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Monday, August 29th, 2011

New Research: Improve Your Finances by Avoiding Decision Fatigue

New research published recently in the New York Times provides a fascinating look at how our brains work when required to make important decisions. The findings could have serious implications for people trying to avoid debt, rebuild after bankruptcy, or stick to a budget.

What Is Decision Fatigue?

Decision fatigue is exactly what it sounds like: a phenomenon that occurs when a person has made too many choices. Intriguingly:

  • Each decision a person makes requires energy.
  • We all have limits to our mental energy, but we may not realize we’re approaching those limits.
  • As we make decisions throughout the day, our mental energy is depleted. It can be restored with rest and food.
  • Poor people are reportedly more susceptible to decision fatigue than rich people because those with less money generally have to put more energy into each purchasing decision they make. Having fewer resources means that every spending choice has higher stakes.
  • Decision fatigue can lead to impulse buying, overextending yourself on credit and otherwise making the sort of purchases you wouldn’t if you had your full mental reserves available.

We’re wired to deal with decision fatigue in two ways: by acting impulsively or by making no decision at all. Clearly, either of those options can have serious side effects, especially if debt is on the line.

How Can I Fight Decision Fatigue?

We have to make so many decisions each day, we may not realize we’re making them: what to wear, what to eat for breakfast, what to pack for lunch, which lane to drive in, where to park – and that’s before getting to work.

Researchers have found that there are some key ways to fight decision fatigue and maximize your effectiveness throughout the day:

  • Plan ahead: Set out your clothes, pack your lunch and decide on breakfast before bed. In the morning, you can breeze through without stressing about minor things.
  • Schedule major decisions: If you know you have to make important decisions (e.g. buy a car or lead a big meeting at work), plan ahead. Make sure to get enough rest beforehand and to approach the decision with a full stomach.
  • Space major decisions: While it may seem productive to schedule major decisions or projects close together, you’ll probably serve yourself better by giving your brain a break between them.
  • Have a snack on hand: One encouraging finding of the decision fatigue research was that there is a simple way to fight back: eat something. The rush of glucose to the blood and brain we get from eating can help rejuvenate our energy and make decisions a little less overwhelming.

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Tuesday, September 21st, 2010

Save Money on Your Car: Avoid these Scams

While owning a car is an indispensable part of many people’s lives (and often the main mode of transit to and from work), maintaining a car can put a real dent in the monthly budget. And, if you aren’t especially vehicle-savvy, you may run a further risk of being taken in by car-related scams.

A recent post from Bargaineering.com offers some insight on some of the worst and costliest car scams out there, which we all need to avoid, especially if we’re recovering from a bankruptcy filing. Here’s a summary.

Know What Your Car Needs…and Doesn’t Need

  • The engine shampoo: This service, which some unscrupulous mechanics have been known to offer, involves cleaning the outside of your engine. Admittedly, car engines get very dirty, what with all the work they do to keep your car moving. But, as those in the know realize, cleaning the engine doesn’t have a real impact on your car’s performance. What it does affect is your wallet – this scam can set you back a couple hundred dollars. A much better use for that money would be toward paying down debt.
  • The engine flush: This service does for the inside of the engine what the shampoo does for the outside. In some cases, this may be necessary (you’ll know you need a flush if you notice buildup under the oil cap). But, unless you’ve had your car for a while and have seen the oil cap buildup, opt out of the flushing service. If you have some money to spare, think about using it to start a savings (savings page) account.
  • Fuel injector cleaning: Again, unless your car has more than 100,000 miles on it, an offer to clean your fuel injectors is likely to be a waste of your money.
  • Gas saving gadgets: These have been blasted by Consumer Reports as money wasters. If you’re looking to spend less on gas, try driving within the speed limit, keeping the proper air pressure in your tires, braking gradually, losing extra weight in your vehicle and otherwise making sure your car is in good shape. If you’re really pinched for cash, try carpooling or switching to a bike a few times a week.

Car-Buying Scams

In addition to these maintenance scams, there have been reports of online scams targeting people interested in buying cars for a good price. One notorious scam claims to be selling repossessed cars for steep discounts. Know the warning signs:

  • A seller asks you to wire money.
  • A seller asks you to pay a significant portion of the price before you ever see the car.
  • The price seems too good to be true.

Cutting costs is essential to establishing financial health after a bankruptcy filing, but sometimes you need to pay more in order to get a reliable product.

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Wednesday, May 27th, 2009

Thrifty Tips Now Hip as Recession Lingers

In some aspects, it could be considered a great time for folks who are filing bankruptcy: with the economy in the worst recession in recent memory, it’s suddenly cool to be thrifty .

Here’s a look at some traditional post-bankruptcy wisdom that’s seeing new life in the down economy.

Post-Bankruptcy Move #1: Cut back on spending
The fresh financial start bankruptcy can offer is great, but it only really works if you’re able to maintain your debt-free status.

Those recently out of bankruptcy have always been encouraged to shop with detailed lists (and stick to them!), switch to generic brands, carpool, buy secondhand clothes and the like to save money.

Recession Twist: Swap, barter or share to get stuff free (or cheaper).
These days, it seems everybody is looking to cut costs. It’s no wonder, then, that sites like Meetup.com, Swaptree.com and Paperbackswap.com are springing up to help bargain-minded Americans trade their old stuff and save.

And some especially resourceful individuals are chipping in for costly items and sharing them.

Post-Bankruptcy Move #2: Design and stick to a budget
As you get your finances back in order, it’s important to have a plan for where your money needs to go each month. And, while the word budget may have been a "dirty" word once upon a time, these days it’s a must-have.

Recession Twist: Look outside your comfort zone for terrific deals.
Maybe you don’t have money to travel like you used to (and “staycations” are so 2008), but summer on a budget doesn’t have to mean three months of boredom.

Check out events that you might not normally consider attending: movie nights at the local library, amateur music at outdoor parks, even special deals on hotels in your area.

Bargains are everywhere (one benefit of a recession) – take advantage of the price cuts businesses are offering to stretch your budget to its limits.

Post-Bankruptcy Move #3: Develop savings strategies
A savings cushion could mean the difference between swimming and sinking when a financial disaster hits. In your post-bankruptcy life, it’s crucial to make regular, consistent savings a key part of your cash management.

Recession Twist: Get the whole family involved.
As a nation, we’re saving significantly more money now than we did a year ago (nearly five percent of income in ’09 compared to almost nothing in 2008). Take this opportunity to teach your kids about the importance of savings – help them start bank accounts, savings jars, piggy banks, etc.

And make savings an important part of your family’s life – set goals for yourselves (vacation, pizza night) and work together to reach them.

Bottom Line: Make the Most of It

The recession’s got plenty of negative features, but you don’t have to dwell on them. Take advantage of all the benefits it can offer you!

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Tuesday, January 27th, 2009

10 Hot Tips to Save Cold-Hard Cash

In today’s economy, we all need to save money when we have the opportunity to do so.

While it’s not always easy, there are ways you can spend less and use your savings to pay down debts and grow your savings and retirement accounts.

Here are some pain-free money-saving tips that can really help gather the green in your wallet.

1) Make a shopping list and vow to stick to it. By sticking to your list, you can avoid impulse buys.

2) Use draft dodgers at doorways and apply weather-stripping and caulk around windows to keep heating and cooling costs under control.

3) Slow down on the Internet. Most people don't need the fastest (and priciest) Internet connections. You may be able to save a few dollars a month by bumping the speed down a notch - and you'll probably never notice a difference.

4) Visit your local library. Rather than buying paperbacks and magazines, utilize the library for your literary needs (and you can often rent movies for free from there too!)

5) Clip grocery coupons and shop on double-coupon days. These pennies off can really add up.

6) Eliminate your landline phones. Ditch this service and save $30 - $50 a month.

7) Unplug electronics when not in use. Even when you're not using your gadgets, they're still using energy that you pay for - so unplug them to save up to $256 a year.

8) Share a ride, bike or walk. (Are you noticing that some of these ideas will not only save you money, but are good for the environment as well?)

9) Negotiate rates with your cable company. The Wall Street Journal recently reported that some companies will offer to cut your bill to keep you as a customer.

10) Change your light bulbs. According to the EPA, if every household in the U.S. replaced a single traditional light bulb with a compact fluorescent one, it would result in a collective $600 million annual savings on utility bills.

Are You Living A Budget-Conscious Life But Still Having a Hard Time Making Ends Meet?

If you've tried everything to try to save money and repay your debt, filing bankruptcy may be a debt-relief option for you.

Check out our bankruptcy information portal Bankruptcy 101 and talk to a bankruptcy lawyer today about your options.

We'll connect you--for free and with no obligation--to a bankruptcy lawyer in your area.

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