How to make better (and quicker) decisions

Last week, I wrote about how I've embraced mindful shopping. I'm teaching myself to be more deliberate about the things I own and buy. My goal is to buy less and, more importantly, to own less.

As part of this, I don't want to waste time shopping. I'm trying to train myself to make better decisions more quickly. This is tough for me to do.

By nature, I want to evaluate every alternative, to find the best option in every circumstance. Left to my own devices, I can spend two hours trying to decide which chainsaw is the best chainsaw at the best price.

There's nothing wrong with this, of course. Comparison shopping is a good thing. But there's a fine line. Some comparison can help you avoid purchasing poor products. Too much, on the other hand, becomes a tax on your time and your brainwidth.

I want to find a balance. I no longer feel the need to make a perfect decision. (Is there such a thing?) I'm becoming comfortable with the idea of accepting decisions that are "good enough".

In short, I'm trying to incorporate lessons I've learned from The Paradox of Choice by Barry Schwartz so that I can take some of the suck out of shopping.

The Paradox of Choice

For those unfamiliar, Barry Schwartz is a psychology professor from Swarthmore College. His 2004 book The Paradox of Choice argues that while life without choice is almost unbearable, having too many choices carries burdens of its own.

"I believe that many modern Americans are feeling less and less satisfied even as their freedom of choice expands," Schwartz writes. "Having too many choices produces psychological distress."

This certainly rings true from my own experience. And not just with money decisions.

One of the joys of financial independence is the ability to choose how to spend your time. Indeed, this is a unique luxury. However, it's also a burden. When you have an infinite number of options available, how do you make decisions about what to do with your time? (My answer, as you can probably guess, is to be clear about your purpose, and to make decisions aligned with that purpose.)

Schwartz argues that faced with so many options and decisions, we would be better off if we:

  • Embraced certain voluntary constraints on our choices (instead of rebelling against limits).
  • Opting for "good enough" instead of always seeking the best.
  • Lowering our expectations.
  • Made our decisions non-reversible.
  • Paid less attention to other people.

"A majority of people want more control over the details of their lives," he writes, "but a majority of people also want to simplify their lives." Schwartz calls this the paradox of choice. Greater choices creates greater complexity. That's what we think we want. In reality, most folks crave simplicity -- and simplicity requires fewer choices.

So, how can we confront this paradox? Is it possible to have the best of both worlds? How do we go about wrestling with the ever-increasing array of choices while simultaneously seeking simplicity.

That's precisely what I've been trying to answer for myself lately.

At the end of The Paradox of Choice, Schwartz shares eleven steps that he believes can help mitigate (or eliminate) the distress caused by so much choice. Let's look at four that I've found effective in my own life.

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Mindful shopping: Learning to be deliberate about the things we buy and own

The older I get, the less I want or need. The older I get, the less I like to spend money. And when I have to buy something, I try to practice mindful shopping.

When I was younger, I wanted (and/or needed) all sorts of things. I wanted new clothes. I wanted tech gadgets. I wanted books. I was convinced that I needed a fast computer to be happy, not to mention a big house and lots of furniture. None of my shopping was mindful. It was mindless.

Now, at age fifty, buying things seems more like a hassle than a reward.

For one, buying something means I have to spend money -- money that I'd rather keep for more important things, such as retirement. Or travel. Or beer. (Best of all: Travel and beer!)

J.D. enjoying a beer in Idaho

Plus, there's the entire shopping process. It's a chore. If I need to buy a chainsaw, for instance (which I actually did this week), I have to research the best option. Then I have to find the best price. Then I have to order it or, worse, take time out of my day to go pick it up in person.

Then, after I buy a new thing, I have to store it. I have to dispose of the packaging, then add whatever I bought to my collection of Stuff. It becomes clutter in my life. (This is true whether the thing is actually clutter or not.)

I use my laptop computer all day every day, for instance, yet it still acts as mental (and physical) clutter. It's always here in the living room, sitting next to my recliner. I see it whenever I walk by. It's always on my mind.

I know I sound like an aging curmudgeon, but all of this is true. The older I get, the less Stuff I want -- and the more I want to get rid of the Stuff I already own.

Now, I don't want to pretend that I don't buy things. I do. There's no question that I do. I even spend frivolously if I'm not diligent. But I'm far less likely to buy things than I used to. And when I do buy things, I tend to be purposeful about my purchases. I try to be a mindful shopper.

Let's use the chainsaw as an example.

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The pink tax: The hidden cost of being female

Women working to achieve financial independence face an extra hurdle: the hidden cost of being female.

Though it’s cheekily referred to as the “pink tax”, the additional cost women incur for personal-care products, toys, clothing, dry cleaning, health care, mortgages, and vehicle maintenance is no joking matter. It inflates our budgets, limits our ability to save, and sometimes hinders our ability to access affordable and safe sources of credit.

Based on that semi-intense description of the pink tax, you may think it’s already been made illegal to charge someone more on the basis of their gender. But that’s not true. There’s no federal law prohibiting companies from charging different prices for products that are identical (or very similar), but which are marketed by gender. At least not currently.

Only one U.S. municipality — Miami-Dade County — has banned this practice. California enacted a similar restriction in 1995, but it applies only to the pricing of services. New York City followed in 1998.

On top of the pink tax, women still earn less than their male counterparts. The average woman is paid 82 cents for every $1 her male colleagues earn; the discrepancy is much worse for women of color.

When you’re paying more for basic goods and services from birth until death — just because you’re female — it’s easy to understand why so many women are pushing to “Ax the Pink Tax”.

The Pink Tax: The Hidden Cost of Being Female

What is the Pink Tax?

Twenty-five years ago, in 1994, the State of California studied the issue of gender-based pricing. They found women pay about $1300 more each year for the same services as men. Accounting for inflation, that figure is now closer to $2135 per year.

If that figure doesn’t shock you, maybe this will: By the time a woman turns 29 (like me), she’ll have spent an estimated $39,203 on the pink tax alone! Can you imagine how much money I could have right now if I’d put the money I spent on the pink tax in a savings account? Especially one with compounded interest!?

In 2015, the New York City Department of Consumer Affairs (DCA) published a report on the pink tax entitled “From Cradle to Cane: The Cost of Being a Female Consumer”. The report found that women’s products cost more than men’s products 42 percent of the time. 42 percent! By comparison, men’s products cost more than the female version 18 percent of the time.

According to the DCA report, products for female consumers were likely to cost more across industries:

  • Girls’ toys cost more 55 percent of the time, while boys’ toys cost more 8 percent of the time.
  • Girls’ clothing cost more 26 percent of the time, while boys’ clothing cost more 7 percent of the time.
  • Women’s clothing cost more 40 percent of the time, while men’s clothing cost more 32 percent of the time.
  • Women’s personal-care products (shampoo, conditioner, razors, lotion, deodorant, body wash, and shaving cream) cost more 56 percent of the time, while men’s products cost more 13 percent of the time.
  • Senior home health-care products (supports and braces, canes, compression socks, adult incontinence products, and digestive health products) cost more for women 45 percent of the time and cost more for men 13 percent of the time.

Nowhere is the pink tax more evident than when it comes to personal-care products. Personal-care products geared toward women cost approximately 13 percent more than similar products marketed toward men.

Similarly, women are financially penalized for having their menstrual cycle. The U.S. government has deemed menstrual products a "luxury item" despite the fact that menstrual cycles are a monthly reality for all women, not a “luxury”.

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Christmas on a budget: How to save money on Christmas gifts (and still have fun)

HO HO HO!

Just like that, the holiday season is upon us!

This year, I intend to do most of my Christmas shopping during a three-week tour of Europe with my cousins. We're deliberately visiting as many Christmas markets as possible, so I hope to find a variety of interesting and unusual gifts for my family and friends. (They need to be small, though. I don't have much space to carry things home.)

While I'm buying new (and possibly expensive) gifts this year, that's not normally my style. I'm a fan of keeping Christmas frugal.

Being a frugal shopper doesn't mean you can't give thoughtful gifts though. In fact, my experience has shown that it's often more fun and rewarding to impose limits on gift-giving. These limits breed creativity and inspiration. "Christmas on a budget" doesn't have to mean "Christmas without fun".

This article contains some smart ways to save money on Christmas gifts while celebrating the season. (These tips are great for Christmas, for Hanukkah, for Kwanzaa, for Festivus, or for whatever feast you celebrate this time of year.)

It's an amazing frugal Christmas savings spectacular!

Frugal Christmas

What Kids Really Want for Christmas

I have this idea in my head that kids become mercenaries at Christmas, demanding the newest, most popular toys. I'm not sure how I've arrived at this notion because that's certainly not how my brothers and I were when we were younger. Sure, we wanted cool stuff, but we never made demands.

In fact, Dad used to tell the story of how ashamed he was one Christmas when he and Mom were going through a particularly rough patch. They were always poor and struggling with money, but this year was especially bad. They couldn't afford Christmas presents for us three boys. Rather than cry about it, we went through the toys we already had, wrapped them up, and gave them to each other.

I have only a dim memory of this myself, but Dad used to talk about it often.

This bit of personal family history reminds me of Unplug the Christmas Machine by Jo Robinson and Jean Coppock Staeheli. This book urges readers to escape the commercialism of the holiday season, to make it a "joyful, stress-free" time for the family. In a chapter entitled "The Four Things Children Really Want for Christmas", the authors write:

One concern voiced by most parents is that of shielding their children from the excesses of holiday commercialism. While adults can mute the TV when the ads get annoying, children are defenseless against the onslaught of ads. As early as the age of four or five, they can lose the ability to be delighted by the sights and sounds of Christmas, only to gain a two-month-long obsession with brand-name toys. Suddenly, all they seem to care about is how many presents they will be getting and how many days are left until they unwrap them.

Many parents find it a challenge to create a simple value-centered Christmas in the midst of all the commercial pressure. But the task is made much easier when parents keep in mind the four things that children really want for Christmas.

Robinson and Staeheli argue that children don't really want clothes and toys and games. The four things they actually want are:

  • A relaxed and loving time with the family. Children need attention. During the holidays, normal family routines are temporarily set aside for parties, shopping, and special events. It's important to slow down and spend quality time with your kids.
  • Realistic expectations about gifts. Kids enjoy looking forward to gifts and then having their expectations met. The key is to manage their expectations. You might try, for example, to educate your children about advertising in an attempt to mitigate its effects.
  • An evenly paced holiday season. The modern Christmas season starts months before December 25th, when the first store displays go up, then things end with a bang on Christmas day. The authors suggest beginning the season late in the year. Get out the Christmas music on December 15th, then get the tree on the following weekend. Schedule some low-key family events during Christmas week. Stretch the season to New Years Day.
  • Reliable family traditions. When I talk to my friends about what Christmas was like when we were children, it's not the gifts that we remember. We recall the things we did as a family. I remember sleeping next to the tree every Christmas eve, but never being able to catch Santa in the act. I remember seeing the cousins. I remember decorating the trailer house. Your kids will remember the traditions, not the gifts.

Because I don't have kids, I don't have first-hand experience with their expectations around the holidays. Other folks in the GRS community do, though. A reader named PB, for instance, emailed some similar thoughts. She writes:

We keep our children's expectations realistic by following an old tradition — that Santa fills the stockings and only the stockings — nothing under the tree. This limits the size and quantity of gifts. Plus, because they're all relatively sure what they can and cannot wheedle out of parents for tree presents, their expectations are kept in check.

We buy one new outfit for each, usually a special piece of clothing that they really want, and spent only about $100 per child. I also shop all year long and get some real bargains.

We also emphasize doing a lot of things with our church — food delivery to the elderly, singing at nursing homes, and service to others. Our ongoing tradition is a big Christmas eve dinner with lots of friends and then the midnight service, where we all play an instrument or sing in the choir. This is what the kids talk about — not about what they receive.

It seems that the key to keeping kids happy at Christmas is to manage their expectations. But what about exchanging gifts with other adults?

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Buy it for life: Choosing quality over price

Note: This is a substantial re-write of an article I first published more than twelve years ago. (Yikes, I'm old!) I've opted to keep some of the older comments if they had good suggestions.

Earlier this week, I wrote about my quest for quality pajamas. I recently paid $80 to purchase a pair from Filson, a company I trust for well-made goods. It's my hope that these will be the last pair of pajamas that I ever purchase. My goal was to "buy it for life".

This experience reminded me of two other companies that I love for their top-notch stuff.

  • The first is a company called Best Made, which aims to make and sell "the finest, most beautiful and useful products made by any company anywhere". And they do. Best Made offers an esoteric collection of clothing and household items, all of which offer quality reminiscent of your grandmother's era. The catch? The quality comes at a higher cost.
  • Or there's the Portland-based Schoolhouse company (formerly Schoolhouse Electric), which makes and sells a variety of lighting, hardware, and furniture for the home. I've purchased a few things from Schoolhouse over the years, and I've been blown away by the quality. The items were expensive up front and I was hesitant to purchase them, but my reservations have vanished with time and usage. The blanket covering my feet at this very moment, for example, cost $250 (I think) but will last the rest of my life.

Here's something I've learned over the past fifteen years: One way to practice financial prudence while living the good life is to buy quality products, products that are a pleasure to use, products that will last a lifetime (or at least a decade).

Today, let's talk a little about choosing quality over price. Let's talk about the "buy it for life" philosophy.

Buy It for Life

How to Find the Good Stuff

The first challenge is to figure out how to find the good stuff. When you're ready to make a purchase, how can you know which items are quality and which are run of the mill?

Sometimes you'll know which company offers a high-quality version of whatever it is you need to buy, either from personal experience or from paying attention to friends and family. Or, if you don't know off the top of your head, you know whom to ask for more information. If I wanted to buy audio gear, for instance, I'd ask my brother. He's an audiophile and could steer me in the right direction.

Most of the time, however, you'll have to do some research.

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Are you a shopaholic? How to fight a shopping addiction

Yesterday, I mentioned that because I grew up poor, I inherited a faulty money blueprint from my parents. They didn't know how to handle money effectively, so they couldn't teach me how to handle it effectively. I entered adulthood with many of the same bad habits they'd had when I was a kid.

I was a compulsive spender, for instance. I had a shopping addiction. I had no willpower, no impulse control. Even when I had no money in the bank, I still found ways to spend. I took on over $20,000 in credit card debt before I turned 25!

How to Fight a Shopping Addiction

Nowadays, I mostly have my spending under control. I'm no longer in debt, and I force myself to make conscious decisions about what I purchase. (Conscious spending is one of the keys to overcoming emotional spending.)

Having said that, I know that if I relax for even a moment, I'll be right back in my old habits. I'll find myself at the grocery store buying magazines to soothe a bruised ego, or shopping for music in the iTunes store because I had a stressful day.

How do I know I'll relapse if I'm not careful? Because I do from time to time. When I was prepping for my big talk at the end of June, for example, I felt super stressed and my shopping addiction kicked in. I spent an afternoon browsing on Amazon, putting things in my shopping basket. (I even ordered a few of the things, although I knew I shouldn't.)

Emotional spending is comforting -- not just for me, but for a lot of other people too. Though I'm a recovering spendaholic, I'm still a spendaholic. I'm always one step away from compulsive spending.

My story is not unique.

What Is a Shopping Addiction?

People who have a shopping addiction suffer from what's known as "compulsive spending". According to the Illinois Institute for Addiction Recovery:

"Compulsive shopping and spending is described as a pattern of chronic, repetitive purchasing that becomes difficult to stop and ultimately results in harmful consequences. It is defined as an impulse control disorder and has features similar to other addictive disorders without involving the use of an intoxicating drug."

The organization offers the following list of warning signs of a shopping addiction:

  • Shopping of spending money as a result of being disappointed, angry or scared.
  • Shopping/spending habits causing emotional distress or chaos in one's life.
  • Having arguments with others regarding shopping or spending habits.
  • Feeling lost without credit cards.
  • Buying items on credit that would not be bought with cash.
  • Spending money causes a rush of euphoria and anxiety at the same time.
  • Spending or shopping feels like a reckless or forbidden act.
  • Feeling guilty, ashamed, embarrassed or confused after shopping or spending money. Many purchases are never used.
  • Lying to others about what was bought or how much money was spent.
  • Thinking excessively about money.
  • Spending a lot of time juggling accounts and bills to accommodate spending.

I've experienced all of these. In fact, I used to suffer from many of these at the same time. It felt awful. An addiction to spending is a scary, dangerous thing. As with other addictions, victims feel lost and out of control.

People who have never suffered from a shopping addiction can't understand the problem, and you may have a hard time explaining it to them. They don't know what it's like to see something and feel the urge to buy it now. They don't know the lure of the shopping "rush" -- and the subsequent nausea from the guilt have having spent too much.

"Overspenders...have confused and confusing relationships with money," write psychologists Brad and Ted Klontz in Mind Over Money. "On one hand, they're convinced that money and the things it can buy will make them happy; yet they're often broke because they can't control their spending."

Fortunately, I've learned some ways to cope with emotional spending. Though I'm still tempted, I don't spend nearly as much as I used to because I've developed habits that help me do the right thing, even when the right thing is difficult.

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Shaquille O’Neal once spent $1,000,000 in a single day

Think you've made some poor financial decisions before? Have you ever spent one million dollars in a single day? That's what former NBA star Shaquille O'Neal did -- before becoming a pro basketball player.

I go buy a $150,000 car. No negotiations. I don't know nothing about negotiations. The guy could have told me $200,000 and I would have bought it. I go and get a black Mercedes because that's what I always wanted: a black Mercedes and some nice wheels.

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How much do you spend on fireworks?

A few weeks ago, I received a flyer from a fireworks store that made me shake my head. "Spend $400 in one purchase and earn 40% off for the rest of the season," it read.

"What a bargain," I thought as I flung it toward the recycling bin. I mean, does anyone really spend $400 at the fireworks store?

Then I remembered that, yes, many people do. Not only are most of my neighbors fireworks fanatics, but dozens of people I know do it every year, including people in my own family.

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What can I do with the gift cards I don’t want?

Chances are, you'll get at least one gift card for Christmas, Hanukkah, or Kwanzaa this year -- whether you like it or not. If you are lucky, your card might be something you could use right away -- like an Amazon gift card or one for your favorite store. But you might not be that lucky. You might end up with a gift card to a store or restaurant you unquestionably dislike. Even worse, you might get an inexpensive gift card to a place where nothing is cheap -- like a $10 gift card to a restaurant where entrees start at $19. Those are the worst.

Fortunately, there are a few ways to get the most out of the gift cards you receive, whether it involves trading them, selling them, or maximizing their benefits.

 

Here are some gift card strategies everyone can use:

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How many wedding gifts should you buy?

Earlier this week, I wrote about the problem with trying to buy the perfect gift. Sticking with that gift theme, there's a question that's been on my mind: If you're invited to an engagement party, a bridal shower, and a wedding ceremony all for the same couple, and you attend all three, do you give a gift at each event?

See, I've been invited to a few weddings this year. And it seems like the etiquette "experts" all agree that each event requires a separate gift, according to tradition. Here are some examples from around the web:

"If I bring a gift to the bridal shower, should I still bring a gift to the wedding?" a question Peggy Post, co-author of the 18th edition of Emily Post's Etiquette is accustomed to answering. Her advice is, basically, that a shower gift is not a wedding gift. "I know some of these shower gifts are expensive, but be smart so you don't have to break the bank."

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