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3 Psychological Tricks Restaurants Use To Make Us Spend

By Frugaling 1 Comment

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3 Psychological Tricks Restaurants Use To Make Us Spend. Crafting a menu is key. There are strategies that the restaurant industry employ to aid your psychological mindset and encourage greater spending.

Eating out is easy on the mind and awful on the budget. There’s no argument here – you can save more by eating in. The reality is that Americans eat out a lot and the statistics are staggering. The National Restaurant Association suggests that Americans spent $632 billion last year (2012) at restaurants. With that much at stake, companies have quickly made a science out of it.

We spend about $1.7 billion per day eating out, which equates to $2,505 per household per year. That’s money that could otherwise be going to meals at home and a stronger retirement fund for your future, family.

The Science Behind Perception

For 99 cents, you can purchase a bean burrito at Taco Bell. The iconic logo, waxy paper, and drive-thru lane all connote a certain class and quality. Many question the standards, while others exult the affordability. But when you go out to eat at a fine restaurant, you’re looking for something better. Afterall, that’s what you’re paying for, right?

Science has perfected three key ingredients to make you spend more and with greater frequency: music, colors, and menu. By availing yourself of this knowledge you can become a more critical patron and save hundreds – possibly thousands – each year.

Sights, Sounds Make You Stay

Upon walking into your favorite restaurant you’ll normally find a music track that follows you throughout the room. From dark wood and leather upholstery to brightly lit metals, the decorative touch says a lot about what you’ll spend. By creating a safe, fun, relaxing environment, restaurants invite us to to stay and spend.

Time spent in the restaurant was the most powerful predictor of money spent in the restaurant (Caldwell & Hibbert, 2002).

Restaurants are intentional with everything they do. Knowing their audience is key, because if the patrons identify with the music playing, they’re likely to  stay longer.

…Music preference provided a better explanation of actual time spent dining than tempo (Caldwell & Hibbert, 2002).

Even your menu choices may be influenced by the music and ambiance. French music may play gently in the background, and it may influence a decision to purchase French wine.

French music led to French wines outselling German ones, whereas German music led to the opposite effect on sales of French wine (North, Hargreaves, & McKendrick, 1999).

Colors Make You Feel

Today, you can find salmon with color added. The Kool-Aid, sodas, and sport drinks all fizz and pop with a different fluorescent color. Psychologically, we are wired to interpret these colors as indicators of health and vibrancy. These shades have a powerful effect on our perceptions of taste.

Color had a significant influence on the identification of…flavors (Stillman, 1993).

Seeing vibrant colors in food can enhance flavor identification and perceived satisfaction of the product being offered. Alone, this quite powerful. But restaurants also enhance and manipulate your sense of taste by the color of cups, bowls, and accessories.

…beverages were ranked as sweeter when consumed out of cream-colored cups. Drink unsweetened hot chocolate from an orange mug, serve fajitas on a red plate… (Prevention).

Menu Pricing, Formatting Make You Pay

Crafting a menu is key. There are strategies that the restaurant industry employ to aid your psychological mindset and encourage greater spending.

When we are reminded of the dollar cost of menu items, spending can be affected. There’s a quick fix to alleviate the burden of spending: take these symbols off the menu!

…results did show a significant reduction in spending when formats with monetary cues such as the word “dollars” or the symbol “$” were used (Yang, Kimes, & Sessarego, 2008).

99 cent items are commonplace at larger fast-food changes, and there’s a powerful psychological component to creating a gap between 99 cents and regularly-priced meals.

A fast-food operator may hold prices below $1.00 for as long as possible, and then jump to $1.25 or higher…because there is less purchase resistance once the dollar barrier has been jumped (Kreul, 1982).

This effectively creates a dichotomous menu of decisions for the patron: Group A (less expensive) versus Group B (more expensive). For finer restaurants, Group A is kept higher than average and Group B is kept lower than average. This makes spending more seem like a better value.

There’s a reason that chunks of text may be next to a short dish title. Including detailed descriptions of the menu offerings can assuage spending concerns.

…menu descriptions have the potential to increase revenue while also increasing the value perception (Shoemaker, Dawson, & Johnson, 2005).

Conclusion

Restaurants are clearly here to stay. Americans have voted with their capitalistic dollar in powerful agreement. The fact remains that eating out is a social past-time and great way to hang out with friends, co-workers, and lovers. By learning about the tricks restaurants use, you can at least become a critical consumer and save money along the way.

For more about critical consumption and tricks businesses use to sell us more, check out: Brandwashed: Tricks Companies Use to Manipulate Our Minds and Persuade Us to Buy.

Filed Under: Save Money Tagged With: date, Food, restaurants

Compensation Provided: Becoming a Medical Participant for Fun and Profit

By Frugaling 14 Comments

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Compensation Provided: Becoming a Medical Participant for Fun and Profit.  More and more students are turning to medical participation - for better and for worse - to pay their student loans and credit card debt.

My schedule is taxing; at least, during the school year. This summer I am working and volunteering to make use of my time. In the spare hours, I’m moonlighting as a medical participant for fun and profit.

Finding the Right Studies

As a graduate student in psychological sciences, I was aware of the ever present research studies at my university. When I first considered participating, I thought about needles, genetic testing, and doses of untested medications. While some participation opportunities focus on this more invasive, dangerous region of research to gain FDA acceptance, another batch aims to look at physical health, mental functioning, and performance. This is the sweet spot. Over the course of two weeks, I’ll make an extra $200 by participating in two studies about gambling behaviors and testing my audio-visual abilities – no smallpox required.

Medical Participant: Example
This isn’t the sweet spot.

Where to Volunteer

Medical Participant: ScreenshotUniversities and research institutions are constantly looking for “volunteers” that will be compensated for their “time.” The trick is finding studies that are applicable to you and fit into your schedule. Clinical research opportunities request some basic criteria (i.e., age, sex, race, etc.) and then specify what will be studied. With my busy schedule, medical participation for compensation is the perfect extra income. I don’t need to have any time commitments that overlap schedules and researchers are generally flexible. By gaining access to medical participation boards, you can begin to search for research. At my local university, there are a variety of different sites with opportunities. Dentistry, psychiatry, medical, and psychology all have public research wings for participants.

The largest, nationwide database can be accessed at ClinicalTrials.gov. The website contains 146,871 studies in 50 states and 184 countries.

The Student Body

The strangest part: I’m not alone. More and more students are turning to medical participation – for better and for worse – to pay their student loans and credit card debt. One student, Ken Ilgunas, made $391 by participating in MRI studies while a graduate student at Duke University. While contributing to science and making a buck is a generally a win-win, consider the risks involved before signing away your mental or physical health.

Filed Under: Make Money Tagged With: medical, money, participant, research

Credit Card Usage Drops Among College Students

By Frugaling 2 Comments

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Credit Card Usage Drops Among College Students. Maybe this reduction will prevent early credit card debt and uncontrolled spending. Maybe it will reduce credit scores and make loans more expensive and inaccessible down the road.

Surprisingly, credit card usage dropped from 42 to 35 percent among college students from 2010 to 2012. While this may signal more discerning students for credit card offers and tightening budgets, the reduction may have resulted from the CARD Act’s provisions regarding the application of new credit.

Before 2009, anyone over 18 could apply for a new credit card with little concern. Applicants were not usually asked to verify their current income, either. This led to a tragic susceptibility for wild spending and damaged credit. Nowadays, 18 to 21-year-olds must apply for credit with a verified income or co-signed with a parent.

When I was 19, I applied for my first credit card. I spent too much, churned cards, and wasted my time researching far too much about them. But, in establishing good credit, it has been a success. Sitting at around 767, I am in the highest bracket for lending. While my goal is to reign in my debt for all accounts, the strong credit score has eased my ability to receive credit cards, car loans, and student loans. In the end, I wonder how credit scores will be affected by this swing away from credit cards and reduced accessibility 18-21.

Maybe this reduction will prevent early credit card debt and uncontrolled spending. Maybe it will reduce credit scores and make loans more expensive and inaccessible down the road. Either way, we may be seeing a changing demographic for who traditionally uses credit cards.

Filed Under: Loans, Save Money Tagged With: college, credit cards, Students, university

How To Make And Follow A Monthly Budget

By Frugaling 3 Comments

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How to make and follow a monthly budget. Creating a monthly budget goes back to basic accounting skills. It's a simple equation: What you spend must be less than you take in.

You’ve heard about budgets. You’ve seen budgets. You’ve been told to make a monthly budget. It’s a tragic irony, but after all that, most can’t. Despite the ease of conceptualizing a budget, complying tests a different skillset: self–control.

Mint.com is an incredible development in money management, but it’s just the start. These services aid in the monitoring of spending, but don’t manufacture self-control. To create and follow a monthly budget, behavioral restructuring must take place. Over the course of this article, I’ll help you create a budget and then change your decision-making to follow that new plan.

How to Create a Monthly Budget

Creating a monthly budget goes back to basic accounting skills. It’s a simple equation: What you spend must be less than you take in. But despite the brevity, it’s the most important foundation to revolutionizing your bottom line. In 5 short steps, you’ll have your budget ready.

1. Where is your money going?

This can be the most time-consuming part. Track your expenses and write down the totals. For me, my tracking is all online, which makes the process relatively effortless.

A couple months ago, before I started this site, I was eating out far too much. The realization and behavioral restructuring to pack lunches saved me about $300 a month. Just looking at where your money is flowing is the first step to success.

2. Pick your poison program

Whether you choose to use Excel or Google Drive/Docs for spreadsheets, it won’t matter that much. My recommendation is to store it with Google because the portability and accessibility allows me to check how I’m doing on the go.

Get comfortable with the basic functions of spreadsheet apps. Most offer powerful mathematical tools that few know how to use. Totaling numbers and columns can make your budget update automatically and respond instantly to changes each month. Again, this is why a strong budget is essential to balancing the spending. (Here’s what formulas look like: =(B21+B22-B19))

3. List the monthly essentials

By examining your monthly spending, some basic categories should emerge. Follow these and remember what your regular bills are. For me, this includes rent, food, car loan, debt repayment (student loans), utilities, car insurance, health insurance, dental insurance, tuition (graduate school), and gas. To better understand how my money flows, I include tax withholding at the state and federal levels, but this is hardly necessary if you know your total take-home pay.

4. Input values from last month

Now that you’ve created the basic categories and totaled the dollar amounts for each, just input them into the spreadsheet. Create a spreadsheet function that totals this new column of costs.

5. Input expected income and subtract costs to establish budget

Like I said, I put total income here (before tax withholding). Whatever you choose, this number should be subtracted by the associated costs from step 4. Now you have the basic surplus or deficit. The questions about cutting costs or becoming more frugal in some parts of your life are up to you. The key to abolishing your debt is not only balancing the budget, but creating conditions for a surplus.

How to Follow a Monthly Budget

If you made it this far, you’re well on your way to saving more. The key now is to change your traditional spending patterns. Unfortunately, this is where most people falter.

There’s a form of therapy called CBT (Cognitive Behavioral Therapy). Essentially, this enables thought and action changes in direction. That’s what will be doing. Following any sort of behavioral change requires significant preparation and work. These are 3 important tips for following that new budget.

1. Where do you splurge, slip up, etc.?

Be honest: Where are the holes in your budget? When you actually ask what’s necessary versus desired, there’s usually a gap. Closing this gap is key to living the frugal life. Maybe you can’t change your apartment rent, but you likely can eat out less. By the end of this search, you should have identified at least one action you want to accomplish.

2. What positive action can replace this?

When I want to eat out for lunch, I must find a positive alternative. This is key to modifying behavior. What can I do that allays the desire to eat out? This action will differ for everyone, but the common root is preparation. The times that I wanted to eat out, I was hungry. By suppressing my hunger, I can effectively reduce the urge to splurge. The solution? Now I carry energy bars nearly everywhere I go.

3. What positive punishments can be established to prevent future spending?

Preparative accountability is also important. Who will hold you accountable for the actions you make? As social creatures, this should encourage healthier behavior and spending prevention when the right people are requested for your help. Ask a trusted friend to become a benefactor to your bad behavior. For instance, I could ask a friend to hold me accountable for eating out. Their reward? If I slip up, I owe them $10 (about the cost of another lunch). This punishment and social accountability is key to changing behaviors.

In case you want to learn more about the research and support behind this, watch Professor Dan Ariely explain behavioral modification for better self-control:

Filed Under: Save Money

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