People who “shop ’till they drop” and run their credit cards up to the limit often have a shopping addiction. They believe that if they shop they will feel better. Compulsive shopping and spending generally makes a person feel worse. It is similar to other addictive behaviors and has some of the same characteristics as problem drinking (alcoholism), gambling and overeating addictions.
Keeping up with the Jones’ – Psychology plays a big role in our spending habits. Sometime we want to feel as successful or more successful than those around us. We can spend a lot of money to keep up that image. The reality is, the neighbors probably can’t afford that new car either.
Extended Warranties
Generally, they’re not worth the money. The only thing I now have a warranty on is my washing machine and dryer. If a new gadget or appliance is going to fail, research tells us it will do so during the manufacturer’s warranty period or long after the extended warranty has expired. That makes extended warranties, which can cost anywhere from $5 to hundreds of dollars, a big profit center for retailers and a pretty useless expense for consumers.
If you’re worried about a breakdown, take the money you’d spend on a warranty and stash it into a special savings account. If your item fails, you’ll have the money to repair it. If not which is more likely, in three or five years when everything’s gone well, you’ll have stashed away a nice little nest egg.
If you think that having what you want is the path to happiness, you’re partially right, say
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