smart spending

6 spending triggers to outsmart

The 'ripple effect'
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The 'ripple effect'

Sometimes one-time splurges that you budget for create a ripple effect of higher spending." Someone buys a little bit more expensive car," says Greg McGraime, a Certified Financial Planner in Melville, N.Y. "That might not seem like a big deal, but then there (are) all the unanticipated expenses: higher ongoing maintenance costs, insurance premiums."

Sethi calls these "phantom costs." Even something as innocuous as buying more expensive shirts could increase your dry cleaning bill. Instead of fighting it, he suggests automating your bank account so you know where the money is going. When you set up automation, have a percentage of your deposit automatically transferred to your savings accounts, 401(k), Roth IRA and any other accounts.

Also, try to factor in those extras when making a big purchase.


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