Tag Archives: consumerism

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Scientists figure out we’re too horny for immediate gratification to save.

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“It turns out that your brain is much more aroused by $1 today than by $1 tomorrow. And $1 six months from now barely registers,” according to “new discoveries in neuroscience labs.” Oh, come on, I could have told you that, and I’m no scientist.

Basically, for your brain to accept waiting for interest to accrue, it has to accrue at some impossible rates.

“For your brain to be willing to wait a mere three weeks for a higher payout, that $20 would have to grow at an annualized rate of roughly 4,800%.”

Eeks.

I’m glad that I’m accepting saving, and potential interest on my savings, is a long-term investment. I don’t even let myself accept that I’ve made the money I will be investing. If I for a moment acknowledge that I could be spending that money now, it would be much harder to lock it up in savings until I’m old and gray.

One interesting tidbit I found in the article is that “the average holding period for a stock, among individual and professional investors alike, is just over 11 months.”

Whoa. I’m doing pretty good, then. I don’t mind holding, even when I’m losing money. It’s easy to do this because, again, I haven’t accepted that I’ve earned that money. I’d like to save for a house or grad school, or some other large-ticket item, but at the moment all of those purchases seem so impossible to me, it doesn’t matter much if I lose money. As long as I can keep making money, I know I’ll be fine. I just need my rent payment for my studio and food money and I can deal. All the extras is just that – extra.

I can see why later in life, investing might get more complicated. Instead of extra income from investments being a luxury, when (/if) I have kids, it might become a necessity. But then I’d think my investing would become even more risk-averse.

Anyway, the brilliant scientists “found out” that we’re bad at waiting for reward. We all have a little Veruca Salt “Daddy I want it now” in us. Is that so bad?

“…the temptation to buy dotcom stocks in 1999, energy stocks in 2005, real estate in 2006, emerging markets in 2007 or gold right now – what’s hot when it’s hot – is overpowering for many people, no matter how often they’ve been burned before.“

I wonder if Gold will be like dotcom/energy/real estate. Hopefully not, as I’m investing somewhat heavily in the GLD ETF (although not that heavily just because I haven’t really invested much money in my sharebuilder account yet versus my Vanguard Roth.

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Psychology of Overspending: Buying Happiness

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Check out the awesome interview with me over at LuluGal’s HowISaveMoney.net in her weekly “meet the blogger” series!

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Ok, I’ll admit it. I’ve been awful with my finances this last month.

I auditioned for this fashion assistant reality show that will air on CW and, prior to the casting, I used it as an excuse to spend way too much money on new clothes that I mostly didn’t need.

The good news is I returned the things that I’ll likely never wear. I’ve definitely passed my days of fearing going to a store and returning an item. Even though 59% of the time a return ends up equaling another purchase (just keep me away from the mall, ok?) I’ve gotten better about returning without buying something else, or buying something much cheaper to quench my spending arousal without bursting my budget.

Realizing that this need for spending is so deeply routed in my depressed childhood, well, it makes me want to spend a little less.

I think I’ve written about this briefly before, but I’ve been thinking a lot about it lately.

I was such a loner as a kid. I was “cootie girl” / odd girl out. I still am a bit of an oddball, but I’ve found my niche, I think. As a kid, it was unbearable.

All that made me feel good in life were compliments. Some of those compliments I’d earn from drawing a picture or something, but the easiest way I found to earn compliments was to wear something that would get me noticed.

Going to the store to shop was me the kid in a candy store. And my mom let me get pretty much everything I wanted. I didn’t buy super expensive clothes, but at a fairly affordable department store like JcPenny, I could easily spend $500-$700 in one visit. I just bought a lot of things. My mom told me that if something fit I should buy a few pairs and have it in every color it comes in, even if I didn’t like those colors.

Then we got home and my dad, who was making the money, would throw a fit about our spending. I felt guilty about that. It was, partially, my fault. That, I think, was one of the major rifts that formed between my parents early in their marriage. They shouldn’t have been together in the first place, but without that shared understanding about finances, it couldn’t work (yes they’re still married and, no, they shouldn’t be.)

As I grew up, the idea about buying happiness stayed.

I remember in middle school spending hundreds of dollars of my parent’s money to buy my “friends” smallish $10 gifts. My friends was anyone I knew, I really, hoping that if I bought them some cute earrings they might like me a little more. I think maybe they did. I didn’t get nearly the same amount of gifts in return, but then I was so naive and didn’t realize that others at my own school didn’t have the same sort of disposable income that my family did. Besides, people who I knew but weren’t close friends with weren’t going to get me gifts. Still, I liked the surprise they got when I gave them a gift. I thought for a milisecond, maybe they even liked me. And that was worth more than all the money in the world.

Nowadays, my biggest cause of overspending is the infamous “SALE” sign. I love feeling like I got a good bargain, as it gets me off in so many ways. First of all, I got to buy something (score) and secondly I got that something of preferably great quality for a large percentage off. The schadenfreude spot of my brain is laughing to itself and saying, with a Dr. Evil voice and pinky finger to my mouth – “hahahahahah, someone else actually spent $300 on this while I’m getting it for just $100!”

The problem, obviously, is that $100 is a lot of money and after a few items at $100 or $70, it adds up. Maybe not to what I would have spent on the original item at the department store, but I usually end up spending more on sales than when I go to a department store and buy one item at full price.

The only way I keep my spending in control now is by avoiding use of my credit card at all costs. But I’ve gotten to the point in my life where I want to start building my credit history aggressively, and I’m also getting fed up with the crappy rewards that my bank of america debit card offers (keep the change is kind of cute, but I’m not saving much with it.)

So I decided to sign up for some new credit cards.

I FEAR credit cards because I’m terrible at paying bills at times. I always end up with a late fee on a bill of $30 that ends up costing more than the actual bill.

OK, so I’m going to pay these bills on time, once I start using my new credit cards.

I’ve been reading a lot about the Chase Freedom Card and one of the American Express cashback cards (as soon as I remember the name I’ll write it here.) I was reading about them on another frugal bloggers blog (as soon as I remember the name of where I’ll add it here too).

So I never realized how much money I could save just by using a credit card for purchases, especially now that I’m spending quite a bit of money a year. I still can’t put my largest purchase, my rent, on my credit card, but I can start saving by buying gas, clothes, food and other things on a CC. Sweet. I like me some savings.

For those of you interested in figuring out what credit card(s) would be best for you, I recommend checking out the Cash Back Credit Card calculator over at askmrcreditcard.com — it seemes really helpful. I think it’s accurate.

I’ll be writing a more thorough post about credit cards and my cash back rewards in the future… once I actually get the cards, that is.

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Bought a New Verizon Wireless Cell Phone

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It’s funny how the cell phone companies make it seem like you get some extra special deal on buying a new phone every two years. I guess some people like to get replacements of their gadgets every two years, but I tend to hold on to my electronics for longer than that. My iPod? I don’t plan on replacing it for a long time. Heck, if it still works, I’ll use it when I’m 50.

But cell phones… dare I keep one longer than two years? Never. Well, the truth is this time around I actually lost my last phone (about a month ago) and despite being confused as to where on earth I put it, I’m splurging on a new, discounted-with-two-year-contract phone.

My tastes in gadgets (and everything else) tend to go by looks first, features second, quality third. That’s not always the best way to pick out a big-ticket item. Luckily with phones there aren’t that many options… which makes it somewhat easier to shop and decide.

Yesterday I checked out the latest Verizon phones at their Circuit City store and was hoping to fall in love with one that would be free after the rebate and my contract discount. Of course, I fall in love with one that will cost me $129 after the various discounts. Oh bother.

After trying to get my heart set on one of the cheaper phones, I did some research on the different phones and decided I really, really, realllly wanted the $129 one. At least this year I did research, right? Last time I got a Verizon brand phone and despite being black and shiny it was a crappy phone. This time around I’m going for an LG (that supposedly gets good battery life and decent phone quality).

Was I totally stupid to spend $129 on a phone when I could have got one for free (or perhaps even found my old one that’s likely hiding somewhere in my room… or at a friend’s house?)

I can’t wait to get the phone. I ordered it online, so it comes next week.

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I spent ONLY $12.91 at Target.

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Someone, anyone, give me a gold star.

I walked around the entire store as always, even though I went in to buy a notebook, a sponge and tape. I picked up a few items and then forced myself to put them back down as I wandered around. Holding the item is half of the excitement of shopping. I don’t actually have to buy it.

I kept telling myself “no” (in my head, of course) and I made it out of the store with exactly what I had intended to buy (well, I bought a special soap-holding sponge scrubber thing, but I still did a good job.)

A for effort. A- for end result.

Food

Who Needs $90 Wine?

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Apparently the price of wine heavily influences how much people enjoy it. A team of researchers at Stanford and CalTech set out to prove this, and gave testers two glasses of wine to try. One was a “$90” glass of wine, and the other a “$10” glass of wine. What the subjects didn’t know was that these two glasses of wine were actually identical.

“Specifically, the researchers found that with the higher priced wines, more blood and oxygen is sent to a part of the brain called the medial orbitofrontal cortex, whose activity reflects pleasure,” reports CNET.

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Britney Spears, Lindsey Lohan, Paris Hilton, and the Destruction of America

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When I was little, and when I was not so little, all I dreamed about was being a celebrity. It was the end all of success. As a celebrity, you’d be praised for being unique (albeit slightly unique), and everyone would love you.

Fast forward to a reality check… those celebs that find themselves on the covers of the gossip rags often once were the same ones that I’d envy, except their lives and careers had spilled sour.

Poor Britney Spears. She certainly has some kind of mental condition, and it’s obvious that it’s not helped by being smothered by Paparazzi everywhere she goes. Her family (that is, parents and sibling) are apparently not the most stable bunch, but Britney made it big with some spunk and rock hard abs. Could she sing? Well, not really. She could hit the right notes and had a voice that you couldn’t forget, for better or worse. But Britney had what we all wanted… innocence with a serving of sex appeal. Even if we hated her music, we wanted to be Britney… or like Britney. Same goes for Lindsey Lohan. We saw both of these girls when they actually were young and innocent (well, so they’d like us to believe). And then… well, they’ve grown up in the spotlight, and it seems that spotlight was just a bit too bright.

It’s unfortunate, but I think we need celebrities like that to use for public floggings, as otherwise the rest of us minions would think that their lives were perfect because they were rich. Apparently, money doesn’t heal all wounds. Sometimes it’s pouring fuel on an already painful flame.

I feel for Britney and Lindsey. They feel like it’s part of their job and their image to go out and party. To be a young celebrity in Hollywood. Only when drugs enter into the picture, you lose control. I’ve seen friends get eaten up by drugs, and it certainly is just as much a problem in Hollywood… where celebrities have enough money to overdose daily on the most gourmet offerings of the latest designer drug batch.

But who could blame them for needing that rush? If as Americans we hold celebrities on the top of the totem pole of what we wish we could be (which I assume is the case for other people too, since celebrities are still featured on the covers of magazines, and talking about celebrities has made stars of once-Internet-nobodies like Perez Hilton, those GoFugYourself girls, etc) then once you’ve made it to stardom… what’s left? Better party it up when the going’s good.

Not all celebrities turn into psychotic drug addicts, of course, but those that do surely get the most press. Is it good for their careers? If they can make a sober comeback, possibly. Everyone wants to root for the fallen celebrity, despite how much he or she may make fun of this person. If a celebrity truly falls from their divine status and cannot return, then that pops the fantasy of flawed perfection.

Truth is… Britney, Lindsey… they’re just human. Sure they happened to have been born with extra lovely looks, and with some luck and being in the right place at the right time, they guaranteed themselves a future in show business.

It’s funny how easy it is to forget that what they do is their JOB. Sure it’s a pretty awesome job that pays well, but so is being the CEO of your own corporation, or a successful venture capitalist. The job comes with a lot of negatives as well. Privacy? Forget it. You’re working around the clock as a celebrity. From the moment you leave your house to the second you shut the door and close the curtains.

Accepting this changes my extreme, almost obsessive desire to become famous. Or, now I’d like to become famous for writing something brilliant… doing something interesting… but I don’t know if I’d want to be so (un)fortunate to be one of Hollywood’s young actresses. If you’ve got one life to live, there’s not perfect way to live it. If you’re rich, you have nothing to work for. You’ve been raised on attention, so you need to work for the attention. Look at Paris Hilton. She doesn’t need to work, but she does because without work she’d be just like any other NY socialite.

A few months ago I spent some time with my grandmother who lives in Las Vegas. At breakfast one morning, she spent some time complaining about Hollywood today, saying that everyone these days is ugly. I went through a list of celebrities and she said they’re all ugly (except she liked Halle Berry for some reason). Anyway, I know the idea of “beauty” has changed over time, because a lot of these actor and actresses she found ugly happened to be my personal idea of aesthetic perfection. Still, I get her point — beauty is no longer about health and youth exactly. Sometimes people admire the beauty of those who do lots of coke because Kate Moss chic is unbearably still in.

And all of that makes us, the American public, especially the female half of that, spend oodles of money trying to make ourselves look like these people who have lots of money. It’s a vicious cycle of consumerism that is at the heart of America. Capitalism would still exist without celebrity, but what would it look like?

I’m not sure of the answer. In college, I took a class called the “sociology of celebrity” and it was by far the best class in my four years at school. Dissecting celebrity culture, both from the side of the everyman and the celebrity, is understanding America.

I actually read the entire textbook from cover to cover…