Debt
Secured and unsecured borrowing are different products, not different prices
Attaching an asset to a loan changes what the lender loses if you stop paying, and that single difference…
· 4 min read
Harsh Vardhan
Staff writer, Dollars & Decisions
Harsh writes about spending, saving, debt, mostly the parts other people skip and prefers a plain explanation to a clever one.
20 articles
Investing Basics
Compound growth rewards time more steeply than it rewards rate
Growth applied to growth is a multiplication problem, so the number of years enters the sum as an exponent…
· 4 min read
Money & Mind
What has already been spent cannot be recovered by spending more
The sunk cost fallacy treats money that is already gone as a reason to commit further money, when the only…
· 3 min read
Spending
Repair, replace or do without is a three-way comparison
When something breaks the choice is usually posed as fixing it against buying a new one, which quietly…
· 4 min read
Saving
A household absorbs an income shock in a fairly predictable order
When money stops arriving, the sequence in which a household reaches for each option is largely determined…
· 4 min read
Saving
Automating a transfer changes when the decision happens, not how hard it is
A scheduled transfer works because it moves the choice to a moment when nothing is being given up, and then…
· 3 min read
Saving
The proportion saved works on both halves of the sum at once
Saving a share of income rather than a fixed amount does two things simultaneously: it builds the balance…
· 3 min read
Debt
A credit limit is an offer from a lender, not money the household has
Available credit sits in an account looking like a resource, and treating it as one changes spending…
· 4 min read
Investing Basics
A mixture drifts, and rebalancing is the rule that pulls it back
Holdings that grow at different rates change the proportions of a portfolio without anyone deciding…
· 3 min read
Money & Mind
A household sets its standard by looking sideways at other households
What feels like a normal level of spending is largely determined by the people nearby, which means the…
· 3 min read
Spending
Some cheap purchases quietly commit you to an expensive supply
A device sold below its apparent worth is frequently priced that way because the money is made afterwards…
· 4 min read
Spending
Being cheap and being frugal are not the same habit
One minimises the amount handed over in each transaction, the other minimises what a household gives up in…
· 4 min read
Saving
A rate that reverts is really two rates with a date between them
Introductory pricing on a savings account is a real return for a limited period followed by whatever the…
· 4 min read
Debt
An overdraft is borrowing that begins without any decision to borrow
Because the facility sits inside the account that everyday spending runs through, it is entered by…
· 3 min read
Debt
An overpayment can shorten the loan or lighten the payment, and the default is not the same everywhere
Paying extra towards a debt has two possible effects with very different values, and which one happens is…
· 3 min read
Investing Basics
The return an investment made and the return an investor made are different numbers
Because money goes in and comes out at chosen moments, the experience of a holding depends on timing as…
· 3 min read
Money & Mind
A decision that turned out badly was not necessarily a bad decision
Judging choices by their results confuses the quality of reasoning with the roll of the dice, and it…
· 3 min read
Spending
When two purchases compete, the real question is which one waits
A household that cannot afford both of two wanted things is not choosing between them permanently; it is…
· 3 min read
Saving
A new child changes the shape of a budget before it changes the total
The money a child requires arrives as a short burst of one-off costs, a permanent rise in ordinary running…
· 4 min read
Saving
Restoring a reserve after it has been used is the stage nobody plans
A cash buffer that has done its job is a buffer that no longer exists, and the second half of the…
· 4 min read