Dollars and Sense: How We Misthink Money and How to Spend

Dollars and Sense: How We Misthink Money and How to Spend Smarter [PDF / EPUB] Dollars and Sense: How We Misthink Money and How to Spend Smarter Blending humor and behavioral economics the New York Times best selling author of Predictably Irrational delves into the truly illogical world of personal finance to help people better understand why Blending humor and behavioral economics the New Sense: How PDF/EPUB Ä York Times best selling author of Predictably Irrational delves into the truly illogical world of personal finance to help people better understand why they Dollars and Kindle - make bad financial decisions and gives them the knowledge they need to make better ones Why does paying for things often feel like it causes physical pain Why does it cost you and Sense: How PDF/EPUB ¾ money to act as your own real estate agent Why are we comfortable overpaying for something now just because we've overpaid for it beforeIn Dollars and Sense world renowned economist Dan Ariely and Sense: How We Misthink eBook ¿ answers these intriguing uestions and manyas he explains how our irrational behavior often interferes with our best intentions when it comes to managing our finances Partnering with financial comedian and writer Jeff Kreisler Ariely takes us deep inside our minds to expose the hidden motivations that are secretly driving our choices about moneyExploring a wide range of everyday topics from credit card debt and household budgeting to holiday sales Ariely and Kreisler demonstrate how our ideas about dollars and cents are often wrong and cost usthan we know Mixing case studies and anecdotes with tangible advice and lessons they cut through the unconscious fears and desires driving our worst financial instincts and teach us how to improve our money habitsFascinating engaging funny and essential Dollars and Sense is a sound investment providing us with the practical tools we need to understand and improve our financial choices save and spend smarter and ultimately live better.

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  • 14 September 2016

13 thoughts on “Dollars and Sense: How We Misthink Money and How to Spend Smarter

  1. says:

    What’s not to like when the co author of this book describes himself as “just another Princeton educated lawyer turned award winning comedian author speaker and advocate for behavioral economics”Here are my two take aways from this book#1 I’ve been misthinking about money Yikes This book has immediately changed the way I think about how I spend money—and I’m not a spender#2 Besides being well researched and very practical this book is hilariousFifty pages in I started marking the funny lines with an exclamation point No joke my well underlined pages include than 100 exclamation points LOLTHE BIG IDEA “this book is about the odd wild and yes completely irrational ways we approach spending decisions and about the forces that cause us to overvalue some things and undervalue others”After laying out a very convincing case Dan Ariely the professor and Jeff Kreisler the funny guy invest their final five chapters on how to “build on the shoulders of flawed thinking” Insightful ideasExamples of flawed thinking “Some people go on a 10000 vacation but spend twenty minutes each day looking for free parking” JCPenney’s short lived CEO Ron Johnson “paid a high price for failing to understand the psychology of pricing” when he instituted “fair and suare” pricing and eliminated “sales bargains coupons or discounts” “Had Albert Einstein been an economist rather than a physicist he might have changed his famous theory of relativity from E MC2 to 100Half Off of 200” According to “loss aversion” research when doctors frame survival options as “there’s a 20 percent chance of survival” you’ll go for the remedy But people decline the option when framed as “there’s an 80 percent chance of death” Flawed thinking On “investing effort” Ariely and two other researchers dubbed one money phenomenon “The IKEA Effect—so named after the meatball restaurantumlaut factorychildren’s playland that moonlights as a furniture store”The chapter “We Lose Control” begins “Rob Mansfield will be able to retire shortly after pigs fly” With little or no retirement savings—many are thinking they must work until they’re 80 “even though our life expectancy is 78” Why the flawed thinking Making sense of the IRS and IRAs and 401ks and 403bs “can be intimidating and confusing It’s like trying to think of another word for ‘synonym’ or what the best thing was before sliced bread”ButI’m way ahead of myself One of my favorite “Wall Street Journal” columns several Saturdays each month is “Ask Ariely” a &A feature by Dan Ariely professor of psychology and behavioral economics at Duke University and founder of the Center for Advanced Hindsight and he’s not the funny guy The uestions are practical and his answers are research based So when this book was published in November I bought it and it’s already on my hot list for Top 10 books of 2018What changed my thinking about money Check out the chapter titles in the section “How We Assess Value in Ways That Have Little to Do With Value” We Forget That Everything Is Relative We Compartmentalize We Avoid Pain We Overvalue What We Have We Worry About Fairness and Effort We Believe in the Magic of Language and Rituals We Overvalue ExpectationsI highlighted about a zillion one liners and concepts “No one ever went broke underestimating the intelligence of the American people” HL Mencken “Don’t believe everything you think” “We stand on the shoulders of giants even if those giants are the giant mistakes we ourselves have made” In the commentary on confirmation bias a restaurant consultant notes that the highest priced items on a menu “actually generate revenue by getting people to buy the second highest priced items”By the way don’t put too much stock into fairness and effort in your money calculations Apparently we’re willing to pay when we see the effort someone has put into a product or service—but bristle when a locksmith unlocks a door for us in a minute—but charges 200 More flawed thinkingAnd when asked how much work a husband and wife do around the house researchers have found it adds up to over 100 percent The authors warn against borrowing the PowerPoint progress report from work to document progress on household chores “Or should we just make a lot of deep sighing sounds—so our spouses will value us ”Would you pay for a cheeseburger described thusly “Artisanal goat fromage graces hand crafted grass fed bovine composite with heirloom vine ripened ‘tomate’ curated greens and special reserve spice blend parsed for variance by expertologists” Most willThere’s “The leading practioners of language manipulation may be winemakers” Copy writers read Chapter 10 on the magic of language All together now sing the Big Mac jingle “Two all beef patties special sauce” What was the “Mona Lisa” painting worth before July 1911 “In August 1911 it was stolen from the Louvre While the authorities tracked it down there were suddenly huge lines of visitors waiting to view the empty space where the painting had hung” What’s it worth today “About 16 percent of NFL players file for bankruptcy within 12 years of retirement despite average career earnings of about 32 million” Comparing apples to oranges—turns out—is very helpful “What’s hard is comparing apples to money” Flawed thinking twists how we value an apple On the illusion of wealth “In one set of experiments when we gave people a salary of 70000 but framed it as hourly earnings of 35 an hour they saved less than when we defined it as a yearly sum of 70000” “We react differently to ‘Oh this coffee is 4 a day’ than to ‘Oh this coffee is 1460 per year’” To save for the future we should manage our money with our “future self” in mind “Maybe our pay stubs or credit cards should have a picture of our face morphed to look older”Who should read this book Parents grandparents students co workers and anyone who buys or sells anything Did you know that the first price you see or previous prices you’ve paid influences your future purchases see the must read section on anchoring—you won’t believe the researchI hope you buy this I can’t stop talking about this book or dropping in the witty one liners in almost every conversation

  2. says:

    Dollars and Sense is an excellent book that helps readers explore their relationship with money and why they have the spending habits they have A good 23rds of the book is dedicated to uncovering the behaviors behind our spending habits and showing people how to recognize those behaviors The last 13rd of the book is focused on possible solutions and changes we can make to be better spenders of our own money I recommend this book if you want to understand your own spending habits

  3. says:

    This book features a nice mix of humor cognitive biases and personal finance It was easy to read and it is broken into short chapters that are easily digested The chapters seemed to each focus on one common error we can fall into with money offering many good illustrations and approaching the problems from new perspectivesThe book's strength was how accessible it made complicated ideas the endowment effect confirmation bias and and how it kept me entertained It did a good job of highlighting ways that the reader or her friends may struggle with money so it may be educational if you are not very familiar with cognitive biases and common ways our minds fool us On the downside the book was light on practical ideas for how to overcome those errors Overall this was an entertaining read that was informative in parts but it could have done far to help readers find fixes for their own lives

  4. says:

    Dan has been my irrational master during the last 4 years so whatever I say won't be objectiveHis studies had helped me to make better decisions everyday based on what is important for me and not for the aceptance of others This book is as good as the others but with updated insights about purchasing behaviours and experiential investments The stories shared increase the spicy tone of the teaches I'm pretty sure these come from JeffIf you want to learn about your own traps everytime you purchase something I recommend you to read this book and keep it next to you credit card your purse or your wallet

  5. says:

    Best book on why people me included make some bad dumb or just plain stupid money decisions Lots of good books on digging ourselves out But this one exposes our irrationality and the resulting land mines that the advertisers media etc use go get us to part with our money Purchased this book after reading this authors Honest Truth About Dishonesty which was also great even if embarrassing

  6. says:

    I think this had too many overlaps with his last books I didn't really think there was anything newI found his earlier books to be entertaining but that could be me not him

  7. says:

    I’ve always had uestions about my own money habits the psychology behind my psychology I can say with full confidence that Dollars and Sense has put my own perspective into perspective; I’ve been humbled and reassured that it’s never too late to take charge of money and personal psychology towards making finances work for you for a better life

  8. says:

    I read the Kindle version on my phone during breaks at work and I was interested rather than guilty or angry or confused This is a serious useful book with a sense of humor usually bad puns but the authors keep it moving I’m shopping for a new computer and I now have a better sense of how my values work or don’t when confronted with a Great Deal by a rabid salesman Worth the price and the time for reading

  9. says:

    Some three years ago I belatedly came around to reading Ariely’s original masterpiece “Predictably Irrational” Here’s verbatim the summary of my findings1 Among two offerings a merchant can reliably make us pick the one he prefers by sliding a “decoy” bad choice that is similar to the choice he wants to steer us to2 The first price we see for anything is the one we remember forever Get that high “anchor” in and you can sell anything at a high price and vice versa3 We are suckers for ambiencecontext We won’t just pay up for a product if a setting looks upmarket or is sold in an upmarket setting we’ll enjoy it too If something’s presented as expensive basically we are drawn to it almost automatically with a very notable exception4 We’re drawn to stuff even if it’s FREE FREE with an exclamation mark like Yahoo is a law unto itself5 We can’t deal well with mixing social norms and market norms We’ll do things for free that you could not possibly pay us to do Conversely if a price is put on something that has previously been rationed but free the magic is gone and we can’t go back to looking at it through the prism of social norms6 We can do some very stupid things when the “animal” inside us comes to the surface7 We simply don’t have it in us to delay gratification We’re not wired like that We have to find ways to trick ourselves to save for a rainy day toget medical checks etc8 We value stuff we own higher by dint of owning it Our house our stereo theatre tickets the lot It all goes up in our estimation because it’s ours9 We place immense value on keeping options open and waste disproportionate resources on keeping our options open relative to the potential benefit of exercising them10 When we think something will be good we end up liking it and when we think medicine will work it will end up working better11 In the same vein a 50 Cent Aspirin can do things a 1 Cent Aspirin cannot12 When nobody’s looking we all cheat but we don’t cheat too much lest we end up feeling bad about ourselves13 The removed we are from actual cash the less inhibited we are in our cheatingSmall Change covers exactly ZERO new ground but omits point #5 point #6 and points #12 Funnily enough that makes it a better book I guess the author has come to realise that nine of his thirteen points were about money So he got a very funny but impossibly lazy he could not even be bothered to dig beyond his personal experience for new storiesexamples co author to repackage those ideas and hey presto a better focused book is on the shelvesAlso a major beef of mine with psychologists is they have to get sex into everywhere a fact that makes it impossible to recommend their books to my mom or even to read their work on the tube With point #6 expunged this is indeed a book you can recommend to your mom and a book you can read in the tube with little risk of embarrassment Modulo the jarringly freuent invocation of a dominatrix throughout the text that isSo to all those of you who’ve never read Dan Ariely before you can now skip his original opus Buy “Small Change” instead supplement it with “The Honest Truth about Dishonesty” and be on the lookout for his upcoming work on social norms vs market normsOn the other hand if you’ve already read “Predictably Irrational” I can’t recommend buying this book Like myself you’ll feel robbed of your valuable reading time And of whatever not so small change you paid for it of course

  10. says:

    Interesting and very easy to read TBH the 'funny' comments from the co writer don't really work that well and I bet Dan could have written this without him and also maybe made it a bit shorter But very interesting especially if you have never read any other books by Dan or anything along the same lines If you spend too much money on stuff you don't use if you overspend when buying a car or want to know what price to sell your house etc you will get something out of it Also some good stuff about savings and pensions especially the point that we keep up with the neighbours in terms of their visible consumption but peoples savings and pensions are invisible so we see less peer pressure to do the same

  11. says:

    I’ve read and enjoyed two of the author’s other books but I found this stale and unoriginal by comparison There is very little reference to research and what there is has been covered in the other books The gap is filled with long anecdotes some contrived some purportedly true It’s hard to say which is the tedious

  12. says:

    It is an OK book but it can be a lot succinct and the humor does not work for me in most cases Predictable irrational is much better so I suggest you read this first

  13. says:

    not that great I was expecting from Dan Arielly at this time lots of things already said and repeated in other books

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