Oct 062016
 

16-10-spend-less-with-inexpensive-hobbies

Why It’s So Easy to Overspend

We are all tempted by instant gratification to some extent. And thanks to poorly implemented public policies it’s now easier than ever to live beyond our means. When we run out of savings, we can simply use credit to continue buying what we want. At least that’s what I usually do. 😉

Once upon a time people had to work almost constantly to prepare, track, hunt, build, forage, and gather resources so they would have enough food to survive the winter. But now the average American only works 34 hours per week, according to the OECD. That’s 20% of their available time. In other words, people spend 134 hours each week sleeping, eating, and doing leisurely activities that don’t involve getting paid for labour. That’s a lot of time to kill.

We have so much free time on our hands we often have trouble deciding what to do with it. Businesses use this opportunity to target our wallets, which leads us to buy things we don’t really need.

The Advantage of Distraction

In order to prevent impulse purchases we simply need to distract ourselves and do something else with our time and attention. 🙂 The best way to do this is to find free or cheap hobbies that can take up a lot of time. For example, if we are already preoccupied with reading the latest Harry Potter book, then we are less likely to think about shopping. To put it another way, we spend money when we’re bored or have nothing better to do. This is why many workaholics tend to be frugal. They’re so busy with work, they literally don’t have the time to enjoy all the money they’re making, lol.

I recently came across this Reddit thread about affordable hobbies that anyone can do. I will share the top activities mentioned in the thread and add some of my own ideas. We sometimes overspend because we don’t have the willpower to walk away from something we want. But hobbies such as the ones below can distract us so we won’t even get the chance to think about shopping in the first place, and therefore, save money. 🙂

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Jun 202014
 

All Money Comes from Debt

All the money in your bank account right now was created from debt in one form or another.

philosoraptor.money_The government creates money by issuing debt (bonds.) It then pays this money to public service employees, and the money eventually gets spent into the economy. The money from private sector jobs comes from debt as well. Small businesses often go into debt (business loans or re-mortgaged homes) to start up a company so they can pay their workers. More established companies pay their employees with revenue from selling products or services 🙂 But in order to have sales in the first place, they need customers. And most consumers spend money by either using debt (credit cards, and other consumer debt) or by using cash from their wages, which as explained earlier, eventually leads back to a source of more debt because of those business loans. When people sell their homes, usually most of the money would be paid by using debt called a mortgage. So everything in the financial world revolves around this four letter word.

 

Whenever people get a loan from a bank, such as a mortgage, the overall money supply in the country grows, which translates into more economic growth. But that also means more people will be in debt. Even central banks acknowledge this to be true.

whenever a bank makes a loan, it creates a deposit in the borrower’s bank account, thereby creating new money.

~Bank of England

That “deposit,” is just a digital balance that appears in one’s bank account. It can be withdrawn as cash and spent. But the debt will remain until the money is paid back. We can’t introduce new money into the economy without also creating the same amount of debt. Similarly every time someone pays back a loan, money is destroyed along with that debt.

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Jun 132013
 

A midtown Manhattan restaurant called Sushi Yasuda no longer accepts tips. They claim this gives the dining experience a more authentic and relaxed feeling to mimic restaurants in Japan. Customers can enjoy their food and don’t have to do math and calculations at the end of the their meal. Instead of gratuity, the co-owner explains that they have increased the price of the items on their menu by 15%, essentially building the cost into the food which allows them to pay their waitstaff a higher salary than other restaurants do. panda_restaurant_spoof_when_food_bill_comes_expensive_surprised, tips

When patrons receive their final bill, it reads near the bottom “Following the custom in Japan, Sushi Yasuda’s service staff are fully compensated by their salary. Therefore gratuities are not accepted.” The waitstaff gets paid a salary from day one and even receive a generous benefits package including vacation and paid sick days, which is apparently pretty rare in the food services industry 😀 Reducing the reliance on tips to provide the employees with a living wage is common practice not just in Japan, but in other parts of the world as well. However would restaurants lose business if they add a price premium to their food? The final amount that the customer pays shouldn’t change but maybe it’s a psychological thing. I’ve never worked in a restaurant before so if I were a waiter I’m not sure if I would prefer this compensation method or the traditional North American way of tipping. I’ve heard that in Europe they round up to the nearest Euro. I think every culture is different 🙂

Here are what some people on the internet had to say about the story:

“Concerning compensation in Japan, serving is considered respectable employment and deserving of fair compensation. The issue is not with the tipping, but with the social attitudes around the service industry in North America.” 

“As a former server I applaud this. If the service sector were uniformly unionized, all servers would have this kind of stability.”

“What if the service sucks? I like having the choice to pay more for attentive waiters and less for a poor service.”

“This is how every restaurant in NZ is…I love it! It frees up waiters to attend to ANY table – not just the ones in their section”

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Random Useless Fact: According to some studies, boys on average are more expensive to raise than girls.

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