In order to be a Ninja Piggy for your finances you need to be the master of your Expenses.

Businesses have created very advanced methods to take as much money from you as possible through clever marketing which uses psychology to trick your brain into paying more. Corporations spend billions of dollars each year at finding new ways to entice you into spending more and their methods continue to get better.

There is a way to defend yourself from the advanced marketing tactics. It requires discipline and a different way of thinking. Below is a common marketing trap that can wipe out your ability to save, along with some helpful tips on how to avoid.

Tactic #1: Avoid the Affordability Attack

The definition of an expense is “the money spent on something.” Simple right?

Ok, so if that’s the case if you buy a $20,000 car and take out a loan with a monthly payment of $500 what is your car expense?

The $500 monthly payment
The $20,000 car (+ all interest and other related costs)

If you answered, a), you are in agreement with most of America; however, you’ve fallen into the biggest psychology trap to get you to spend more. We’ve all seen the “three easy payments of $29.99” on television. This is the affordability trick.

Anytime you think of a large purchase by first breaking it down into a number of installments the marketer has won! If you divide a big number by a lot of months/years the resulting monthly value sounds very low and it tricks people into thinking they can afford it. The biggest issue with the affordability tactic is it tries to beat budgeting at it’s own game. By changing factors such as time of loan, number of installment, interest rate, and down payment required a lot of expensive things begin to look “affordable” on a monthly basis.

In order to become immune to this marketing trick we must evaluate all expenses at the total purchase cost. Reviewing the total purchase price is usually readily available; however, commit to not using an installment value for determining if something is affordable.