Singletary

Ariely is a professor of psychology and behavioral economics at Duke University. Kreisler is a comedian and writer whose funny asides provide muchneeded levity on what can be a dense topic.

What the two authors do brilliantly is take behavioral economics and make it really accessible. I was captivated by the analysis of our flawed thinking. The authors spell out why so many of us make foolish money decisions. Then they show us how to rethink what we often get wrong.

And the struggle isn’t just about our own irrational behaviors, “it’s against systems designed to exacerbate those flaws and take advantage of our shortcomings.”

Take bargain shoppers for example. They are so proud of their sale-finding skills. I used to pride myself on my own deal-hunting ability until I realized I was the prey. Sales are bait, and you have to keep in mind that you never save when you spend.

Consider these two points from Ariely and Kreisler:

• “When we see a sale, we shouldn’t consider what the price used to be or how much we’re spending. Rather we should consider what we’re actually going to spend. Buying a $60 shirt marked down from $100 isn’t ‘saving $40.’ It is spending $60.”

• “Discounts are a potion for stupidity. They simply dumb down our decision-making process. When an item is ‘on sale,’ we act more quickly and with even less thought than if the product costs the same but is marked at a regular price.”

Did you know that studies using neuroimaging and MRIs show that paying stimulates the same brain regions that process physical pain?

This explains why we are so susceptible to painless paying.

“Modern life has given us endless financial instruments, such as credit cards, mortgages, car payments, and student loans, which further — and often purposefully — obscure our ability to understand the future effects of spending money,” the authors write.

Pain helps you pause. With delayed or monthly payments, we often don’t consider the future effects of our expenditures. But when we use cash, we immediately feel the pain.

If you don’t want to use cash, “punch yourself every time you spend money so you really feel it,” joke Ariely and Kreisler. But they add that this isn’t a “sustainable financial plan since eventually the medical bills will catch up with us.”

Seriously, if you don’t become more mindful about how and why you make the decisions you do, you’ll continue to make irrational choices. You’ll always be in debt. You’ll struggle to handle financial emergencies. You won’t have room in your budget to save for retirement.

I’m hosting an online discussion about “Dollars and Sense” at noon on Dec. 7 at washingtonpost. com/discussions. Kreisler will join me to answer your questions on how to spend smarter. Bring your sense of humor, because Kreisler is hilarious. Readers can write to Michelle Singletary c/o The Washington Post, 1301 K St., N.W., Washington, D.C. 20071. Her email address is michelle.singletary@ washpost.com. Follow her on Twitter (@ SingletaryM) or Facebook (www.facebook.com/ MichelleSingletary). Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writer’s name, unless a specific request to do otherwise is indicated.

The solution to your money troubles is to think more. You’ve got to delve deeper into the mind games being played against you and guard against the things you tell yourself that lead to money mistakes and your financial mismanagement.