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Many people make impulsive decisions, which can lead to excessive spending and debt. Even though education teaches people how to handle money while staying out of debt, sometimes decisions may be made that are not logical, leading to a small amount spent. When this happens multiple times, the debt builds up and accumulates interest, leading to a cycle of spending. Interest rates on loans are high, and credit card interest is even higher. Global economics, business practices and media bias all unknowingly persuade people to make changes to their spending and budgeting.
Global economics has the biggest inﬂuence on spending because of outsourcing jobs to other countries By having products made in a country with a low minimum wage, companies save money that they pay to workers. This allows the end price of the product to be lower than if it was manufactured in the US.
Also, the currency exchange rate may make the US dollar worth less to another country if their currency value goes up.
This causes an increase in spending to get the same amount of product. Businesses regulate the prices of products and the budgets of their employees. When companies manufacture a product, they decide what price it sells at. This then dictates how much money consumers spend on it. Their employees’ pay determines their budget. If an employee decides to pay their employees minimum wage, the peoples’ budgets will be limited. If they decide to pay them twice the minimum wage, their quality of life will be better because they have more money to spend as well as more disposable income.
Media is the main way that people ﬁnd out about new products, If the media only mentions one brand of a product, it may lead you to believe that it is the only good brand. These products may cost more than the competing ones and therefore have people spend more money because they were not informed of all choices.
Also, the media may choose to be one-sided about certain companies, warning about the bad but not mentioning the good. They may talk about a company laying off workers, but not that the company is losing money and has to so that they can stay in business. People may not spend their money with that company. Whether people realize it or not, their spending and budgeting are inﬂuenced by global economics, business practices, and media bias. Global economics lowers the cost of items for consumers. Businesses make the prices of their products and the media reports on everything, sometimes in a biased way that may damage a company’s reputation. People spend more money because of all of these factors, sometimes without even knowing about other choices.
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