Session 1: Making good spending decisions
Welcome to the first session of MoneySavingExpert’s Academy of Money.
In this session the focus is on spending.
Spending money is something we do virtually every day, whether that’s buying a sandwich at lunchtime, a trip to buy clothes for yourself or the family, or shopping online. A lot of us enjoy this, whether that’s the shopping experience itself, or the anticipation of using or consuming the item we’re buying.
We are, however, subjected to an array of influences when it comes to how we spend our money.
Some of these influences come directly from our personalities and habits. Some are socially driven – for example, spending money to impress others, or as a manifestation of a certain type of lifestyle. Or, we might be directly influenced, whether consciously or not, by the retailer marketing certain products to us
You’ll start this session by looking at these influences. Then, you’ll look at how a simple decision-making model can help you ensure that you make rational decisions when choosing to buy something, rather than falling foul of these internal and external pressures.
You’ll then be taken through how to apply this model to one category of spending that nearly all households engage in – buying insurance products. The range of different types of insurance, the multitude of insurance providers and the complexities in the terms of the products make this an ideal area for the help that the four-step model can provide.
Next, you’ll look at online shopping and at how to make good decisions online. You will also find out how to identify the clues to the scams that are found on the internet and the action you can take to minimise the chances of being scammed online.
To ease you into the course you’ll start by examining your financial personality. What are your financial traits? Are any of these bad habits? Understanding the ways you currently approach money management will help not only with this session but the entire course.
The current cost of living crisis arising from the surge in energy prices and exacerbated by the rising cost of other essentials has made it even more important to understand what influences your spending and how to manage your financial decisions.
After studying this session, you should be able to:
- understand some of the behavioural, social and marketing pressures that affect spending
- use a four-step approach to make effective spending decisions
- understand the factors affecting the cost of insurance products
- apply the four-step model to the selection of insurance products
- identify scams when shopping online
- be a savvy internet shopper.
The Open University would really appreciate a few minutes of your time to tell us about yourself and your expectations for the course before you begin, in our optional. Participation will be completely confidential and we will not pass on your details to others.
This Session is one of a suite comprising the course MSE’s Academy of Money and has been made possible by financial and content contributions by MoneySavingExpert.com.