If you’re the type of consumer that’s always looking for the best deals you no doubt have seen web services, apps, coupon sites, browser plug-ins and more that will make sure that, before you make a purchase, you always get the best price.
But what about after you make a purchase? What if the price of the product you bought last week drops this week? Sure, if you’re lucky enough to catch that fact you could go back to the store, return the product, and purchase it again at the lower price. Of course that’s a lot of work, time and energy wasted.
Recently however, at the TechCrunch Disrupt conference in New York City, a new service was introduced named Paribus that takes advantage of the low-price policy many retailers already have in place. The best part? It does the checking, and the refunding, automatically.
What the service does, after you sign up, is attach itself to your email accounts and, whenever a receipt is sent to you from a retailer, it scans the receipt and analyzes the content. After that, it starts checking to see if the price of the items you purchased happen to drop in that particular store. It does this for 14 days, which is the typical time frame for getting a refund from a retail establishment for a price drop.
The first drawback that Paribus has is that, as with any service that saves you money, it takes a commission for doing so. Paribus charges 25% of whatever the refund amount is but, frankly, it’s found money and you wouldn’t be getting anything back without the service.
When you consider how most retail stores are pricing these days, using very aggressive, dynamic pricing techniques based on demand and a number of other factors, the service that Paribus offers is more relevant than ever. There’s simply no way that a typical consumer could possibly track all of the price changes on everything that they purchase. Also, applying for a refund takes a considerable amount of time and effort.
When you consider that prices on practically every consumer item being purchased today are changed automatically using algorithms and software, it’s only fair that consumers have a service that uses those same algorithms to get some money back.
There is a 2nd drawback however and, depending on how you feel about online security and identity theft, it’s a big one.
In order to work, Paribus not only needs access to your personal email accounts but also to your credit card number so that, if it finds a difference in price, it can refund your money. If you use it to track your Amazon purchases, it needs to have your Amazon login information also.
Without a doubt that is a lot of trust to put into a web start up company. Luckily, most credit cards, as well as Google and Amazon, have extremely strong anti-fraud and security mechanisms in place.
The most tragic thing about the secret to successful investing is that most people completely overlook it. The secret is simply this; time. If you have money, and plenty of time before you’re going to need it, you can confidently sit through tough times in the market, and even sustained down markets like we’ve had over the last few years.
You can also wait confidently for an upward trend to come back and, while you’re doing it, get some bargain prices on stocks at the same time. In other words, time is definitely on your side. (We believe Mick Jagger would definitely agree.)
The average worker doesn’t take advantage of this time however, especially those in the period of their life when they actually have the longest time between starting work and retiring. A recent study showed that, of consumers between the age of 20 and 29 who have access to employer sponsored retirement plans like a 401(k), less than half actually take advantage of them.
In fact, when it comes to excuses about putting off retirement savings, every single one is fundamentally flawed. Let’s take a look.
Excuse #1: I’m too young to start saving for retirement. Even though a person might have 30 or even 40 years ahead of them before retirement comes around, and might have student loans and other debt that they need to pay off, the fact is that if you can give your money and extra 10, 20 or even 30 years to grow, the difference that it will make in your retirement account is massive. Not only that but saving when you’re younger starts a great habit that will serve you well throughout your life.
Excuse #2:The time is wrong to invest. While this sounds reasonable, especially considering that America is still struggling to recover from its recession, the fact is that there is always going to be a reason to not invest. However, when you look at stocks from companies like Starbucks and General Electric, both of which look like they were in seriously bad shape not too long ago, you can see that this logic is flawed. Even in a recession there are plenty of opportunities to pick up stocks an excellent prices.
Excuse #3: You don’t have enough money to invest to really make it worth it. Most people believe that a small amount of money like $50 a week won’t really do much good but, over 30 or 40 years and with the help of compound interest, that small investment could put an extra $30,000 into your retirement account by the time you’re ready to use it.
Simply put, time is definitely the one factor that can make you truly wealthy and, since it’s also exactly the same for every single person, there’s no reason that you can’t use it to your advantage.
The only thing you have to start doing is start using it today. If you don’t, it ends up working against you in the end.
Unfortunately, human brains aren’t exactly wired to help make us wealthy. At least that’s the opinion that behavioral economists have, thanks to what they say are evolutionary quirks about how humans not only view the world but also make financial decisions. In fact, they say we often do exactly the opposite of what we should do when it comes to money and acquiring wealth.
Luckily there are a number of ways to work around these mental shortcomings that we have and, in some cases, even use them to our advantage. Below our own number of “mental patterns” that tend to make us poorer, and a number of ways that you can overcome them. Enjoy.
Mental Pattern #1: Mental Accounting
Humans tend to treat different sources of money, and different sums of money, differently, depending on the source of that money as well as how it’s used and where it’s saved. For example, have you ever noticed that you tend to spend more money when you use your credit card then when you’re using cash? Mental accounting is at fault here because we see money spent using credit cards as less “real” than cash.
The easiest way to overcome this mental pattern is simply to use cash. You can also set up sub-accounts at your bank, which most banks will allow you to do for free, and then label all of them for a different purpose. If you have one that’s labeled “Caribbean vacation” there’s a much better chance that you won’t dip into it then if it’s just labeled “savings”.
Mental Pattern #2: Hyperbolic Discounting
Humans, unfortunately, are big fans of short-term satisfaction but not so much when it comes to long-term gain. In fact, the further in the future a benefit happens to be, the less we value it. (It’s no wonder many people have trouble saving for retirement.) This hyperbolic discounting means that humans are very shortsighted when it comes to saving for the future.
One way to overcome this mental pattern is to make saving automatic. If money is taken out of your check before you even see it, and deposited into your savings, IRA or 401(k), there’s much less chance that you’ll spend it. Visualizing your goals is also an excellent idea to overcome this problem, including pictures of the place you want to retire or the beautiful home that you like to have some time in the future. This makes your goal much more “real”.
Mental Pattern #3: Loss Aversion
Interestingly, humans hate losing money about two times as much as we love gaining money. If you know someone who doesn’t invest in the stock market because they’re worried about potential losses, you know exactly what we’re talking about.
In order to get around this problem, you need to limit your exposure to the “noise” of the stock market. For example, stop checking your portfolio every day and start checking it once a quarter, or even once a year. The fact is, what’s happening today in the market will have very little bearing on what your investment will look like in 10, 20 or 30 years.
Mental pattern #4: Status Quo Bias
Another unfortunate fact about humans is that we’re rather lazy. In fact, a couple of British researchers described this problem as an ‘exaggerated preference for the status quo’. It means that, rather than taking a proactive course of action, we stick with what we have because it’s easier.
One way around this is to sign up for automatic increases of your 401(k) contributions at work. Some companies do it automatically but some don’t and, if your company doesn’t, you need to get yourself down to human resources at least once a year to make sure and boost it yourself.
Like we said at the beginning of this blog article, our brains aren’t exactly wired to make us wealthy. Hopefully the information we provided you today will enable you to convince your brain to do otherwise.
Everyone makes mistakes and fortunately, most mistakes can be fixed quickly. When it comes to having bad credit it can cost you more than high interest rates. In some cases bad credit can cost you a job. However, mistakes that damage your credit will take much longer to overcome. It is possible to rebuild your credit, but it will take work and a lot of patience. When you are working to rebuild your credit, you are letting future creditors know that you are prepared to handle your financial responsibilities, even though you failed to do so in the past.
Obtain New Credit
It may sound backwards, but the best way to repair your bad credit is to obtain new credit. You need to be able to show creditors that you can handle debt, and this is done by making payments regularly. Companies will be very selective with who they offer credit to. This may make it difficult to get new credit, but there are options available. Some types of credit to consider include secured credit cards, bank loan (from a local bank), gas station credit cards, and credit cards for people with bad credit. When you are taking out a loan from your bank, discuss with them that you are trying to rebuild your credit and let them guide you to the best type of loan to secure.
Improve Your Credit
Once you have a new line of credit, you will need to take time to improve your credit score. This is done by making payments on time with your new credit. It is important that you start small because you will likely have loans and lines of credit with higher interest rates. In addition, make sure whatever line of credit you take actually reports to the credit bureau.
It is important that you completely change your spending habits when you are rebuilding your credit. You are working to show creditors that you are aware of your financial responsibilities and will not spend more than you can afford. You never want to skip a payment, so make sure you have the ability to pay the bill in full by the due date. You can check with your creditor to determine if they allow small frequent payments to ensure the entire bill will be paid off by the due date.
Consider All Your Bills
When it comes to repairing your credit score, every bill you have matters. You want to make sure that you pay everything on time, including medical bills, rent, and school fees. Businesses who are communicating with collection agencies will see what you view as important. You do not want them to think that you do not view something as important just because it is not as vital as utilities or rent. Any debt that goes unpaid will damage your credit report, which causes you to take a step back in your rebuilding process.
As you work to rebuild your credit, you will be making small steps. In essence, you are replacing the bad credit with good credit. This is not something that can be done overnight, but rather with making monthly payments on a new credit card, loan, mortgage, and so forth. Everyone has the ability to improve his or her credit scores; it is just a time-consuming process. However, once you are able to manage your finances and get the ball rolling with lifestyle changes, you will see that repairing credit is easier than many people think.