Category: Psychology of Spending

Passive income has long been hailed as the ultimate way to earn money without breaking a sweat. However, there are numerous myths and misconceptions surrounding passive income that need to be debunked. In this section, we will dive into the common misconceptions about passive income and provide a clearer understanding of its strategies and realities.…

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Happiness economics is a field of economics that recognizes the importance of happiness and well-being as outcome measures. It emphasizes the impact of economic and financial factors on our overall well-being. While wealth is often associated with happiness, research has shown that the relationship between money and happiness is complex. Studies have found that while…

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Social comparison theory, evaluation, comparisons, and self-assessment are fundamental aspects of human behavior. Introduced by psychologist Leon Festinger in 1954, social comparison theory explains how people evaluate themselves by comparing their actions, accomplishments, and opinions to others. This theory sheds light on the innate drive to assess one’s own worth through social comparisons. We constantly…

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Psychologists and marketing experts have conducted extensive research on the perception of wealth and its impact on society. In a study involving 2,800 participants, it was found that people often admire individual billionaires but harbor a cynical view towards wealthy groups such as C-suite executives. This perception of wealth and inequality is influenced by the…

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Our decisions about money are influenced by our psychology. Understanding the psychological barriers to saving can help us overcome them and make better financial choices. These barriers include the rush we feel when spending money, the lack of intentionality in our purchasing decisions, and the lack of awareness about the benefits of saving and compounding…

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Goal-oriented saving is a popular strategy for achieving financial security and accomplishing personal goals. However, many people struggle to effectively implement this approach and fail to see the desired results. In this article, we will explore some surprising reasons why goal-oriented saving can fail and how to overcome these obstacles. One of the main reasons…

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An emergency fund is a critical component of any financial plan. It is a cash reserve specifically set aside for unplanned expenses or financial emergencies. The importance of having an emergency fund cannot be overstated, as it provides a crucial safety net and protects against the unexpected. Without savings, even a minor financial shock can…

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When it comes to managing our finances, the art of saving money is an essential skill. However, there are hidden pitfalls that can jeopardize our efforts to safeguard our finances. Understanding these unexpected risks is crucial in order to implement the right strategies and protect our financial well-being. Lifestyle creep, also known as lifestyle inflation,…

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When it comes to investing, many people prioritize safety and security. The fear of losing money often outweighs the desire for potential gains. This phenomenon, known as “loss aversion,” has been capitalized on by Wall Street, leading to the creation of products that claim to offer downside protection. However, it’s important to understand that the…

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Losing someone or something significant in our lives can be an incredibly challenging experience. The psychology of loss explores the profound impact it has on our emotional well-being and the journey of healing that follows. Understanding the stages of grief and effective strategies for coping with grief can help us navigate through this difficult process.…

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