Jesse answers a question from a listener who argues that becuase he carries enough cash to cover his credit card spending at all times, he is not riding the float and therefore is gaming the credit card companies. Jesse quotes Charlie Munger -- "show me the incentive, and I'll show you the outcome" (he actually said outcome not behavior) -- and observes that financial institutions have big incentives to encourage more spending, because spending increases their fees. So where there's an incentive, there's a behavior they want to encourage, and using credit cards is it. In Jesse's experience, ditching the credit card has made him less likely to impulse spend, and that experience is likely what financial institutions have figured out!
Got a question for Jesse? Send him an email:
askjesse@ynab.com
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342 - Motivation the Grind
341 - Broken Budgets
339 - API
340 - FOMO
YNAB Interview with Mike Michalowicz
338 - Budgeting is Spending
337 - Taking a Vacation from Budgeting
336 - Better Halves and Budgets
Ep 07 Debt Story: Meet Jennifer
335 - Money Stops, Obligations Keep Coming
Ep 06 Debt Story: Meet Sydney
334 - Parenting is Hard, Not Expensive
Ep 05 Debt Story: Meet Brittany
332 - Antifragile Finances
Ep 04 Debt Story: Meet Daniel
333 - Lowering the Baseline
Ep 03 Debt Story: Meet Andy & Melissa
330 - Is Eating Out Eating Your Budget?
Ep 02 Debt Story: Meet Tom
331 - Sacreligious Budgeting
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