Curated Links: 04/15/2024 – How to Manage Windfalls

The Curse of Mental Accounting

Since the conscious mind can only handle a few thoughts at any given time, it’s constantly trying to “chunk” stuff together, to make the complexity of life a little more manageable. Instead of thinking about each M&M, we think about the scoops. Instead of counting every dollar we spend, we parcel our dollars into particular purchases, like paying for a hotel room. We rely on misleading shortcuts because we lack the computational power to think any other way.

https://www.wired.com/2011/02/the-curse-of-mental-accounting/

Source: Wired

The Surprising Link Between Guilt and Overspending: Does It Cause You To Waste Money?

Overspending, followed by guilt, followed by more overspending can become a vicious cycle. However, by confronting one’s guilt rather than avoiding it, one can use it as the fuel necessary to achieve financial responsibility through the pragmatism of careful budgeting and the detoxification of buyer’s guilt.

https://finance.yahoo.com/news/surprising-between-guilt-overspending-does-150108443.html

Source: Yahoo Finance

How to Get Over Spending Guilt

Spending guilt is something that many people experience when it comes to their money. According to a 2019 survey, consumers say they feel guilty about every one in five purchases they make. They spend around $89 every week that they feel guilty for, which totals $277,680 over their lifetime.

https://mixedupmoney.com/how-to-get-over-spending-guilt/

Source: Mixed Up Money

Here’s why lottery winners go broke

Just eight months after winning, he was robbed of $545,000. “I just don’t like Jack Whittaker. I don’t like the hard heart I’ve got,” he said. “I don’t like what I’ve become.”

https://www.cnbc.com/2017/08/25/heres-why-lottery-winners-go-broke.html

Source: CNBC

Why do 70 percent of lottery winners end up bankrupt?

In fact, about 70 percent of people who win a lottery or get a big windfall actually end up broke in a few years, according to the National Endowment for Financial Education.

https://www.cleveland.com/business/2016/01/why_do_70_percent_of_lottery_w.html

Source: Cleveland Press