We kind of run out of metal energy for making decisions and
we may actually find that the decisions we're making aren't the best.
So when you have decision fatigue,
you may make some spending choices that aren't really in your favor and
that you wouldn't have made if you had really kind of been at your best moment.
So we want to be careful about this,
because we don't want to end up making impulse purchases that we didn't want.
So think about this when you're going out and you're doing any kind of big shopping,
especially.
So for example, lets say, you went out and you were shopping for a car and
there's a lot of decisions to make when you're shopping for a car.
You have to think about what kind of car do you want?
What style?
What color?
What kind of mileage do you want?
All these different choices.
You might think you have all those decisions made.
But when you get out there and you're making the purchase,
odds are you're going to be offered more choices, like do you want the package A or
do you want package B, or do you want package C?
And it can be exhausting, because you're making all of these different decisions
dealing with a fair amount of money and it can lead you to say, fine.
You know what?
I didn't know that I wanted leather seats.
But now that I'm tired, leather seats is sounding really good.
So yes, let's go ahead and get the leather seats.
So be aware of that when you're making large decisions,
especially about decision fatigue.
It also can lead to sort of default options.
Watch out for this.
At least in the US, a lot of our different plans that we've signed up for
come with a lot of defaults.
So you may again, for example, go down to buy a cellphone and
you may think you know exactly what you want, but then there's all these options.
And without maybe, they'll just say, well,
this plan just comes with all these options.
Maybe you didn't need all that.
Maybe you didn't need all that cost.
So, think about it before you sign up for those things.
The other thing that we really need to be aware of when we're looking at barriers
for saving is how much of our money is being locked up into debt and
what kind of interest are having to pay on that debt?
Because when you're having to pay large amounts of debt pack and
you have those interest cost on top of that, it can really stop you from having
money available to work towards your saving goals.
So in this example, we're looking at making a purchase of a car again and
the only real difference here is the interest rate.
For one purchase, the interest rate is at over 9%.
And in the other one, it's 24%.
Those might sound high in today's interest world, but
actually this can be that expensive, depending on somebody's credit ratings.
So looking at that, what you'll see is that at the end of four years,
the cost was significantly different for the two different plans.
Over $3000 difference in interest costs.
So when you're making decisions to go make a purchase use debt,
pay attention to interest rates and think about the fact that
the money you're putting toward interest can't be going toward savings.
There's an opportunity cost there that you need to be aware of.
So, these are the things that can kind of stop you from getting to your savings
goal and being aware of them in your mind might help you avoid these barriers.