The one thing that people are not taught about today is how money has such a psychological component attached to it.  You can actually take the same amount of money, and present it a number of different ways, and always get the same results.  The exact same amount, just presented differently.

I remember in one instance, we were advising a young couple just getting out of the gate.  They had great intentions of achieving financial success, and wanted to take the proper steps at the beginning of their life together.  Ok, fine, now what.

Well we chatted about real estate, children, mortgage, retirement, debts, automobiles, spending habits, and financial goals  We figured out a number of variables, got a good grasp on them and then it came to how much are we going to save.  Savings of earnings is now at the forefront of the conversation.  So we dive in. 

In our practice, our first step to guiding clients is the discovery mode.  We find out everything about them from a financial stand point, the good and the bad.  In this particular case, we had completed the discovery process.  We now have a great understanding of where they are and where they want to be.  Now the fun part.

Given their financial situation, and what they wanted to accomplish, I offered them a number.  $320 per month for savings.  They immediately looked at each other and said, no way on earth.  I then asked if they could make some small sacrifices, such as buying coffee, $4 per day = $20 per week = $80 per month.  25% of the way their just by making coffee at home instead of buying out, sorry Starbucks.   

I asked if they could cut down on their cable bill, where they food shop, especially the specialty stores, could they change from brand name dishwashing soap to the generic, you know all the stuff that contributes to good shopping habits.  I then asked again, can you save $320 per month, the response, we just can’t do it now. 

I was aggressive on purpose, to show them how money actually works and how it is a very tricky product.  I asked again and again and again, can you please consider trying to save this amount of money.  Each instance, the reply was no, no, no we can’t.

I then asked, can each of you save $40 a week.  They looked at each other and said that’s better, we can definitely do that.  Let’s do some math.  It’s the same as $320 per month.  The husband and wife each save $40 per week, which is $80 per week which is $320 per month.  The same thing, just presented differently.

I then asked, do you see the difference.  They paused, thought and said something I’m not allowed to print, but you could imagine.  “It’s the same darn thing”

Numbers can mean a lot of things, for example, what can you can save on a $50 product.  Let's say you have a choice of presenting a $5 savings.  You can present it in two ways, the first, $5 off or 10% off.  Just my opinion, 10% looks bigger, and more attractive. 

Several companies use this method of presentation to get customers to purchase.  It does work most of the time.  Hopefully this provides some insight.  Same number, different presentation, same result.

Bob Fornaro is the Company Leader at rgfa, and can be reached at bobf@rgfa.us or visit our website at www.ataccountant.com, or follow us on twitter at @rgfa_us