Not Made of Money

Save. Spend. Earn. Live.

You are here: Home

The Problem of Having Too Much Choice

By

The following is a sponsored post. Please see my disclosure statement.

We are enticed by choice, but more choices don’t always improve our decision-making process or lead to better decisions. In fact, we tend to make bad decisions and often end up with buyer’s remorse, while others struggle with the very act of deciding.

Nowadays, investors are spoiled for choice, but does this benefit us? We love having more options, but research shows that too much choice can result in analysis paralysis (which prevents people from making decisions), poor decisions and buyer’s remorse.

What is Analysis Paralysis?

Deciding between different options takes time and energy. Some people will delay or avoid making decisions when faced with too many options. Important purchases require us to consider all options carefully, but we rarely find the time to do so. A delayed decision when investing could result in a loss of capital, yield or returns.

Poor decisions

Too many options can compromise decision quality. More choice can overwhelm us, which may result in snap judgments instead of rational decisions. A key factor influencing your investment returns is asset allocation. Investors tend to make poor asset allocation decisions when faced with the large number of funds they have to choose from. This could have huge consequences down the line.

Studies have shown that investors ended up choosing funds they perceived to be simpler, when faced with a large number of options: Investors opted for fixed interest or money market asset classes over equity, regardless of the risk profile or time horizon.

“Why did I buy this?”

More options make us more insecure about our decisions. We believe there is always something better on the market and blame ourselves for making the wrong choice. The probability of regretting your decision tends to increase with the number options you start with, even if your initial choice was the best.

Investor’s with buyer’s remorse can end up switching, which can result in huge losses. Switching can be free and easy (if you’re invested through an investment platform), but the long-term effect on value may lead to losses.

Judging an investment on current performance may result in buying high and selling low, which can lead to a wide performance gap. You will need to stay invested long enough to reap the benefits of a particular manager’s investment approach. By switching you may find that your investment doesn’t perform as well as the fund it is invested in.

In the end, moderation and understanding your investment environment is key. Keeping up to date with investment news and any big economic changes worldwide can provide you with the information to make sound decisions. Too much choice is overwhelming and too little choice restricts us. We may love having choices, but more is not necessarily better.

Home Organizing On a Budget

By Leave a Comment

An organized home is a beautiful sight. Nothing is as reassuring as the ability to find anything in your house within a few moments because everything has its own place. It’s just much easier to relax in a well-organized home.

Of course, the first step to getting organized is to get rid of any unnecessary clutter. But what do you do with the stuff you’re left with after you’ve purged your home of its extraneous contents? You can’t get rid of everything, so now you’ve got to deal with everything that’s left.

Getting organized is easy when you have plenty of containers and systems to hold your stuff. The problem is that all of those pretty containers can be expensive. You could easily spend way more than is reasonable to find ways to organize things like craft supplies, paperwork, or even toiletry items.

The good news, though, is that you don’t have to spend a ton to get organized. Instead, use items that you already have around the house to create your own storage devices. Look at the disposable storage containers you purchase every time you purchase your favorite groceries or toiletries. With a little creativity (and some time spent cleaning the containers up) you can have all the tools you need to keep your home tidy and enjoyable.

Try a few of these ideas:

Glass jars from grocery items – These make great containers to collect everything from bits of ribbons to hair ties. As an added bonus, the clarity of the jar makes it easy to know exactly what’s in each jar.

Shoeboxes – Shoe boxes are the perfect size to hold tons of things. I like to keep scrapbooking supplies in them because they are big enough to lie may paper goods flat. You can even turn shoeboxes into “pretty storage” by wrapping them in wrapping paper.

Tissue boxes – These are the perfect way to keep those empty plastic bags from floating all over your kitchen. Simply stuff the bags into a tissue box. You can, then, pull them out one at a time as you need them.

Plastic containers for cold cuts – If you scrub these out really well, they are perfect for holding your makeup and medications. They stack nicely under the sink and can even be packed in suitcases when you travel.

Diaper Boxes – You know those big boxes of diaper packs? Once you’ve used up all the diapers, they are perfect for storing winter clothing or children’s toys. Use self-adhesive contact paper to dress them up.

Learn to evaluate items for multi-purpose use. With a bit of creativity you can have the best of both worlds – an organized home without the high price.

Tips To Maximize Your Savings When Buying in Bulk

By Leave a Comment

The popularity of warehouse stores like Sam’s Club and Costco encourage people to reap the rewards of shopping in bulk. These stores tout cheaper prices for the average consumer who chooses to become a member of their warehouse club. But do you know how to maximize your savings?

Buying items in bulk quantities has its benefits, but it has its hazards, as well. Too often consumers are tempted by the vastness of the warehouse stores to purchase things they don’t really need. Also some items aren’t really priced at bargain prices but simply are available. Getting all of the benefits of shopping in bulk quantities requires that the consumer do his homework and make the purchases that will realize actual savings.

Only buy products you actually use

Sometimes when you’re shopping in a wholesale club it’s easy to become enamored with the abundance of products available at discounted prices. However, if the product goes to waste in your closet or pantry, then it wasn’t a bargain, no matter what you paid for it.

Don’t buy more than you can use before the product will spoil

Paper goods are great items to buy in bulk. They store forever (provided you have adequate space) and never go bad. You have to be a little more cautious when purchasing food stuffs, though. If you purchase fifty pounds of hamburger but have to throw out the last ten pounds your purchase wasn’t quite cost-effective.

Be familiar with the prices of products you use

Not everything available at a wholesale club is a bargain. If you know how your favorite products are usually priced at your local grocery store, you’ll be able to determine which products really are a good buy.

Share the wealth of your shopping proceeds

To help get your money’s worth out of your wholesale club membership, you can share your shopping bargains with friends or family. This alternative helps eliminate the worry about buying more than you can use in a short amount of time. You can share the cost of bulk items with friends or family and then split up the large, bulk purchases for single families.

Buying product in bulk quantities can lead to a large savings for you and your family. You just need to be savvy about which things you purchase.

Budget Friendly Graduation Gift Ideas

By Leave a Comment

Graduating from high school or college are monumental occasions that should be celebrated by family and friends. If you have a loved one who is about to reach one of these milestone moments, you are absolutely right to want to commemorate the occasion with a special gift. Aside from wedding gifts, graduation presents are the types of things that young adults will remember forever.  Choosing a special graduation gift may tempt you to spend more than you normally allot for family gifts. Who wants to be the one family member who gave a cheap gift? Budgetary concerns don’t have to be an issue, however, if you take the time to choose a gift that will carry meaning for you and the graduate. Here are a few graduation gift ideas to get you started:

Family Heirlooms

If you’ve been saving a special family piece for an appropriate occasion, graduation just might be the right one. Examples might be a pair of earrings or a tie tack. Graduation gifts often mark the rite of passage that the graduate has just experienced by giving them a gift that shows that you recognize their personal maturity.

Household Tool Box

Since graduates are often about to set up house in their first apartments, they are certain to appreciate the thought of this gift. Think back to your first apartment and the tools that you wished you had. This tool box should include a hammer, an adjustable wrench, a couple of screwdrivers, a tape measure, and a level. Choose a container for your gift that suits the graduate. A guy might appreciate a sturdy, steel toolbox. A young lady might prefer a bright-colored plastic box.

A Gift that Reflects the Graduates Tastes

Gifts that show you know what types of things interest the graduate are always great gifts. If your graduate just got his degree in journalism, he might appreciate a copy of a famous journalist’s biography. The artist in your family will love tickets to an upcoming art exhibit. Think about the types of things the graduate talked about last time you saw him and try to correspond your gift with that topic.

Ultimately, finding an appropriate graduation gift just requires that you spend more time than money. Think about your graduate’s likes, his future plans, and your family traditions and you’re sure to find the perfect gift.

Inexpensive Father’s Day Gift Ideas

By Leave a Comment

Note:  This post contains affiliate links.  I will receive compensation if you make a purchase by clicking through links.  Please see my disclosure statement.  Everyone knows that Dad deserves a special day to say thanks for all of the loving things he does for his family everyday. But, after working so hard to improve your finances, you don’t want to get too carried away purchasing a Father’s Day gift and ruin all of your hard work. Fortunately, there are plenty of things you can do to show your appreciation for Dad on a budget and don’t forget that a homemade gift is always a budget friendly option. Here are some inexpensive Father’s Day gift ideas:

Shop Amazon – Give the Gift of Amazon Prime

Give Dad a day or two without chores

You can take out the trash, mow the lawn, and perform a myriad of other little chores that he usually takes care of. He’ll be thrilled to have an afternoon to spend on his projects instead of looking after the mundane little tasks that seem to eat up the weekend. I usually give Mr. Not Made of Money a large block of time (2 to 3 hours) where he can just read the paper and relax. (I know that seems like such a simple thing but when you have 4 children clamoring for your attention you really don’t get to read the Sunday paper from front to back. If you are a parent you know what I am talking about :))

Treat Dad to a baseball game

You can sit in the “cheap seats” to save money. It won’t matter; you’ll still have a great time. Baseball games are a fun way to spend an afternoon or evening for the whole family.

Spend the day outdoors doing something Dad enjoys

If he likes hiking, he’ll love sharing his favorite trail with the family. If he’s a fisherman, spend the day at his favorite fishing hole. He’ll get to share his hobby with the people he loves most and spend a little extra time on his hobby, too.

Relinquish control of the television for twenty-four hours

Dads with little kids often give up their television rights so their kids can watch shows like Dora, Mickey Mouse, or Phineas and Ferb. Imagine how much he’ll enjoy an entire day that he can spend watching whatever his heart desires. Take care to keep your promise as the day continues.

New photos of the family make great Father’s Day presents

You can purchase inexpensive, but attractive desk frames at your local discount shop. Then, just pop in the new pictures and wrap them up. Now, even when he’s at work, Dad can remember why he’s working so hard. We’ve also made a slideshow of our pictures for Mr. Not Made of Money’s computer.

Does Dad like a particular type or series of book?

If he is into the novels by Jim Butcher, you can purchase the latest book in the series. If you aren’t sure what book to get him, write down the titles of two or three of his favorite books and ask the folks at your local bookstore’s information desk to make a recommendation. You may want to couple this gift with the “day without chores.” Now Dad will have ample time to read his new book.

Send A Gift If You Can’t Be Together

Cards are always appreciated, but Dad deserves more on a special day like this. Look through the daily deals and coupon sites to save money on sending a gift. Places like Shari’s Berries are always running promotions for holidays like Father’s Day.