Money psychology exposes consumer psychology that we don't realize. Let's talk about why we earn more and spend more?

"Now although you earn more than before, but the cost is actually more, it feels like i didn't save any money." M suddenly felt.

According to M's current position in the company, it is about a small executive level. While higher salaries and better quality of life, consumption is higher than before. Those from time to time should be paid ah, guestah ah, dress ah and so on activities, so that M feel as if they have not saved more money.

Why is that? Why do we earn more and spend more?

Earn more and spend more, the original is the "ratchet effect" caused by the scourge?

Economist James Stemble Duesenberry has proposed the "ratchet effect" and argues that people's consumption habits are "irreversible". In other words, there is no way for people to live a "quality retreat". If your financial situation is already the most expensive meal in a restaurant, will you only choose from a low-cost meal? In the case of increased spending power, if the average person has the opportunity to experience a higher quality of life, it is difficult to go back to the past simple days.

According to James Stemble Duesenberry, people's spending decisions are mostly dependent on habits, which are influenced by many levels, including lifestyle patterns, values, social trends, family and peer influences. Especially when the highest income of an individual to develop the concept of money, the biggest impact on consumption habits.

Jasmine, the heroine of the film Blue Jasmine, is an example of the effects of the ratchet effect. Even if no longer rich, Jasmine still can not say goodbye to the past luxurious and expensive way of life, live to live the best, eat to eat the most expensive. And the ratchet effect, can also be used by the ancient Sma Guang a famous words to say: from thrift into luxury, from luxury into thrift.

Therefore, people can not live a later life, it becomes the more we earn but spend the main reason.

Why do we obviously have budget constraints and we are prone to overspending?

The reason why many people spend so much is actually related to always "exceeding the budget". The concept of "psychological account" is mentioned in the book "Psychological Psychology", co-authored by Dan Ariely, a professor of psychology and behavioral economics at Duke University, and Jeff Kreisler.

Psychological accounts were first worrisomed by Nobel Prize-winning economist Richard. Richard Thaler, the chief executive. Richard. Even if it's the same amount of money, people automatically classify it, distribute it into different categories and items, and subjectively think that certain categories are worth the money, says Mr. Seller. And this classification itself is no problem, the problem is that people are very good at moving between accounts and accounts, cheating themselves did not exceed the budget.

For example, A has set himself:

  • Entertainment account $5,000
  • Cost of living account $7,000
  • Transportation account $3,000
  • Rent account $10,000

By the end of the month, A found that he was running out of money in his entertainment account, but there had been a number of parties and dinner slots lately, so A decided to include the cost of dinner before the end of the month in the cost-of-living account instead of the entertainment account to convince himself that "the cost of entertainment is not over budget."

But in fact, A still spends more than 5,000 more on entertainment. The conversion of psychological accounts, people do not find that they have overspent, resulting in clearbudget constraints, still more and more money situation occurred.

Pictures . . . . . . . . .

As long as it's human, there's a mistake in thinking.

Monetary psychology reveals consumer psychology that we don't realize. Even if most people may think of themselves as "rational consumers" who don't spend money, monetary psychology can still make us discover that we may have fallen into thinking, but don't know.

However, it is highly normal for the brain to think wrongly, so let's be aware of every consumption behavior we have at this point, because consumption is not only related to personal baggage, but also related to social trends. There is demand, someone buys, and someone makes things. Remember that every choice we make, every consumption, is affecting the world, and it's determining the future.

To understand money, you start by knowing yourself, and to know yourself, from psychology.

If you want to see more money psychology: