ICFE eNEWS #10-04 - January 28th 2010
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The ICFE's dedication statement is to help people improve their spending Practices,
increase their savings accumulation rate, and use credit more wisely.

Understanding Why We Spend What We Spend

by Syble Solomon

We spend hours shopping every year and hours more paying bills, but we rarely take time to step back and consider what we spend money on. Rarer still are people who take some time to think about why they are spending the way they are. On one hand, it's surprising that people don't make even a minimal effort to understand their spending habits because doing so can pay huge dividends for the short- and long-term. On the other hand, it's not that surprising because money is one of those taboo topics that people would rather not talk about - even with a trusted partner. Such conversations are often tedious, contentious, embarrassing or generally stressful in some way. As a result, the status quo prevails with our spending habits and we don't make the progress we want, whether it's cutting out that $3 daily coffee or setting aside enough money to buy a house.

If paying just a little bit more attention to our habits and attitudes might be the key to spending and saving better, how can we get people to really look at how they relate to money?

Obviously, the approach must be easy to use and understand. And, we'd want something that engages people, inspires conversation and leads to valuable insights - but minimizes the disagreements inherent in discussing money.

Money Habitudes is a fun, non-threatening educational card game that was created to address this dilemma. Money Habitudes is endorsed by the ICFE. It provides people with an easy tool that generates healthy conversations about their habits and attitudes (habitudes) related to money. The cards help people understand their money habitudes and what motivates the way they manage - or mismanage - their money.

Once people understand their own money habits and attitudes, they begin to see why they spend the way they do. Perhaps it is to feel secure, to present a positive image, or to feel good by giving to others. Whatever the challenge, the cards help identify the individual's patterns of spending, saving, giving and investing and what motivates those patterns.

Conversely, using Money Habitudes can help people key in on times when they should actually be spending more money. While this may seem counterintuitive when it comes to better money management, the reality is that sometimes it's better to buy something of quality rather than simply the cheapest thing, which often breaks and must then be replaced with a better, costlier item. The goal isn't necessarily to always spend less, but to spend smarter and with better balance.

Why we spend the way we do should also lead one to consider when we spend on certain things. Are there certain times or situations in which we make spending choices we later regret? If you go shopping with your spouse, do you watch every penny - but then pick up purchases you don't need when shopping with a friend? Do you feel a stressful time calls for a night on the town or a pint of ice cream? Do you love the rush of sales and find yourself wrapped up in the excitement of getting a deal? Is it dangerous for you to leave the house just after you get your paycheck?

Simply having someone figure out what they spend money on typically won't uncover such why and when factors, which are just as important, if not more so. Once you present the whole picture regarding people's spending habits, it's much easier for them to see what's really going on, make meaningful changes and achieve their financial goals. Money Habitudes cards help explain the why and when behind spending. Armed with that knowledge, people will be better able to implement a budget and stick with it.

Syble Solomon, the creator of Money Habitudes', is a recognized expert on the psychology of money. Among other accolades, she has been named Educator of the Year by the Association for Financial Counseling and Planning Education.

To learn more or order cards visit MoneyHabitudes.com or call 888.833.4331.

Enter the code: ICFE on the checkout page to get a special 10% discount on your order until 2/1/10.

About the ICFE:

The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation).  The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely. 
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.

The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org).  CASDRAP disbanded in 2010, shortly after the web site project was completed.  In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.

The ICFE is also an on-line help for consumers who spend too much.  ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.

Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org.  Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G,  a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.

 
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