Thomas Gilovich

Gary Belsky

Lessons from the New Science of Behavioral Economics

Why Smart People Make Big Money Mistakes--and how to Correct Them

Fabian Beiner

Think of it this way: If you have $200 cash in your pocket and you pay $100 for a belt, you experience the purchase as cutting your pocket money in half. If you charge that belt, though, you don't experience the same loss of buying power that emptying your wallet of $100 brings. In fact, the money we charge on plastic is devalued because it seems as if we're not actually spending anything when we use the cards. Sort of like Monopoly or Sims money. The irony, of course, is that the dollar we charge on plastic is actually more dear, inasmuch as it costs an additional fifteen cents to spend it—15 percent or so being the typical interest rate for such borrowing.

Why Smart People Make Big Money Mistakes--and how to Correct Them quotes

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