money and brain

To tie in to our show on your money and your brain, I wanted to hit a few more areas where consumers need to be on the lookout for switcheroos, fine print or other tricks your brain might not immediately recognize.

We’re all busy, but it’s important to be an informed consumer. My hope is this list will help you “train your brain” – much as it works against you – to recognize these scenarios for what they are:

At the supermarket. Packaged goods, believe it or not, can be serious offenders. Because the companies that produce these products figured out long ago that shoppers don’t take well to price increases. So, instead of bumping the numbers, these companies tend to downsize their product’s content – but keep the price (and sometimes even the size of the package) the same. You likely won’t even notice the difference – unless you check the corner of the package for quantity information each time – but your wallet will over time when you have to buy more of an item. Tuna has gone from six ounces to five. Cereal boxes, orange juice cartons and ice cream containers have all been shortchanged in the past couple years. And perhaps the worst offender? Toilet paper, which sometimes keeps the same number of sheets per roll, but shortens those sheets so you get less on a roll.

On the car lot. Car dealerships are constantly offering enticing deals to consumers. You have the end-of-model-year sales. The overstock discounts. And, during times of high gas prices, the free gas giveaways. Their promotions and advertising are often less than upfront. A few examples, courtesy of Manufacturers almost always show the fully-loaded, top trip model in ads, but list the base price, leading you to believe you can get more for your money. They’ll generally advertise a mileage per gallon that is only achievable under the absolute best conditions. And they’ll list lease payments that, if you read the fine print – and I don’t know about you, but I know I need glasses to even know the fine prints is there – require several thousand dollars down.

In your mailbox. I’m talking about that pile of credit card offers and pre-approval promotions you get each week. The fine print? You may not qualify for that low interest rate – it’s for the most worthy borrowers, with credit scores of 720 and above – and there may be additional fees outlined, whether for that “0% interest a balance transfer” – often up to 3% of the amount you decide to move – or an annual cost tacked on to your bill of $60, $100 or more.

In closing, some advice to help you avoid these consumer pitfalls: First, follow the asterisks. It leads to the information you need to know. Read that information (you think this goes without saying; I know from years of experience that it doesn’t). Don’t sign anything before you fully understand what you’re buying or agreeing to. And if you’re confused, walk away. One of my money rules is that if you can’t explain it to your partner or spouse, you shouldn’t buy it. This applies to investments and purchases at the mall.