We all know at least one person who has squandered his or her money and ended up in dire financial straits, leaving parents, friends, or a spouse with the burden of bailing the individual out. But it doesn't have to be this way!
Judging from what people who have ended up as such have told me, I've narrowed down the reasons why people go broke to two primary ones:
1. They want to show off: Some people have a compulsion to have the latest and greatest. Whether it's the newest car or smart phone, they're not satisfied unless their stuff has all the bells and whistles. They wouldn't be caught dead with something that doesn't have the Louis Vuitton, Coach, or Michael Kors logo on it.
What these consumers fail to realize that premium brands come with a high price tag. What's more, it's easier to become more oblivious to just how much you're spending when you're using plastic rather than paper. Is it any wonder these people rack up ever-increasing credit card debt?
2. They want to keep up with the Joneses: Have you noticed that some people become interested in a product only after their neighbor, friends or family members acquire it? I see this namely with technology-based products ranging from iPhones to television sets. I've also noticed that when a person in the neighborhood buys a luxury car, it isn't long before more of them begin springing up.
Consumers are constantly comparing their possessions to those of others. It doesn't even matter whether they truly want that new Rolex -- if Jack or Wendy has it, so should they! The thought of someone else having "better" stuff doesn't sit well with a lot of people and, unfortunately, their bank account suffers as a result.
My suggestion to these big spenders: Do not base your purchasing decisions on what others think or do. At the end of day, people might neither notice nor care about what brands you're sporting. For example, since I seldom opt for a premium brand, I hardly notice when others around me do.
What's more, let's not forget that the novelty of new products eventually wears off. It's not worth it to overexert yourself financially for things you may not need. The best policy is always to live within -- or better yet, below -- your means!
Judging from what people who have ended up as such have told me, I've narrowed down the reasons why people go broke to two primary ones:
1. They want to show off: Some people have a compulsion to have the latest and greatest. Whether it's the newest car or smart phone, they're not satisfied unless their stuff has all the bells and whistles. They wouldn't be caught dead with something that doesn't have the Louis Vuitton, Coach, or Michael Kors logo on it.
What these consumers fail to realize that premium brands come with a high price tag. What's more, it's easier to become more oblivious to just how much you're spending when you're using plastic rather than paper. Is it any wonder these people rack up ever-increasing credit card debt?
2. They want to keep up with the Joneses: Have you noticed that some people become interested in a product only after their neighbor, friends or family members acquire it? I see this namely with technology-based products ranging from iPhones to television sets. I've also noticed that when a person in the neighborhood buys a luxury car, it isn't long before more of them begin springing up.
Consumers are constantly comparing their possessions to those of others. It doesn't even matter whether they truly want that new Rolex -- if Jack or Wendy has it, so should they! The thought of someone else having "better" stuff doesn't sit well with a lot of people and, unfortunately, their bank account suffers as a result.
My suggestion to these big spenders: Do not base your purchasing decisions on what others think or do. At the end of day, people might neither notice nor care about what brands you're sporting. For example, since I seldom opt for a premium brand, I hardly notice when others around me do.
What's more, let's not forget that the novelty of new products eventually wears off. It's not worth it to overexert yourself financially for things you may not need. The best policy is always to live within -- or better yet, below -- your means!
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