It is very easy to lose money on a daily basis without realising what exactly is going on. This has been nailed so well, that we give our money willingly, without a second thought.
Sadly, in the process of flushing our hard earned money down the toilet, we are made to feel like we are in control, that we are getting a good deal, that whatever we are buying is worth it – etc…..
This is how we get conned and lose money:
- 0% Interest – Buy Now Pay Later
No one goes into business to make a loss and every company has to make a profit in order to survive. The lure of 0% interest is to get you to buy something, you wouldnt ordinarily spend on were you to pay cash. This is a common trick employed by catalogues. If you compare prices, the items in catalogues are usually sold at generally 10-20% more than if your were purchase the same item outright from another retailer. The ease of purchase versus the pain of having to shop around is a no brainer choice especially if it is an item you feel you want but may not necessarily have the cash for it right now.
- Pay Nothing for 12 Months
Why would someone let you take something for 12 months without paying for it? The risk of defaulting is very high, and someone has to bear this cost. Guess who does?
- Cash Back
We all like to get cash back, and actually feel rewarded for shopping. This is a good thing if you are smart with your money, as it is an extra something. But then again this cash back has to be funded from somewhere. Usually there is a condition in the small print or the determent to getting a better deal from elsewhere.
- Maslow’s Hierachy of Needs
The diagram says it all.
If you are wise to these common pitfalls you are less likely to lose money by falling into these financial traps and more likely to keep a good handle on your finances!
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