How You Spend Your Money Is Wrong

Spending money is great and I think everything should be able to get to a point where they can do it without feeling guilty. But there is a problem with overspending, which causes most people to end up broke. In this video, I'll go through some behavioral research to show you what's behind these issues as well as some solutions to help prevent this problem. Check Out My Recommendations (It helps support the channel): Check Out My Recommendations (It helps support the channel): 🔥 M1 FINANCE Investing- Free $10 (once you deposit at least $100 within 30 days) https://bit.ly/427KBBn 📚 Here's a video on how to use M1 Finance https://youtu.be/kEOS-w21U3c 📝 NewRetirement - The retirement planning tool I personally use to make sure I'm on track with saving for retirement. It's perfect for "Do it yourself" investors https://bit.ly/3EAAhrJ 🔒 AURA - 14 day free trial to see if your personal information has been leaked online and have it removed https://aura.com/jarrad 📝 Empower - Free Net Worth Tracker https://bit.ly/3NUNtwq 📧 Business Inquiries: JarradMorrowYT@gmail.com The Diderot Effect is a concept in consumer psychology that describes the tendency of acquiring new possessions to trigger a spiral of consumption that leads to a person's identity and overall lifestyle being defined by those possessions. It is named after the French philosopher Denis Diderot, who first described this phenomenon in an essay titled "Regrets on Parting with My Old Dressing Gown." The essay recounts how Diderot received a new dressing gown as a gift, which initially made him feel happy and content. However, once he started using the new gown, he realized that it made his old possessions, such as his chair and writing desk, seem shabby and outdated by comparison. This led him to replace his other possessions with newer, more expensive ones, in an effort to maintain the same level of aesthetic and material quality as his new dressing gown. The Diderot Effect can manifest in various ways in modern consumer culture. For example, buying a new car may lead to buying more expensive accessories or upgrading other aspects of one's lifestyle, such as clothing or housing, to match the perceived status associated with the new car. Similarly, purchasing a high-end smartphone may lead to upgrading other gadgets or tech accessories to complement the new device. Overall, the Diderot Effect serves as a reminder of how our possessions and material objects can shape our identities and behaviors in significant ways, often leading to a never-ending cycle of consumption and acquisition. Supplemental costs refer to the additional expenses that consumers incur beyond the initial purchase price of a product or service. These costs can be associated with various aspects of the product or service, such as maintenance, repairs, upgrades, and accessories. For example, when buying a car, the supplemental costs could include fuel, insurance, registration fees, maintenance and repairs, and upgrades such as custom wheels or a sound system. In some cases, businesses may intentionally offer products or services at a lower initial cost, with the expectation that customers will incur supplemental costs over time. For example, a printer may be sold at a low price, but the replacement ink cartridges may be expensive, resulting in ongoing supplemental costs for the consumer. "The Exception Is The Rule" is a paper published in the Journal of Consumer Research that explores how exceptions to normal behavior can actually reinforce and strengthen the behavior itself. The authors use examples from different domains, such as dieting, gambling, and binge-watching television, to illustrate how indulging in occasional exceptions to a desired behavior can actually make it harder to break the behavior in the long term. The paper argues that the concept of "exceptions" plays a significant role in shaping our behavior and decision-making, as people often justify exceptions to their goals or commitments by telling themselves that it is just a one-time occurrence. However, the authors suggest that this approach can lead to a slippery slope where exceptions become the norm, and the original goal is no longer achievable. Overall, "The Exception Is The Rule" highlights the importance of understanding the role of exceptions in shaping our behavior and decision-making, and suggests strategies for overcoming the negative effects of exceptions on our long-term goals. Affiliate Disclaimer: Some of the above may be affiliate links. Support the channel by signing up or purchasing through those links at no additional cost to you. I appreciate you for helping me keep this channel running. Disclaimer: This video is for entertainment purposes only. Everyone's situation is different so do your own research before making any decisions with your money.