MONEY Budgeting

5 Dumb Ways You’re Wasting Money Without Realizing It

Andre Thijssen—Getty Images

Unless you're in a witness protection program, it's worth it to sign up for loyalty programs from merchants you frequent.

Even if you’re rich, wasting money is criminally stupid. Sit down for a minute and think of all the things you could do with the money you waste that would otherwise make life better for someone else. If that doesn’t grab you, then think of what you could do with the money that would make life better for your own future self. Oh, yes, lovely and young as you are today, you are going to have a future self who might very well wish he or she had more money in the bank.

If even that isn’t enough to make you reconsider your ways, think of how hard you worked to earn that money (trust fund babies may leave the room now), and then picture yourself doing that work for free because what you’re essentially doing is throwing hours’ or weeks’ worth of salary right into the trash. Really. Picture yourself putting cash money into a trash bag, and watching it being driven off down the street in a garbage truck. Insane, right?

However, you may not realize how much money you re actually wasting. Here’s five signs you need to curb your spending before you send more cash to the dump:

1. You Buy New Stuff Just Because It’s New

You’re the guy in line at 2 a.m. on the day the new iPhone is being released. But guess what? There’s always going to be a new iPhone coming out. And a fancy new fill-in-the-blank. Commerce is what makes the world go ’round. If companies stopped creating new versions of things to sell, they’d go out of business. However, it doesn’t mean you have to buy into the super-hype and rush to get everything the minute it hits the shelf.

It’s not just electronics. The new car smell is still hanging in the air and you’re at the dealership again looking at next year’s models? Cars depreciate 11% the minute you drive them off the lot, and lose 19% of their value in the first year. You don’t get your money’s worth out of a car until you’ve driven for a while.

2. You Sale Shop for Things You Don’t Need

It’s Black Friday, Cyber Monday, Super Saturday, or Free Shipping Day, and you’re right out there among the rest of them. Fighting your way through the crowds — real or virtual — to get your hands on stuff you never knew you wanted. You hate to miss one of your local department or computer store’s special sales (nearly every weekend), and you never pass up two-for-one coupons for things you don’t even need one of. “But look how much I’m saving!” you say. But look how much you’re saving if you keep your wallet in your pocket.

What’s that you say? You only shop at discount stores, dollar stores, and places with Barn, Depot or Warehouse in their names? Look how much I’m saving! Yep, you’re saving what it would have cost if you’d bought the same things at high-end establishments. But if you don’t need them, then you’re not saving a cent no matter what you paid for them. Plus you’ve got to figure out where to put everything when you get it home. You want to wind up living like someone on Hoarders?

3. You Pay Fees to Use a Credit Card or Checking Account

You’re handing over money to a credit card company so that you can pay interest on the money you owe them? What a deal! There are a few exceptions when the program rewards will more than pay the fee, but generally, paying an annual credit card fee is dumb. There are plenty of credit cards with no annual fee. Get one.

The same applies to having accounts at a bank that charges a monthly checking account fee or a fee to visit a teller instead of an ATM. Do some research and find a bank that will accommodate you with no fees for a minimum deposit you can live with.

4. You Don’t Use Loyalty Cards at the Stores You Shop at Regularly

Rail as you might at the insidiousness of grocery and other stores that extract personal information from you and track your purchases in exchange for giving you discounts, if you regularly shop at a store that offers special pricing to customers in its loyalty program and you don’t take advantage of it, you’re over-spending at that store by 20% or more every time you shop there. Unless you’re in a witness protection program, it’s absolutely worth the savings to give your local supermarket your address and phone number and let them keep tabs on the brand of butter you buy.

5. You Eat Out More Often Than You Eat at Home

If your breakfast comes in a Styrofoam container, your lunch is delivered in a plastic box, and you’re choosing dinner from a menu, you’re spending way more than you have to. You can’t help it if you’re on the road, but otherwise, you can eat as well or better at home for a lot less money, even if you barely cook at all. Tax and tip alone add about 25% to the price you’d pay if you bought the food yourself and just nuked it. If you actually know how to cook, there’s sort of no excuse.

Read next: How Do I Set a Budget I Can Stick To?

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MONEY financial advice

The 2 Biggest Money Mistakes

70% of Americans are prone to one or the other. Here's how to correct them.

Imagine coming to America as a young adult with a few hundred dollars in your pocket and, by the time you’re 34, selling your company to a Fortune 500 company for over $100 million.

How do you think you would feel? Ecstatic, jubilant, ready to reward yourself?

The answer for me was none of the above. My wife and I discussed celebrating by taking a multi-month vacation in Greece with our young daughters. Sadly, I was too afraid about the future to spoil myself and our family. The next few years I tracked our net worth regularly and watched our spending like a hawk. I was not behaving the way I would tell any of my friends to act in a similar situation.

I’ve spent my entire career helping people understand their financial lives, and helping them to make smarter choices. I have learned over time that people’s relationship with money is deeply personal. In our internal financial lives we each have a “protector” and a “pleasure seeker” battling it out and one usually wins out. Because of this, we find ourselves repeatedly making the same financial mistakes. Rather than simply learning a lesson and moving on, we keep repeating the same mistakes until we learn to regulate both perspectives.

According to our own research, 70% of people in the U.S. approach money from a place of abundance (pleasure seeker) or one of scarcity (protector). That has some big implications when it comes to making financial choices, and ultimately how we end up living our entire lives. So let’s discuss the two biggest mistakes, their consequences, and what you can do about it:

1. Spending money too casually: The pleasure seeker

It’s easy to spend money and it’s hard to save it, because spending provides instant gratification and saving is a deferred reward. Many people would rather have the certainty of feeling good now than the possibility of feeling good later. The early warning signs of this pattern are high credit balances on your credit cards, low savings for retirement, and inadequate saving for your kid’s education or your rainy-day fund. More subtle but important markers are whether you avoid looking at your credit card bills, or if you don’t have a net worth summary that you update at least twice a year. We all have pleasure seekers inside us, but perhaps you are allowing this trait to overwhelm your need to save and protect.

2. Spending money too carefully: The protector

This might seem like a very strange bad habit. But despite what you might pick up from the media, a large portion of society uses money for security and doesn’t enjoy success enough. These protectors feel so good seeing their net worth increase that they would rather defer any spending for as long as possible. This might maximize their net worth but lead to an under-optimized life. The following are early warning signs: updating and reviewing your net worth summary all the time, feeling guilty after shopping, and seldom feeling like you can spoil yourself. While we all need money to keep us safe from bad outcomes, some folks let their protector take too dominant a role.

As in all things, balance is the key to a stable and healthy relationship with money. That often comes with time and experience, but first you need to be aware that the choices you make are harming you. Here’s a three-step plan to taking control of your bad money habits, whichever camp you fall into:

  • Step 1: Identify if you have a bad habit that has to change. How often do you regret your financial choices? If you feel trapped by money rather than in control of it, it might be time to acknowledge you have to change something.
  • Step 2: Identify whether you are primarily a pleasure seeker or a protector. No doubt you have largely justified why you act the way you do. But if you have not learned how to control your inner pleasure seeker or protector then you will keep repeating a pattern that is hurting you financially.
  • Step 3: Take action. The easiest way to get rid of a bad habit is to replace it with a good one.

After determining if you are a pleasure seeker or a protector, here’s what to do next.

If you spend too casually:

  • Review your net worth. Take all your assets and then subtract all your debt. Create a simple way to update this regularly. Set realistic goals of how much you would like to have in savings five, 10 and 15 years from now. Create a specific list of what those savings would provide you. Take pictures, link articles or write down specifics in order to make what you’re saving for tangible and rewarding.
  • Establish a realistic monthly budget that takes into account your habits but establishes a monthly amount to deferred responsibilities like building an emergency fund or amassing a down payment on a house. Match the savings to your targets for those longer-term goals.
  • Do something that forces you to think about what you are giving up every time you are about to spend money. Some folks wrap a rubber band or a piece of bright tape around their credit cards. Some wear a reminder wristband. Do something that will remind you every time you are about to spend that you are taking away from your long-term savings and what your savings will get you. This habit of thinking about the consequence of what you are spending will train your protector to become more dominant.

If you are too careful with spending:

  • Establish your priorities. You no doubt have a very good understanding of your net worth, but have you clearly articulated what you are saving the money for? If you had free rein to spend all your money over the coming 12 months, guilt free, what would you choose to do? Create a list of things you buy that bring you the most joy: vacations, dinners out, a nice car, new shoes—whatever makes you feel good.
  • Establish a reasonable budget for guilt-free spending that doesn’t compromise your longer-term goals. Have an annual number to spend for some of the things that bring you joy. Rewarding yourself in the here and now matters a lot and relieves some of the pressure you place on building your net worth.
  • Limit yourself to reviewing your net worth on a pre-set schedule. For most people, four times a year is more than enough. Also, create a simple reminder on your phone every week to see what you did with your “spoiling budget.” And once you’ve spent the money, take time to think about, and appreciate, what you got. Do not focus on what you spent!

Life is short. I have seen people struggle financially in their later years and have to be supported by their children. I have also seen parents sacrifice their entire lives to build a comfortable nest egg, only to watch their kids spend the money buying the things the parents never bought themselves. The good news is that learning from past experiences can start right now. Thanks to my mistake a decade ago, I take every opportunity to spend time with my family, max out my vacation time, and relish our time together. I’m not sure I would have gotten there without the lessons of the past.


Joe Duran, CFA, is CEO and founder of United Capital. He believes that the only way to improve people’s lives is to design a disciplined process that offers investors a true understanding about how the choices they make affect their financial lives. Duran is a three-time author; his latest book is The Money Code: Improve Your Entire Financial Life Right Now.

MONEY Budgeting

12 Things You Wish You’d Never Bought

MAIKA 777—Getty Images

Among readers' biggest regrets: a $1500 plane ticket, designer shoes and 6 months rent at a coworking space.

Some big purchases leave you feeling elated: that new car, or the couch you’ve been saving up for. But what about when that splurge turns into a mistake you wish you could immediately take back? We asked DailyWorth readers to tell us about their most regrettable purchases. And oh, did they spill.

1. “I regret spending $1,500 on a plane ticket to meet my then-boyfriend in Southeast Asia on the last leg of a backpacking summer trip. I thought we were going to spend two weeks catching up, being in love, and exploring a new country together. But instead, I found out halfway through our vacation that he had been cheating on me the whole time he was away. The rest of the trip was spent feeling like a fool, hiding out from him, and being completely livid about the whole situation. We broke up on the plane ride home.”
—Lulu, 40

2. “I once purchased a gorgeous $500 white silk jumpsuit because I thought it made me look like Beyoncé. In truth, it kind of did. But I consequently learned that even looking like Beyoncé wasn’t worth the $500 plus tax I had dropped. I felt so ill spending that amount of money on something as singular as a jumpsuit (as opposed to, say, a winter coat), that I couldn’t even enjoy it. I returned it the next day much to the perplexity of the sales associates who said the jumpsuit was clearly made for me. Or Beyoncé.”
—Lydia, 28

3. “I was living in London and saw a carpet beetle, which is harmless and very common — it’s like a moth. But it sort of vaguely looks like a bed bug. So I spent six hours Googling bed bugs, and then had a complete breakdown in front of my roommates. I ended up paying £150 to an exterminator to tell me I didn’t have bed bugs. It was crazy embarrassing, and my roommates still tease me about it to this day.”
—Hannah, 42

4. “Throughout college, I spent a ridiculous amount of time researching, purchasing, and reselling designer bags. I got my first job when I was 18 and, for some reason, thought blowing every paycheck on expensive stuff was a good idea. I ended up dropping around $700 on a Louis Vuitton Speedy. I was never happy with the bag itself and I ended up selling it a few weeks later. Whenever I think about that particular purchase, I cringe.”
—Aimee, 28

5. “Private college. I was 17 and stupid and had no concept of the fact that I’d be paying for my visual arts degree forever. Lest you think I’ve wised up: I’m heading to another private university for a graduate degree. Help.”
—Julia, 26

Read next: 8 Retail Loyalty Programs With Big Rewards

6. “Small impulse buys, like clothes that are made of synthetic fibers and are cheaply made — all of which add up to an absurd amount of money that I don’t want to think about.”
—Hailey, 24

7. “I went to Paris for two weeks when I graduated college. I really wanted to splurge on a French fashion item, thinking it would be a special memento from my trip, and who knew the next time I’d be in Paris, and I’m an adult now so I should dress fancy (and every other reason or excuse possible). Well, I spent $400 on a pair of shoes that I never wore. Even now, in my thirties, I’d never spend that much on shoes. I can’t believe I spent that when I was younger (and poorer) — I could have used that money for a weekend trip to the French countryside, or French opera tickets, or an amazing meal, or a hotel upgrade … or, you know, just saved it. Such a waste.”
—Vera, 39

8. “A $90 book on Aristotle to impress my friends. An expensive collection of DVDs by director Pierre Perrault that I haven’t watched and accidentally scratched. They haunt me.”
—Eric, 35

9. “I impulsively purchased a $500 leather jacket in the middle of June. I haven’t been able to wear it because it’s been consistently 90 degrees. Go figure.”
—Caroline, 23

10. “Anything I ever bought because I wanted to make myself feel better about something else. You know what will never, ever lift a bad mood? Trying on jeans. I’ve learned that lesson the hard way many times. Just go home and do a kickboxing workout until the endorphins are flowing. You save money AND you get to uppercut your frustration away.”
—Katie, 32

11. “When I first moved to New York, I joined a co-working space. I paid for, like, six months and maybe went twice. I kept thinking I’d go and be so productive and make connections. But, predictably, that didn’t happen.”
—Camilla, 35

12. “I spent well over $2,000 on an Yves Saint Laurent jacket when I was 20. I was living in New York City for a summer and wanted something to commemorate the experience. That jacket is still hanging in the back of my closet, too expensive for me to wear in public and too sentimental to be sold.”
—Stephen, 29

Read next: Rich People’s Biggest Money Regrets

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MONEY Spending

Why You Should Spend More Money in Retirement

illustration of senior couple taking money out of purse
Jason Schneider

Money worries can make you unnecessarily frugal. Here's how to overcome them.

You’ve saved up money your whole career. So in retirement, don’t deny yourself the pleasure of spending it.

Not a problem, you think? Actually, it can be. In 2014, 28% of people 65 and older with at least $100,000 in savings pulled less than 1% from their accounts, reports the research firm Hearts & Wallets. That’s well below the 4% that many financial planners say is safe.

Misgivings about spending play a big role, says Hearts & Wallets partner Laura Varas. In focus groups, retirees described big spenders their age as irresponsible and expressed shame about their own spending. And as people age, they tend to get more emotional about complex money decisions, says Christopher Browning, a financial planning professor at Texas Tech University: “No one gives you instructions on how to turn your savings into income. It can be a paralyzing process.”

First determine if a shortage of money is the problem rather than an inability to spend. The tool at can help you figure out whether you indeed have enough funds for a good retirement. Then, if it’s worry that’s stifling your spending, try these steps to put yourself at ease.

Make Your Own Pension

Living off a steady income stream, not portfolio withdrawals, can boost your confidence about spending. A Towers Watson survey found that retirees relying on pension or rental income are less anxious than those who live off investments. Don’t have a pension and don’t want to be a landlord? You can create regular income by buying an immediate fixed annuity. A 65-year-old man who puts $100,000 into one today, for example, would collect about $500 a month for a lifetime.

Add up your monthly fixed costs, such as a mortgage and health insurance. If that amount exceeds your Social Security and any other guaranteed income, fill that gap with an annuity. (Get quotes at Granted, if you’re hesitant to spend money, you may be hesitant to lock up funds in an annuity. If so, annuitize a fraction of your money and add more once you’re more comfortable with the idea.

Bucket Your Money

Should you not want to tie up any money in an annuity, you can get comfortable about spending by dividing your portfolio into accounts for different needs. Browning suggests sorting your savings into three buckets. One provides income for everyday expenses over the next few years, the second is for fun pursuits, and the third is for future needs: day-to-day living, emergencies, and bequests.

Put the first two buckets in secure and liquid investments: money-market accounts, CDs, or high-quality bonds. The bucket for later years can have stock holdings for greater long-term growth.

Once that’s done, you can start collecting income—a paycheck for retirement. Set up a regular transfer from a money-market account that’s in your first bucket—enough to cover, with Social Security, monthly bills and usual expenses. Then relax and enjoy.

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MONEY Spending

When It’s Okay to Splurge on Yourself

Dave and Les Jacobs/Kolostock—Getty Images

"It's a shame to work so hard all the best years of your life, just so you can afford to survive in the worst years of your life."

When Stan Calow was growing up, frugality was a way of life: “You spend as little as you need to, and then save everything else.” So, the 58-year-old engineer and U.S. Army veteran from Kansas City, Missouri always hated spending money.

It took his financial planner, Cindy Richey, to drill the point into him that it was actually okay to enjoy his savings once in a while.

After much prodding, the message finally got through. Calow and his wife just returned from a trip to France, touring the chateaux of the Loire Valley, just like they had always dreamed.

Says Calow, who learned about the fragility of life by serving in Kosovo: “I wanted to live life while I’m still young enough to enjoy it.”

It’s a tricky dilemma for many of us. As much as pundits tell us to scrimp, and save, and sacrifice for the future, when is it actually okay to spend a little on yourself and enjoy this life that passes all too quickly?

Indeed, according to a new survey, many of us are not enjoying it enough.

When Wells Fargo asked affluent Americans about what they regretted most about their finances, 15% said “not having enjoyed their money more”.

It is an honest answer that you do not often encounter in financial surveys. After all, splurging on yourself is typically seen as selfish and gauche.

But as some planners point out, it’s your money, and you should not be made to feel bad about enjoying it occasionally.

“People are so nervous about outliving their money, and sometimes they shoot too far in their saving,” says Joe Nadreau, director of innovation and strategy for Wells Fargo Advisors. “You don’t want to come to the end with $3 million saved, but having sacrificed your whole life along the way.”

Of course, leaving an inheritance is still an important consideration, according to 57% of affluent Americans in the Wells Fargo survey.

But just remember that once the will is read, you are six feet under, and no longer around to witness your family enjoy that wealth.

A Bank of Memories

So try thinking of the concept of ‘inheritance’ a little differently: Instead of purely in terms of dollar bills, consider it as a set of memories, which you can create together as a family while you are still alive.

“We have recently noticed a sizable uptick in clients who are more interested in sharing their wealth in the form of experiential gifts,” says John Fowler, a planner in Keller, Texas.

“It might mean taking the entire family on a cruise, or paying the airfare to fly in to see grandma and grandpa in Arizona, Colorado, or Florida. At the end of the day our clients realize stuff is just stuff, but with a little effort, they can create a memory for their families that will last a lifetime.”

Keep in mind that splurging on yourself doesn’t mean you become miserly with others. It is not an either/or proposition; You can treat yourself once in a while, and also be generous with charitable causes that are meaningful to you.

“People call me all the time to get permission to enjoy their money, which I heartily give them,” says Dave Ramsey, a popular radio host and author of “The Legacy Journey.”

“Often the thing that breaks it loose for people is to increase their giving. Because the more generous you are, the more you get permission to spend on yourselves.”

As for Kansas City’s Stan Calow, he looks forward to traveling the world with his wife, and enjoying future grandchildren. It was hard to get him to enjoy those savings, but now he’s making up for lost time.

This thought, in particular, came to mind when he was walking the streets of Paris recently:

“It’s a shame to work so hard all the best years of your life, just so you can afford to survive in the worst years of your life.”

Read next: When It’s Okay to Splurge on Yourself

MONEY Spending

9 Times to Demand a Refund

Jeffrey Coolidge—Getty Images

Get ready to stand your ground.

When you spend your hard-earned money on a product or service, you expect a certain level of quality — and when that quality falls short of expectations, it’s not unreasonable to think you’re entitled to a refund. But not every situation qualifies. So when should you stand your ground for your money back, and when should cut your losses? Take a look at these nine times you should demand a refund — ever so politely, of course.

1. Departure Taxes on an Unused Flight

I once booked a European vacation around the holidays that was supposed to stop in London, Dublin, and Paris, but the last leg of the trip was cancelled due to “weather conditions” according to the evil discount airline that shall remain nameless. The airline offered to fly my friends and I to Rome as penance — which was a nice offer in theory, except we couldn’t fly on the dates they suggested — so my flight was essentially a loss since the airline wasn’t responsible for acts of God, which, in this case, was fog. I was young and dumb and just accepted the decision.

Maybe that wouldn’t have happened if I were friendly with Kyle Stewart, travel editor at UPGRD, at the time. He experienced a similar situation, but walked away a little less broke than I did.

“We had found a very cheap flight to and from London, but once we were abroad we had to make a change and book an alternative separate flight home,” he says about his one-time travel plans. “Our tickets were non-refundable, but it is unlawful for the carrier to keep revenue they collect for ‘taxes’ if you do not actually fly the route. The U.K. has a steep departure tax of nearly $250 each on flights leaving the United Kingdom. Because we did not fly those routes but had paid for the taxes, even on a non-refundable ticket we were able to get the departure tax refunded which nearly paid for our alternative transportation home.”

2. Anything Unsanitary or Unsavory in Your Food

There are a lot of gross things I can deal with — my friends would love to tell you the story about the time I ate an ancient corn chip off the carpet in high school for a dollar — but as I’ve evolved out of being an idiot, hair or other yuck in my food isn’t one of them. It’s hard enough to eat out these days just thinking about the various “things” in my food that I can’t see, so you better believe if there’s visible, physical evidence of my gag reflex, I’d like my money back, please. And another, fresh meal. I’m willing to give it another go since I understand that accidents happen and I’m usually too hungry to have to start the restaurant search all over again.

3. Items That Break Too Soon

If you’ve recently purchased an item and it breaks unreasonably soon under normal use — I’d say less than 90 days, for most things — take it back to the store for a replacement or a refund. I tend not to buy the same junk twice in a row, so typically I’d just like my money back so I can avoid this problem a second time. This is a situation where store associates and managers like to give you a hard time — “How do I know how it broke?” — but don’t let them beat you. Stay strong and stage a sit-in to get what you’re owed if you have to.

4. Groceries That Are Spoiled, Rotten, or Stale

I think this is a situation where Americans as a collective lose tons of money, but one that is considered perfectly valid refund territory. I would be willing to bet than more times than not when the average supermarket shopper realizes they have a spoiled, rotten, or stale item when they’re already home, they just throw it out. What’s a few bucks, they think. Plus, they’d have to get back in the car, go back to the store, speak to the manager, blahblahblah. All worth it in my book. Food isn’t cheap, and this is America; we shouldn’t expect anything less than the highest quality food for which we’re paying.

5. Goods That Aren’t as Advertised

False advertising is against the law for a reason: You can’t trick people into thinking they’re getting one thing and then sell them something else. This goes for anything: from kids’ toys to electronics to power tools. If the item said it was going to perform a certain way and it fell short of that promise, you deserve a refund.

6. Services That Aren’t Performed as Promised

It’s not just tangible goods that can fall short of expectations; services, like hair and nail salons, auto body shops, and dog grooming facilities can too. I take services that aren’t performed as promised seriously because it’s an active-engagement situation, and as an entrepreneur myself I recognize the importance of providing the very best service possible — and when that’s not possible, apologizing and doing whatever I can to make amends. Good costumer service is key, and I expect you to recognize that without putting up a fight if I’m being perfectly reasonable.

7. Erroneous Charges on Your Bill

Mark my words here: This happens ALL the time. From your cell phone bill to you Internet bill to your doctor’s bill, there are sometimes strange charges that shouldn’t be there. Most of the time they’re mistakes, but I’m also not naïve enough to think that the provider isn’t sometimes trying to get one over on you, thinking you won’t read the bill closely enough or that the fee they’re overcharging is so low you won’t waste your time fighting it. Read your bills closely and make sure every charge is accounted for.

8. One-Time Late Fees if You’re a Loyal Customer

Just hours before I started writing this post, I called J. Crew to dispute a late fee on my bill. I didn’t receive the bill in time as it arrived at my other home, so I missed the payment due date. Because I’m a very loyal customer to J. Crew, and I always pay my bill in full each cycle, I called to kindly request that the late fees be waived for this circumstance. The customer service agent was perfectly willing to do it, and it saved me $50.

9. Hotel Rooms That Aren’t Sufficiently Clean

I stayed in a Red Roof Inn once that had not one but two bugs in it (not the bed variety, thank God); a hair on the towel; and no cold water in the sink, only boiling hot. I sent a message through the customer service portal on the hotel’s website asking for a refund but my claim was dismissed. I stayed at the same hotel a week later and coincidentally they gave me the exact same room with the exact same issues, just no bugs this time. Again I requested a refund. I got a credit for a free night’s stay – which is sort of moot, because why would I go back there after they failed me twice? – but it’s better than nothing from a company that obviously doesn’t put much stock in customer service.

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MONEY Spending

Here’s How Much You’ll Spend on School Supplies This Year

Willy de l'Horme—Getty Images

Back-to-school spending will be less this year, according to a survey released Wednesday.

Retailers betting on a back-to-school bonanza to lift 2015’s somewhat mediocre sales might be in for a disappointment.

U.S. consumers are expected to spend about $68 billion on back-to-school and back-to-college items this year, down 9.3% from $75 billion last year, according to a survey released on Wednesday by the National Retail Federation, an industry group. After loading up on expensive electronics in 2014, consumers are likely going to cut back on spending in that category, shelling out about $207.27 per person, down from $243.79.

A sluggish back-to-school season would deliver yet another setback for retailers, which have yet to benefit from lower unemployment rates and higher consumer confidence. In June, retail sales unexpectedly fell 0.3%, the weakest reading since February, after May’s downwardly revised, and modest, 1% increase.

The back-to-school and back-to-college season is key for several retailers. Kohl’s KOHL'S CORP. KSS 0.74% , a retailer that’s eager to prove that its recent spate of improving sales has staying power, collects 15% of its annual sales during the period. Other back-to-school-reliant retailers include teen fashion chains Abercrombie & Fitch ABERCROMBIE ANF 2.79% and American Eagle Outfitters AMERICAN EAGLE OUTFITTERS, INC. AEO 0.18% , as well as department stores like J.C. Penney J.C. PENNEY JCP 5.55% and Macy’s [fortune-stock symbol=”M”]. What’s more, the back-to-school and college period often gives retailers an early read on consumer mood heading into the key holiday season.

The NRF, which had Prosper Insights & Analytics survey 6,500 consumers between June 30 and July 8, said a significant part of the comedown was simply due to the fact that shoppers stocked up quite a bit in 2014.

“As seen over the last 13 years, spending on ‘back to school’ has consistently fluctuated based on children’s needs each year, and it’s unlikely most families would need to restock and replenish apparel, electronics and supplies every year,” said NRF President and CEO Matthew Shay.

Despite what has been a slow start to the year for many stores, from Macy’s to Walmart WAL-MART STORES INC. WMT -1.73% to Gap GAP GPS -0.42% , the NRF expects consumer spending trends to improve in the second half of the year.

This article originally appeared on Fortune.

TIME Money

Why Companies Should Pay Bonuses Twice a Year

dollar bill sliced vertically into sections
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A semi-annual bonus can be a better motivator for employees than a single year-end payment

Whether you find personal satisfaction in your job or work purely for a paycheck, money is an important motivator. Intellectual stimulation or a sense of accomplishment are great to have but they don’t pay the bills. A common and popular mechanism used by companies to reward employees is the year-end bonus, which serves as a carrot for workers to aspire to as well as a stick for those who don’t perform.

But does it really work as it should and is a semi-annual bonus more effective in motivating employees?

Here is why a year-end bonus is problematic. Even though it ties employees down for a whole year with the company and theoretically makes them work hard for it all year round, twelve months is a long time and employees can lose their motivation during that period for a number of reasons. These include uncertainty and worry about whether they will be rewarded appropriately at the end of the year, lack of financial milestones along the way to indicate how they’re actually doing, and resentment at their bonus being withheld so long, especially if they’re struggling to meet financial obligations during the year.

Handing out bonuses twice a year, by contrast, can mitigate uncertainty, send a clear signal to employees about how well they’re performing, reduce their resentment at being forcibly tied to the company for an entire year, and enable them to lead a more comfortable life with money in their pocket. This in turn can engender more loyalty from employees and incentivize them to do their best work for a company that they feel cares about and values them.

In addition, since a bonus serves as the perfect report card, a semi-annual bonus can be used to encourage employees to adjust their performance during the course of the year instead of only at the end when they receive their annual performance review. That obviously benefits the company but can also help employees improve their work product and increase their chances of a receiving a higher bonus in the next cycle.

Finally, a side benefit for a company of a semi-annual bonus cycle is in budgeting. Since employee compensation is often a large portion of a business’s costs, handing out part of the bonus at mid-year can provide a more realistic assessment of the money left over to meet other operating costs and prompt the company to plan the rest of the year accordingly.

For all these reasons, businesses that hand out bonuses only once a year should consider changing their policy.

S. Kumar is a tech and business commentator. He has worked in technology, media, and telecom investment banking. Kumar does not own shares of the companies mentioned in this article.

MONEY consumer psychology

10 Reasons You’re Not Rich Yet

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#5: You’d rather complain than commit.

As a financial advisor, I have spent many years helping other people overcome financial stumbling blocks so they can become rich. Ironically, the one person I have had the most trouble helping is myself.

Being “rich” can mean different things to different people, but I believe it means having the financial freedom to achieve your goals and live the life you want. I am great at giving advice; I am not always so great at taking my own advice (know anyone like that?). So, when it came to helping my clients understand why they weren’t rich yet, the easy part was explaining the culprits, because I was all too familiar with most of them.

Regardless of our upbringing, education, profession or lifestyle, most of us are not where we want to be financially and our reasons are probably more similar than different. The good news is that it is never too late to become rich if you, like me, are ready to own up to the reasons you’re not and do something about it.

Want to know why you aren’t rich yet? Keep reading.

#1: You spend money like you’re already rich.

Sure, it feels good to buy expensive things, whether it’s a luxury car, designer clothes, a big house in the burbs, or a tropical vacation. Even if you don’t necessarily buy pricey items, if you consistently buy stuff you really don’t need, it still adds up fast ($300 trip to Target for toothpaste? AHEM). But the shopping high only lasts until the guilt and regret set in or the credit card bill arrives. Most of us are guilty of living beyond our means and using credit cards more than we should. The problem is that as long as we continue to spend more than we have, we can’t start building wealth. Chronic overspending and high-interest, revolving credit card debt are your worst enemies when it comes to financial success. Spend like you’re poor and you are much more likely to become rich.

#2: You don’t have a plan.

Without clearly defined short, mid and long-term goals, becoming rich will just seem like an unattainable fantasy. And that turns into your go-to excuse for why you shouldn’t bother saving or stop overspending. As we say in the financial industry: those who fail to plan, plan to fail. Creating a financial plan may seem overwhelming or intimidating, but it doesn’t have to be. Whether you do-it-yourself or decide to work with a financial professional, the process simply starts with prioritizing your goals and writing them down. Put that list where you can see it on a regular basis. Visual reminders go a long way in helping us stay on track.

#3: You don’t have an emergency fund.

I know, you’ve heard it a hundred times: you need to have at least six months of income saved in an emergency fund. And yes, it’s much easier said than done. However, I’ve seen too many people (including myself) get hit with a major unplanned expense, whether it’s a car or home repair or a medical bill, or an unexpected job loss, accident or illness that’s led to a drastic reduction in income. When these things happen–and they do, more often than you might think–not having a financial safety cushion can make the situation much, much worse. If you’re forced to rely on credit cards, you’ll end up sinking deeper into debt instead of, yes, saving to become rich.

#4: You started late.

With every year or month that goes by without saving, your chances of becoming rich decrease. Time and compounding interest are your two best friends when it comes to growing money, so wasting them really hurts. Just like exercising, the hardest part of saving is starting. Even if you’re in debt, making little money or have a lot of expenses, you can still always save something — even if it is a small amount. The sooner you get yourself into the habit of saving — regardless of how much — the easier it will be for you to continue and eventually increase those savings. I like to think of saving as a muscle you have to work out and build with practice. Even if you start saving late, you can still become rich if you’re committed enough. But you need to start. Now.

#5: You’d rather complain than commit.

“Life is too expensive.” “I’ll never get out of debt.” “I don’t make enough money.” “Investing is too risky.” I’ve probably heard every excuse for why someone isn’t saving, investing or planning in general, and I’ll admit I’ve used a few of them myself from time to time. It’s easier to be lazy and let bad habits fester than to commit to –and follow through on — changing them. It’s no wonder obesity and debt are epidemics in our country, and that millions of Americans have had to push off retirement. As long as the complaining, excuses and finger-pointing persist, so too will not becoming rich. Instead, take responsibility for your bad habits and focus on what you can do to change them. Then do it.

#6: You live for today in spite of tomorrow.

I get it. It is really hard to think about retirement and other distant fantasies when we have needs and plenty of wants now. The bills have to get paid, the family must be fed, momma needs a vacation — and a new wardrobe to go along with it. The problem is that impulsive and overly-indulgent behavior commonly lead to credit card debt, spending money you might have otherwise saved and, yes, not becoming rich. Do yourself a favor: Ditch the “buy now, worry later” mindset and instead, adopt a “save now, get rich later” mindset.

#7: You’re a one-trick investor.

You might be lucky enough to become rich by betting all your money on one type of investment. Just like you might be lucky enough to win the lottery. But that’s not a strategy for getting rich (at least, not one I’d ever recommend).

One of the worst financial mistakes you can make is putting all your money eggs in one basket. Doing so puts you at too much risk, whether it is being too conservative or too aggressive. Sure, the stock market is on a run and real estate is on an upswing again, but are you prepared for when the tides turn? Because they will. And if you are invested in all fixed-income securities like CDs, bonds and annuities and think you’re safe, inflation should make you think again. Your investment portfolio needs to include a good mix of investments with varied levels of risk and return potential and liquidity (so you can get your money when you need it).

#8: You don’t automate.

Here’s the secret to saving: Automation. Saving is seamless when it’s automatic. Unfortunately, we are not born to be savers. We are impulsive and greedy by nature. Being responsible requires much more discipline. However, automation forces us to be responsible without too much effort. And all it requires is setting up regular transfers from a paycheck or bank account to a savings or investment account. Without it, we are much more likely to spend money we could be saving. Even if it is a seemingly small amount that you automate, those steady investments can make a big difference over time. Automate whatever you can whenever you can; just be careful to avoid overdrafting your account and try to increase your savings amount periodically.

#9: You have no sense of urgency.

You might think you don’t need to worry about getting out of debt or saving because someone, or something else will save you. Maybe it’s a pay raise, a new job, an inheritance, a rich spouse, or the lotteryyou’re counting on. Whatever “it” is, you use it as an excuse to put off taking steps on your own to become rich. The problem is that very little in life is certain. Who knows what will actually happen, or not happen, so why not focus on what you can control now? Save now and save yourself — just in case something, or someone, else won’t.

#10: You’re easily influenced.

Maybe you live with a chronic overspender or a typical day out with your girlfriends involves shopping. Or maybe it’s your inner “Real Housewife” that you sometimes can’t control. We all have negative influences in our lives that threaten our chances of becoming rich. The superficial, materialistic, sensational culture in which we live is probably the biggest one. The suffocating swirl of media that goes along with it makes it ten times worse. The trick is not giving in to temptation. How? Some of it is making conscious choices to avoid putting yourself in vulnerable positions. But most of it is having the willpower to keep the goal of becoming rich in the front of your mind, especially when you are tempted to sabotage yourself.

Read next: The 10 Richest People of All Time

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Eric Barker writes Barking Up the Wrong Tree.

  • The word sale makes us less likely to comparison shop and yellow tags fool us into thinking we’re getting a discount even when we’re not.

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