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Cover Credit: Authors Dan Ariely and Jeff Kreisler | Publisher: HarperCollins

In full disclosure, Dollars and Sense was provided to us for review by a HarperCollins representative, however, we received no monetary compensation. The following opinions, poorly written or unorganized as they may be, are mine and mine alone to have concluded.

  1. Could we live on 80 percent of our current income?
  2. Could we give up 20 percent of our current income?

The answers to these questions should be exactly the same. They are mathematically, economically, and supercomputerly the same question. We are, however, much more likely to say yes to question 1 than to question 2. Why? Because question 2 highlights the losss aspect of the situation–losing 20 percent.”

If you want to learn about the psychology behind why you and I make so many dumb decisions when it comes to spending and (not?) saving money, you should read this book. In another painfully accurate scenario, the book points out the illogicality of driving for miles to save a few cents on gas — an action I perform almost weekly — but not investing near the same amount of analysis into shelling out $5+ for artisanal coffee after filling up — an action improperly account for opportunity cost in at least monthly.

For those of you who still fail to see the disconnect here: the average gas tank holds 12 – 15 gallons. Let’s assume your car skews towards 15-gallon because you’re a Twitter Baller. That means to “pay” for your $5 cup of coffee you would need to find a gas pump that is .34 cent cheaper to justify your next completely irrational drive around town to find “cheap” gas.

Good luck with that.

This, and many scenarios like it, are demonstrated by Dan and Jeff throughout the book without being in your face about it. In fact, many of the Dollars and Sense lessons are delivered with levity to, I assume, make it easier for you and I to digest the idiocy of our actions when it comes to money.

30 percent of Americans are so far behind in saving for retirement that they will have to work until they’re eighty. Average life expectancy is..seventy-eight.”

Like an ill-advised unsecured loan, some of us won’t be able to enjoy the first 24-months of heaven while we work off retirement debt owed back on Earth. I hope St. Peter offers sentence reductions for good time served?

While reading another analogy from the book, I was reminded when I unofficially set out to break the Guinness World Records for additional miles driven after your “Check Engine” light came on. Each day I started my engine and seconds later that little menacing yellow light would glare judgingly up from my dashboard. And each day in my head — with no plausible justification for my lack of rationality other than my own active imagination — I would think of worse and worser case scenarios that all ended in me having to pay some insurmountable repair cost if I ever bothered to take my car into the shop.

So, I never did.

This didn’t just go on for a few days, by the way. We’re talking whole years passed where the fear of a basic diagnostic check kept my car and I idling mile after mile on the highways and byways of the Great State of Texas. To put this in context, I was more content with my car possibly blowing ALL THE WAY UP before I would dare pay to let a professional tell me how much it would cost to turn a light off until my inspection sticker finally expired. I knew I wasn’t going to be able to pass so I reached the only logical conclusion: begging.

Before the review began, I cornered the inspector and threw myself on the inspection tag mercy court. Unphased by my pleas, having apparently seen a long line of idiots like myself and the ones anonymously outlined in Dan’s book, Mr. Inspector asked a simple question, “What year, make and model and miles are on your car?”

After I told him the car was 12-years old with 180,000+ miles, he identified the solution that had both haunted me for the last 36+ months of my life without even looking up from his clipboard…

“You need a new gas cap.”

Yes, friends. Thirty-six-plus-months, $10, one new gas cap, and 2-minutes later, my Check Engine light turned off…

There Is No Limit to the Effort People Will Make Just to Avoid Thinking

The truth is, making bad money decisions is a hallmark of humanity. We’re fantastic at messing up our financial lives.”

Without guilt-tripping, the book covers why we make so many poor financial decisions so frequently, freely, and often in our lives by using such age-old tricks as “mental accounting” and “emotional accounting” to justify purchases, spending, and financial habits that are frankly, unjustifiable. By tackling everything from credit cards, to budgeting, to the side-hustle economy of Millennials, Uber and other businesses, Dollars and Sense artfully paints a picture of a world that increasingly capitalizes and preys on our naturally poor financial instincts — instinctively, spending money feels emotionally and physically rewarding to us — by making it increasingly difficult to make smart personal financial decisions while making it quicker, easier, and more efficient to separate us from our money under the guise of electronic convenience.

Critics claim that the rise of the sharing economy is the by-product of a labor market providing no full time jobs, few benefits, and little security, that it rolls back worker protections and takes advantage of the “free-agent nation,” which itself is another term designed to help us feel better about underemployment.”

The Millennials shall inherit the Earth but is it a financial frontier we want to be responsible for anymore? It’s a brave new world, yet 2 out of 3 of us are still too scared to make a basic household budget.

One interesting survey even found that 46 percent of financial planners don’t have retirement plans themselves.”

Accurately demonstrated throughout Dollars and Sense with multiple stories, studies, and citations reinforcing one simple thematic point: spending money feels so good we are willing to spend more and with less responsibility as the distance — even if only electronically or plastic (credit & debit cards) — between us and our money increases.

Sometimes the hardest step to fixing a problem is first acknowledging the problem exist.

What does this mean for us, our personal finances, and the future? The book illustrates a stark but hopeful future if our increasing financial awareness leads to an equal increase in personal accountability. “Past performance is no guarantee of future success,” per the book and investment broker brochures everywhere, so hopefully past financial missteps are no guarantee of continued failure for our generation either.

Conclusion

I usually have closing thoughts for these book reviews but in this instance, the book says it best. I believe you can spend less than you earn, or earn more than you spend by putting the “personal” back in personal finance. If you don’t like my motto, that’s fine. I’ll end with this better quote from the book:

We could wait for societal or governmental interest to put programs in place to protect us from our own foolishness. Or we could become more aware of our limitations, design personal systems to correct ourselves, and take control of our financial decisions so that our precious, finite, and immesurably valuable lives can grow richer every day.”

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