about the <a href="https://www.britannica.com/science/Lawrence-Kohlbergs-stages-of-moral-development">stages of moral development</a>.</p> <p>But doing the “right” thing is often very hard in reality. Recent research shows there is a trade off – acting honestly can <a href="https://scholarship.richmond.edu/jepson-faculty-publications/89/">significantly inhibit</a> your own desires. Luckily, there are important advantages. One study suggests that <a href="https://psychology.nd.edu/faculty/anita-e-kelly/">there are tangible health benefits</a> from being honest. In one study, researchers compared groups of people who were instructed to be either honest or dishonest, and found that the honest group reported fewer sore throats, headaches and general feelings of sickness during the duration of the experiment.</p> <p>Being honest <a href="https://www.nytimes.com/2017/09/19/well/mind/how-honesty-could-make-you-happier.html">may also make people happier</a>. This might be unsurprising when you consider a view in evolutionary psychology that honesty <a href="https://www.frontiersin.org/articles/10.3389/fpsyg.2016.01503/full">is a marker that encourages trust and cooperation</a>. So being honest gets you more collaborators and greater success, meaning it provides an evolutionary advantage. If we have evolved in this way, then it is hardly surprising that making a dishonest decision may go against our very nature.</p> <p><strong>The honest individual</strong></p> <p>Given how socially important honesty is, we often struggle to deal with being dishonest ourselves – it can fundamentally threaten our view of who we are. Indeed <a href="http://danariely.com/">behavioural economist Dan Ariely</a> has shown that we often <a href="http://danariely.com/books/the-honest-truth-about-dishonesty/">convince ourselves that we are honest</a> even though we may behave dishonestly, as long as those moral lapses are not huge.</p> <p>The memories of such failures can also become less vivid or even distorted over time. For example, we may attribute reasons for our behaviour that aren’t entirely accurate (“I only kept the found wallet so I could give half of the money to a beggar”) but better support our views of ourselves. Essentially <a href="https://theconversation.com/why-we-are-all-moral-hypocrites-and-what-we-can-do-about-it-66784">we are all moral hypocrites</a>.</p> <p>But which people are the most honest? We may be tempted to think it is those who are most trusted in our society. In the past, those in the UK who needed a passport application signed could choose from individuals from a number of trusted professions including <a href="https://www.nature.com/news/banking-culture-primes-people-to-cheat-1.16380">bankers</a>, priests, teachers, police officers and members of parliament. You probably smiled when you read that list – we’ve all heard of dishonest politicians, for example. Clearly, honesty is not universal in any profession, or among any one category of people.</p> <p>We are all human, and as such open to the same psychological pressures and difficult choices when faced with temptation – we arrive at our own threshold of honesty, and these thresholds can change over a lifetime. There is evidence that, as we age, <a href="https://journals.sagepub.com/doi/abs/10.1177/0146167215594189">we get more honest</a> as a result of becoming more norm focused – breaking the rules or seeking excitement becomes less common.</p> <p>But is honesty the best policy? Probably. That said, we will all agree that a “little white lie” here and there may be the best option sometimes. For example, choosing dishonesty over hurting someone’s feelings could in many cases be compassionate and socially acceptable.</p> <p>Knowing when to lie and understanding the consequences of it is the trick. Easing someone’s distress, or protecting ourselves from harm may certainly be acceptable – and we learn this too from an early age. I’ve concluded, for example, that telling a publisher that you’ve been working non-stop on an article as you rapidly approach deadline is a totally acceptable lie.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/119118/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: http://theconversation.com/republishing-guidelines --></p> <p><em>Written by <span>Nigel Holt, Professor of Psychology, Aberystwyth University</span>. Republished with permission of </em><a rel="noopener" href="https://theconversation.com/majority-of-people-return-lost-wallets-heres-the-psychology-and-which-countries-are-the-most-honest-119118" target="_blank"><em>The Conversation</em></a><em>. </em></p>

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12 kitchen mistakes that are costing you money

<p>When you need to cut back on expenses, the usual financial advice focuses on slashing your entertainment fund, cancelling subscriptions like Spotify Premium, investing in energy-efficient lightbulbs, or other tricks. No one ever tells you about all the money you’re wasting on food.</p> <p>Because eating is pretty much a basic necessity, people don’t think it’s a place where they can save – but that’s far from true. Global food loss and waste amounts to between one-third and one-half of all food produced… a staggering figure. “Without a set budget, it can be easy to look at your bank account at the end of the week and wonder how you spent hundreds on one-off trips to the grocery store or spontaneous pizza orders,” says Justin Bailey, co-founder of Vimvest, a financial planning app. Read on to discover the kitchen habits that are unknowingly draining your bank account, and how staunch the flow.</p> <ol> <li><strong> Your Uber Eats addiction</strong></li> </ol> <p>Everyone has days when they don’t feel like making dinner, but this may help you get in the cooking spirit: According to an analysis done by Forbes last year, ordering out could be costing you five times as much as cooking the same meal at home. Even delivery kits that supply ingredients for you to assemble into a meal are around three times as expensive as shopping and cooking yourself.</p> <ol start="2"> <li><strong> Convenience food</strong></li> </ol> <p>“I’ve learned that saving money in the kitchen is not about what you buy, but more how you buy it,” says Bailey. “Instead of buying something that is already chopped and in sealed off containers, buy the whole vegetable. These purchases tend to be cheaper and provide you with more of the item to work with.” Chop and slice enough for the week on a Sunday night and you won’t even be out much time.</p> <ol start="3"> <li><strong> Storing produce improperly</strong></li> </ol> <p>“Most people don’t know how to store their food properly, and it goes bad really quickly,” says Alma Schneider, founder of the blog and consulting company Take Back the Kitchen, and a licensed clinical social worker. “Moisture is your enemy.” She recommends wrapping fragile veggies like lettuce and herbs in a paper towel inside a resealable bag to extend their freshness. You can also dry fresh herbs so they last longer.</p> <ol start="4"> <li><strong> Single-use supplies</strong></li> </ol> <p>Oh, and while we’re on the subject, don’t toss those plastic bags after one use, Schneider adds. You can rinse and reuse them – she even repurposes the liners from cereal boxes for kitchen storage. Ditto paper towels – use fabric cloths instead. It’s better for the environment and your wallet.</p> <ol start="5"> <li><strong> Not using your freezer</strong></li> </ol> <p>A well-stocked freezer is a frugal chef’s BFF. Not only is freezing ideal for storing bulk buys (see #6), it’s also a great way to preserve produce or other foods that are about to go bad. “Most things can be frozen if you store them properly, then thawed and used as needed,” Schneider says.</p> <p>Bread, leftover pasta sauce, soup and fruit for smoothies are just a few of the foods you didn’t know you could freeze.</p> <ol start="6"> <li><strong> Buying ingredients for one meal at a time</strong></li> </ol> <p>“One of the first rules of saving money at the grocery store is to buy in bulk,” says Bailey. “Larger quantities equal less packaging and less waste, which means spending less money.” Non-perishables or things that can be frozen like meat are good to stock up on.</p> <ol start="7"> <li><strong> Passing on leftovers</strong></li> </ol> <p>One national survey found that two out of five people hate leftovers. We’re not sure how they got such a bad rap, but it is entirely undeserved. In addition to enjoying last night’s roast meat and potatoes for lunch the next day, you can use ingredients that weren’t quite used up, like half a jar of salsa or cooked quinoa, to make a delicious new meal like a salad or grain bowl, rather than throw it out. “Creative uses of portions of leftover food can make for fun, money-conscious meals,” says Bailey.</p> <ol start="8"> <li><strong> Wasting water</strong></li> </ol> <p>It’s a common misconception to think hand-washing your dishes is the more economical choice, but energy-star rated appliances are so efficient, they can slash your utility bills by more than $40 per year. If you have them, use them. Making sure to run a full load and shutting off the heat drying part of the cycle to let dishes air dry instead can increase your savings.</p> <ol start="9"> <li><strong> Eating too much meat</strong></li> </ol> <p>Plant-based diets tend to not only be healthier and better for the planet but less expensive, too. In one analysis, researchers compared the costs of a meat-based menu with a plant-based one. They found that eating a vegetarian diet could save more than $745 per year. You don’t have to give meat up if you love it, but cutting back or using recipes where you can stretch a little will help your bottom line.</p> <ol start="10"> <li><strong> Buying out-of-season produce</strong></li> </ol> <p>Blueberries in July might sound refreshing, but you’ll pay a premium for them. Shopping with the seasons will not only save you cash, but it’s also likely to taste better too, since what you’re eating has been grown fresh naturally, not in a greenhouse somewhere and shipped across the globe. You can also try preserving summer picks yourself by pickling or canning to last through the off-season.</p> <ol start="11"> <li><strong> Tossing stuff because of the “best by” date</strong></li> </ol> <p>No one wants to risk food poisoning, but the dates on food labels don’t mean what’s inside is no longer safe to consume. According to the USDA’s Food Safety and Inspection Service, “except for infant formula, dates are not an indicator of the product’s safety.” If the food looks and smells okay and has been handled and stored properly, it’s generally fine to consume.</p> <ol start="12"> <li><strong> Not planning ahead</strong></li> </ol> <p>“The overarching theme for people who waste money in the kitchen is they don’t plan ahead,” says Schneider. Having a basic meal plan for the week can help you use up fresh ingredients before they go bad and reuse leftovers from one meal in the next one. It also helps prevent impulse buys at the supermarket, says Bailey. “If you aren’t sure what you are going to eat for dinner and don’t have appropriate ingredients at home, you’re more likely to overspend by making last-minute decisions that aren’t strategic money-wise.”</p> <p><em>Written by Jill Waldbieser. This article first appeared in </em><span><a href="https://www.readersdigest.com.au/kitchen-tips/12-kitchen-mistakes-that-are-costing-you-money"><em>Reader’s Digest</em></a><em>. For more of what you love from the world’s best-loved magazine, </em><a rel="noopener" href="http://readersdigest.innovations.co.nz/c/readersdigestemailsubscribe?utm_source=over60&amp;utm_medium=articles&amp;utm_campaign=RDSUB&amp;keycode=WRN93V" target="_blank"><em>here’s our best subscription offer.</em></a></span></p> <p><img style="width: 100px !important; height: 100px !important;" src="https://oversixtydev.blob.core.windows.net/media/7820640/1.png" alt="" data-udi="umb://media/f30947086c8e47b89cb076eb5bb9b3e2" /></p>

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How to save money without pinching pennies

<p><span>Saving is necessary – yet the idea of limiting your spending can feel restrictive and stifling. Here are a few tricks you can try to make saving easier and more fun.</span></p> <p><strong><span>Look for a great deal</span></strong></p> <p><span>Whether you’re buying a new item or signing up for ongoing services – phone, internet, insurance, credit cards and more – it’s a good idea to browse through comparison sites to find the best rates. This could help you save hundreds or even thousands in the long run. Looking through discount sites or online reviews can also help you make your financial decisions. </span></p> <p><strong><span>Review your subscriptions</span></strong></p> <p><span>It’s easier than ever to subscribe to streaming services, online newspapers and mobile apps, but that also means there may be some spending that you leave unaccounted. Take a look at your accounts to see any active subscriptions and cancel the ones you no longer use.</span></p> <p><span>You can also take advantage of the family deals that these subscriptions often offer – if the people in your household all use the same services, consider getting a joint account to make the monthly bill a little lighter.</span></p> <p><strong><span>Go for pre-loved items</span></strong></p> <p><span>From clothing to appliances, shopping second hand or refurbished can be a great option. You can also use the same platform to sell your old belongings.</span></p> <p><strong><span>Consider home brands</span></strong></p> <p><span>Some staples such as toothpaste, tissue rolls, and soap will almost always be needed in a household. If you don’t feel tied to any particular brand, it’s time to make the economical switch and go for supermarket home brands. They generally have similar active ingredients and/or quality as the name brand products, but come at a fraction of the price. </span></p> <p><strong><span>Get app’d</span></strong></p> <p><span>Some mobile apps can help you put some money aside by taking spare change from everyday purchases into a savings or investment account. This type of apps usually charge fees, so read the fine print before you begin.</span></p> <p><strong><span>Visualise the goal</span></strong></p> <p><span>Once you set your savings goal, create a visual representation to see how far along you are in the journey. This will make your goal seem more tangible and help motivate you to stay on the course and accomplish the task. If you’re aiming to save $10,000 by the end of the year, you can draw a thermometer or graph to track your progress. Looking towards a specific objective, like saving up for a Hawaii holiday? Print out pictures of the places you want to visit and place them in your wallet or other spots you frequent as a reminder. This also helps shift your focus from the restrictions (“I can’t buy this because I have to be mindful!”) to the opportunities (“This will help me purchase a new car sooner!”).</span></p>

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8 foods you don’t need to refrigerate

<p>Do you know which foods don't need to be refrigerated? For many of us, the answer is a matter of what we grew up with or personal preference.</p> <p>But there are some hard and fast rules. </p> <p>Here are some foods you definitely shouldn't put in your fridge.</p> <p><strong>1. Tomatoes</strong></p> <p>Tomatoes are best left on the bench and not in your fridge because they're sensitive to ethylene – a gas that accelerates ripening. Keeping your tomatoes separate from ethylene-producing foods, such as bananas, apples, pears and oranges, will ensure they stay fresh for longer. <br /><br /><a href="https://choice.us4.list-manage.com/track/click?u=270103a13e38b9f6643b82a8e&amp;id=1fe3558b8d&amp;e=7f9260877c">Research</a> also shows that chilling tomatoes below 12°C limits their ability to generate substances that contribute to aroma and taste. In other words, they won't be as nice to eat. <br /><br />"Tomatoes lose flavour when placed in the fridge," says CHOICE's home economist Fiona Mair. "I always keep my tomatoes in my fruit bowl or on the window sill. <br /><br />"I like to buy a mixture of firm and slightly soft tomatoes so I have beautifully ripened tomatoes I can use across the week." </p> <p><strong>2. Coffee</strong></p> <p>Ground or whole-bean coffee should never be kept in the fridge, even if it's in an airtight container. Why? Because coffee works as a deodoriser and absorbs moisture, odours and flavours from the air around it, making your morning cuppa taste less like the nectar of the gods and more like a nasty flavouring of 'fridge'. Ew. <br /><br />Instead, keep your beans in an airtight container in a dark space such as your pantry, away from sunlight, heat, steam and moisture. For the best  flavour and freshness, buy your beans as fresh as possible and use them within 72 hours of roasting. <br /><br />If that's not possible, you can store your coffee beans in the freezer for up to a month, according to the US National Coffee Association. But do so in small portions because, once you've taken your beans out of the freezer, it's best not to put them back in again.</p> <p><strong>3. Uncut root vegetables </strong></p> <p>Root vegetables, such as potatoes, onions, sweet potato and garlic, thrive outside the fridge crisper. The high humidity in fridges can cause root vegetables to rot faster. It's also important that you don't store root vegetables together, as this can affect their flavour. <br /><br />"Keeping these types of food out of the refrigerator is generally to avoid moisture absorption that happens in the refrigerator, as this can cause foods to ferment and reduce the taste and quality," says Mair. "Best to find a cool dry dark spot in your kitchen." <br /><br />According to Aloysa Hourigan, accredited practising dietitian and nutritionist and media manager at <a href="https://choice.us4.list-manage.com/track/click?u=270103a13e38b9f6643b82a8e&amp;id=9db113104f&amp;e=7f9260877c">Nutrition Australia</a>, there are some exceptions to the rule, especially after the vegetables have been cut. <br /><br />"Onions are best stored out of the fridge until they're cut, then need to be covered or placed in a sealed container and kept in the fridge," she says. <br /><br />"Whole pumpkins can be stored out of the fridge for many weeks, but once cut, they need to be stored in the fridge." <br /><br /><br /><strong>4. Coconut oil</strong> <br />"Coconut oil is climate-dependant and will solidify at temperatures lower than 24°C, so it's best to keep it in a cool, dark place like the pantry," says Fiona. <br /><br />But she says as a general guide, nut and seed oils are best kept in the refrigerator, otherwise they're "more likely to oxidise and go rancid quickly." <br /><br />Whether or not you need to put a condiment in the fridge depends entirely on the type of sauce, oil or spread you have, how much preserving salt or sugar they contain, and whether it's been opened. <br /><br />"With bottled sauces, such as soy sauce, sweet chilli sauce, oyster sauce and curry pastes, it's always best to check the label to see if it says 'refrigerate after opening'," says Hourigan. <br /><br /><strong>5. Bread</strong></p> <p>Bread doesn't belong in the fridge – it'll go stale much faster than if you just keep it in the pantry. <br /><br />Instead, keep your bread in an airtight tin, bread box or, for hard-crusted bread, a brown paper bag. Avoid plastic too, as this encourages bread to go mouldy faster. <br /><br />Fresh bread will only last a few days before it naturally goes stale, but you can extend its life span by putting it in the freezer. Doing so slows down the natural process of retrogradation and recrystallisation, and stops it going stale.</p> <p><strong>6. Honey and peanut butter</strong></p> <p>Honey and nut spreads are all unique, so all need different types of storage. This is why it's important to always check the label for advice.</p> <p>Honey is unique - one of the few foods in the world that never spoils thanks to its one-of-a-kind chemical make-up. The reason honey doesn't go bad is because bacteria can't grow in it, so it's happy to sit at room temperature in your pantry, where it stays soft and easy to spread. When refrigerated, honey crystallises, but is still perfectly edible.</p> <p>Honey's durability is legendary. When archaeologists opened ancient Egyptian tombs, they found jars of honey from the days of the Pharaohs that were still good to eat.<br />As for peanut butter, it's fine in the pantry for three months or so after opening. But to extend its shelf life and avoid oil separation, you can also keep it in the fridge, though this will harden it and could make it a bit more difficult to spread.</p> <p><strong>7. Basil and parsley </strong></p> <p>Some herbs such as coriander and mint are best kept in the refrigerator crisper, wrapped loosely in absorbent paper and put in a sealed container. <br /><br />But basil and parsley will turn a nasty shade of yuk if you keep them in the crisper. <br /><br />"These herbs seem to do better out of the fridge," says Hourigan. "The dry air in the refrigerator causes the leaves to wilt easily." <br /><br />To store your basil and parsley, Mair says, cut the bottom of the stems, place them in a jar with a small amount of water, then leave the jar in a cool place. "You'll just need to change the water and cut the bottom of the stems every couple of days," she says. <br /><br /><strong>8. Warm leftovers</strong></p> <p>Putting hot food in the fridge can wreak havoc on its internal temperature, which may affect other food in the fridge as well. <br /><br />So, for the sake of freshness, leave your warm leftovers to fall to room temperature first.  </p> <p><em>Republished with permission of <a rel="noopener" href="https://www.choice.com.au/home-and-living/kitchen/fridges/articles/eight-foods-you-do-not-need-to-refrigerate" target="_blank">CHOICE</a>.</em></p>

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What should you do with unexpected money?

<p><span>Perhaps you just won a lottery, landed a big client in your business, or simply received your tax refund. Either way, a sudden influx of cash is always welcome. </span></p> <p><span>But how can you best manage the incoming cash? Here are a few things you should consider.</span></p> <p><strong><span>Put it towards your top financial goal(s)</span></strong></p> <p><span>If you are working on paying off debt, saving up for a down payment or upgrading your car, the windfall may put you on the fast track or at least provide some shortcuts.</span></p> <p><span>If you have no specific goal in mind, putting a good chunk of the money aside as a fallback or emergency fund is a good idea in case of a rainy day.</span></p> <p><strong><span>Save it up</span></strong></p> <p><span>Park your cash in a savings account with your bank or financial institution. The interest rates may help your money grow, even at a modest pace.</span></p> <p><strong><span>Invest</span></strong></p> <p><span>Put your money to work by investing. There are a lot of options today, from shares and property to cryptocurrencies. Don’t forget to evaluate the risks and read the fine print.</span></p> <p><strong><span>Treat yourself</span></strong></p> <p><span>Budgeting does not always have to be dull and restrictive – if you feel like indulging yourself, set aside a small part of the extra cash for hobbies, trips, beauty treatments or other fun activities you’ve always wanted to do. </span></p> <p><span>You can also use this to buy more time for yourself – for example, instead of doing chores, outsource the task and allow yourself some relaxing downtime. Alternatively, depending on the size of your windfall, you can invest in a new car or white goods that will let you <a href="https://www.lifehacker.com.au/2019/07/what-to-do-with-unexpected-money/">complete tasks faster</a>. </span></p>

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Why you should keep your everyday bank account to the bare minimum

<p><span>When you sign up with a bank, you are likely to receive two accounts – one for everyday transactions and one for savings. </span></p> <p><span>A transaction account usually comes with a card so that you can withdraw cash at the ATM and pay day-to-day expenses. On the other hand, a savings account does not usually have a linked card – but it offers higher interest rates compared to the transaction account, allowing you to grow your balance. </span></p> <p><span>Many people put a large sum of their money on their transaction accounts for practical purposes – who knows when you need to make a major purchase? – but experts say this move may not be so wise in the bigger picture.</span></p> <p><span>“I … realised that money sitting in a debit account just, well, sits there,” Laura Munoz of <a href="https://thefinancialdiet.com/5-life-changing-financial-habits-i-took-way-too-long-to-adopt/"><em>The Financial Diet</em></a> wrote. “It doesn’t earn interest and it’s not working for you, so there’s no real reason to keep more than a healthy buffer there in case you need to take out cash in a pinch.”</span></p> <p><span>While it is important to maintain a healthy balance to pay bills and everyday needs in your transaction account, Munoz said savings should be prioritised before spending. By working out how much you roughly spend every month, you can plan ahead and keep only the bare minimum amount in the transaction account to cover everyday expenses while transferring the rest to the savings account immediately.</span></p> <p><span>As <a href="https://www.moneysmart.gov.au/managing-your-money/banking/transaction-accounts"><em>MoneySmart</em></a> advises, “Only keep the money you need to cover your everyday costs in your transaction account. Put the rest of your money in a savings account and watch your savings grow with the extra interest.”</span></p> <p><span>This can also help you curb your shopping habits, as the limited amount will make you more aware of the dollars you fork out.</span></p> <p><span>Munoz said she is now putting most of her cash in two places –a high-yield, risk-free savings account and another savings account that is invested in the stock market. This does not have to be the case for you if you are more risk-averse – find a savings account where your earnings can comfortably grow, and make money work for you.</span></p>

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Why we perceive ourselves as richer than we really are

<p>Every day billions of people make countless decisions that have economic implications. Buying new clothes, having dinner at a Japanese restaurant, renting a house: most of our decisions determine how much money we spend or save. Some of our decisions also increase the amount of debt we have accumulated, such as when we buy a book and pay by credit card or when we obtain a loan to buy a new car.</p> <p>Do people always weigh up pros and cons, use all the available information and commit to their long-term goals when making such decisions? Research in behavioural economics suggests this is not the case.</p> <p>For example, even though many Americans argue that they should be saving more for retirement, they declare that they frequently <a href="https://scholar.harvard.edu/laibson/publications/hyperbolic-consumption-model-calibration-simulation-and-empirical-evaluation">do not commit to their saving decisions</a>.</p> <p>In general, psychologists and behavioural scientists have long found that the gaps between people’s intentions and their actual behaviour are often due to cognitive biases – <a href="https://onlinelibrary.wiley.com/doi/pdf/10.1002/9780470939376.ch25">systematic errors in thinking</a> that affect individual decisions and judgements.</p> <p>Cognitive biases explain why our economic decisions often appear to be flawed by self-control problems, myopic behaviour, changes in preferences over time and other behavioural inconsistencies.</p> <p>For instance, <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1540-6261.2009.01518.x">scholars</a> have found that people have a cognitive bias that often leads them to underestimate the true cost of debt, thus borrowing more than what they can afford.</p> <p>As another example, research in economic psychology <a href="https://www.researchgate.net/publication/23547394_Unfixed_Resources_Perceived_Costs_Consumption_and_the_Accessible_Account_Effect">has shown</a> that the perceived cost of an item is lower than the actual cost if people compare it to greater, rather than smaller, financial resources.</p> <p>For instance, even though a person knows that the objective cost of a T-shirt is 25 euros, that person is more likely to buy the T-shirt if she mentally compares the cost to the money in her bank account (for instance 23,000 euros) rather than the money in her wallet (let’s say 100 euros).</p> <p><strong>The bias on wealth perception</strong></p> <p>Following this line of research, at the Complexity Lab in Economics (CLE) of Università Cattolica del Sacro Cuore in Milan, <a href="https://www.axa-research.org/en/projects/alberto-cardaci">I have recently started a new project</a>, “Cognitive biases, perceived wealth and macroeconomic instability”, with the help of a postdoctoral scholarship by the AXA Research Fund.</p> <p>By combining findings from behavioural economics and social cognitive psychology with the techniques of experimental economics, the project essentially tests the hypothesis that some people tend to spend more than they “should” because they have the wrong perception of how wealthy they are.</p> <p>In other words, our working assumption is that, depending on <a href="https://www.investopedia.com/terms/l/leverage.asp">the value of leverage</a> (that is, the ratio between debt and net worth), people may feel wealthier even when their net worth has not changed, and that this makes them psychologically more prone to increase their spending, as well as their borrowing. We call this the “leverage bias hypothesis”.</p> <p>At CLE we have run some preliminary laboratory experiments to test the presence of the leverage bias. Our first results (to be published) confirm that around 78% of the participants have a wrong perception of the amount of wealth owned and this perception changes based on <em>how</em> wealth is composed, even when the net value remains constant.</p> <p>We postulate that this misperception of wealth may play a significant role at explaining individual consumption and borrowing decisions that do not appear rational based on canonical economics.</p> <p>Indeed, the potential implications of a cognitive bias of this type are substantial. An individual with a distorted perception of wealth may feel financially better off, consume more, borrow a larger amount of loans and overestimate her ability to pay back her debt in the future.</p> <p>This behaviour would have consequence not only for the borrower, but also for the lender: a borrower’s inability to meet the debt obligations would result in the accumulation of non-performing loans on the balance sheet of financial institutions in the credit market.</p> <p><strong>Partial explanations for massive crash</strong></p> <p>By extending this reasoning to a greater scale, it is also possible that macroeconomic fluctuations be (at least partially) explained by the excess spending and debt accumulation trigger by the leverage bias. This is the case when a large number of people perceive themselves as richer than they actually are: consumption can rise in the aggregate to the extent that such people possibly increase their debt being inaccurately confident that they will be able to pay it back.</p> <p>Before the 2007 financial crisis the level of household debt skyrocketed, going <a href="https://www.investopedia.com/updates/usa-national-debt/">beyond 100 per cent of GDP</a>. In those years, the American society easily and quickly moved from debt-led to debt burdened.</p> <p>While almost certainly not all personal debt accumulated in society could be attributed to behavioural fallacies, it is worth investigating whether distorted perceptions of wealth may have tremendous costs not only at the individual level but also at the macroeconomic one.</p> <hr /> <p><img src="https://images.theconversation.com/files/202296/original/file-20180117-53314-hzk3rx.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip" alt="" /> <span class="caption"></span></p> <p><em>Created in 2007, the Axa Research Fund supports more than 500 projects around the world conducted by researchers from 51 countries. To learn more about the work of Alberto Cardaci, visit his <a href="https://albertocardaci.wixsite.com/alcardaci">site</a> as well as the <a href="https://www.axa-research.org/en/projects/alberto-cardaci">Axa Research Fund dedicated page</a>.</em><!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/95965/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: http://theconversation.com/republishing-guidelines --></p> <p><em>Written by <span>Alberto Cardaci, Post-doctoral fellow, Complexity Lab in Economics (CLE), Università Cattolica del Sacro Cuore - Catholic University of Milan</span>. Republished with permission of </em><a href="https://theconversation.com/why-we-perceive-ourselves-as-richer-than-we-think-we-are-95965"><em>The Conversation</em></a><em>. </em></p>

Retirement Income

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3 ways to save money without sacrificing your social life

<p><span>It’s hard to stay social when you’re trying to curb expenses. However, there are tricks that will allow you to spend some quality time with friends and loved ones without having to feel like you’re throwing money down the drain.</span></p> <p><strong><span>1. Be honest, be positive</span></strong></p> <p><span>You don’t have to make flimsy excuses to avoid going out – be open about your intentions, but frame it positively. Instead of saying “these events are too expensive”, you can tell them, “I’m trying to be really good at saving and staying home these days”. While it may be uncomfortable to say no to invites outright, your friends may turn out to be more supportive to your goals than you expected.</span></p> <p><strong>2. Provide alternatives</strong></p> <p><span>Fill your social calendar with free or cheap activities. This could be a visit to the new art exhibition in your city, a potluck picnic at the park, a hike by the mountains, a game night at your home, and more. Don’t forget to look out for special promos and discounts on popular websites like Groupon or Scoopon for more affordable options.</span></p> <p><strong>3. Put it in the budget</strong></p> <p><span>Don’t want to skimp on your bar outings or group classes? It’s time to look at your budget. Once you determine the amount you need to save every month, set aside some of the rest for fun-related expenses. Budgeting allows you to figure out your priorities and stay within the limits. Stick to your allocated budget well – once it’s out, do not extend it any further!</span></p>

Retirement Income