When it comes to money management, a majority of people don’t live up to the level required for becoming rational and logical thinkers. Some decisions are taken with the flow and, often, leave people wondering about what they were thinking at that moment.
Money is certainly capable of playing tricks with the human brain. Most monetary decisions, made by individuals, are based on several psychological factors and do not take rational and logical thinking into consideration.
With the ever-increasing percentage of dependency on the psychological factors for making financial decisions, it becomes important to understand the money traps that are actually based on human emotions. Luckily, in today’s world, there are entirely different fields like behavioural economics that are fully dedicated to how and why humans behave in different ways when it comes to money.
And this brings the good news that the researchers have been able to pinpoint some ways in which humans tend to outsmart their brains when taking money related decisions. People simply need to understand these typical, psychological-financial traps and alter the manner in which they take purchasing or investing decisions.
This is perhaps one of the most common traps that the buyers fall prey to. They tend to compare the price tags of two or more comparable things and end up purchasing the one with the lower price tag.
In some cases, buyers are likely to make the price of the item they actually want to purchase as the base price for comparison. In others, they just stick to the first quote of the product they come across in both the online as well as the physical market as the comparison price.
One thing that should be kept in mind in such a scenario is that no matter how cheap an item is priced, it doesn’t necessarily make it of a better quality. It is the quality that requires comparison instead of prices to make a non-regrettable decision at the end.
What is free might not be good for your pocket
The word ‘free’ has something magical about it. It gives birth to an irresistible feeling