Money Matters

What you see is not always what you get

/ 09:30 PM September 24, 2013

Q: I have read many books about budgeting, written by both Filipino and American authors. I have even used budgeting calculators and mobile apps.  But I am still not able to apply my budget and I end up spending more on unnecessary things especially when they are on sale. Do you know of an effective way to stick to a budget? – posted at PFA’s “ask a friend, ask Efren” service.

A:   According to an article in Discover Magazine, our retina has 150 million light-sensitive rod and cone cells. Information from the retina is processed by hundreds of millions of neurons in the brain itself. Such neurons take up 30 percent of the cortex versus just 8 and 3 percent for the senses of touch and hearing, respectively. Each of our two optic nerves consists of a million fibers versus just 30,000 for each auditory nerve.


In their book, “The Definitive Book of Body Language” Allan and Barbara Pease quoted a Wharton study conducted in the US that found only 10-percent retention for verbal presentations vs 50 percent for combined verbal and visual presentations. The study also found that the average business meeting time is shortened by 28 percent with the use of visual aids. Allan and Barbara Pease went on to say that of visual presentations, 83 percent of information come via the sense of sight, 11 percent via the sense of hearing, 3 percent via the sense of smell, 2 percent via the sense of touch and 1 percent via the sense of taste.

We use our eyes to detect color, size, motion, shapes, distance and speed.  However, our brain fills in the “blanks.” “What blanks,” you ask. Here are some ways.


Our eyes actually provide images in two dimensions. However, we see in three dimensions. When we watch a movie, we are actually seeing multiple still shots. But when shown in rapid succession, our brain interprets the still shots we see as fluid motion.

Much of what we see is also shaped by our experience. For example, we know that a typical room would have floors parallel to ceilings. In an experiment, a trapezoidal room is made to look normal when viewed through a hole in the wall that is at a certain spot and angle; the floor and ceiling are viewed as parallel. That is what our brain is used to seeing. But when two people are placed on each end of the trapezoidal room, the tilt and length of the room combined with the angle of viewing make viewers perceive the person farthest from the viewing hole as tiny and the other one as large. When these people exchange places, the one who was previously perceived tiny suddenly grows in size and the other one who was previously seen as large suddenly shrinks. This experiment shows how our biases can override truths. In the real world, people cannot change sizes; but our biased belief that floors are always parallel to ceilings overrides that. This is called a visual illusion.

People have fun with visual illusion. If you are on Facebook, just wait for the next friend who posts vacation pictures. Some would hold out their palm in the middle of the picture in an attempt the make the illusion of holding a giant structure that is far into the background. Have you seen people seemingly holding Mayon volcano or the Eiffel Tower in the palm of their hand?

Unfortunately, we are not always aware of the visual illusion. And it is during these times that the biases in our mind can wreak financial havoc.

Preparing a budget is a great way to manage your money, much as a diet of foods with proper nutrition is a great way of losing weight and staying healthy. But if you are always putting yourself in occasions or places of spending, the flood of information can drown you in a sea of visual illusion, make your “Spidey” senses tingle and encourage you to simply throw financial caution to the wind.

“What visual illusion,” you say. Let me give you an example.

A long time ago, I bought a respectable piece of luggage that I needed for P1,400 at a mall. A few days later, I saw the same piece of luggage on a buy one, take one offer at a different mall. Almost at the point of being infuriated with myself, I asked how much the luggage cost. The store clerk told me it cost P2,800 under the buy one, take one offer. Big sigh of relief! But imagine how much I would have really been infuriated if the events happened in reverse. I could have ended up spending 100 percent more for an extra piece of luggage I did not need.


Now not all sale offers are illusions. But to be safe, why not lower the chances of breaking your budget. Avoid occasions or places where spending is employed and you will end up not being annoyed with a budget in which cash is devoid.

If you want to learn more about how people behave with their money as well as effective cash, debt, risk and wealth management, please visit There are more free resources there for you to benefit from. You may also attend EnRich™ personal finance training on Sept. 28, 2013, in Baguio City, Oct. 26, 2013, in Pasig City and Nov. 9, 2013, in Davao City. Details for EnRich™ may be found in the website.

(Efren Ll. Cruz is a Registered Financial Planner of RFP Philippines, personal finance coach, seasoned investment adviser and bestselling author. Questions about the article may be sent by SMS to 0917-5050709 or emailed to [email protected] To learn more about the RFP program, attend a FREE orientation on Oct. 3, 7 p.m. at the PSE Center. E-mail [email protected] or text <name><e-mail><RFP> at 0917-3464126 to register.)

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TAGS: “The Definitive Book of Body Language”, Allan Pease, American, Barbara Pease, Budgeting, calculators, Eiffel Tower, Filipino, money
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