The impact our behavior and motivations have on our financial decisions is the focus of The Real Cost of Living by Carmen Wong Ulrich. Ulrich, who has a degree in psychology and was the former host of CNBC’s On the Money, says she sees money differently because she was not trained in the profession:
Economics has finally recognized that we are not rational creatures; we’re not all about the accounting. Behavioral economics, the study of the neuropsychology behind how we behave with our money, has won Nobel Prizes. But it’s also about time – especially for those of us in personal finance – to realize that there is a lot more going on than money when it comes to making decisions about our money and our lives.
What spoke to me the most was the chapter on the real cost of bad habits. Ulrich says the cost of being a caffeine nut can cost $115,200 over your lifetime. Obesity has a negative impact on income via wage discrimination at work. Smoking takes a toll, too. Almost $97 billion is spent on healthcare due to smoking each year, Ulrich writes.No wonder vaping has become the trend now since it may be a healthier alternative and is one way to take baby steps on actually quitting smoking. Check out this DAVINCIVAPORIZER.COM
The book relies heavily on anecdotes, which makes for an easy read. In the chapter where Ulrich dissects the real cost of credit cards, she writes about a woman named Kim who was in a downward spiral of credit card debt. Kim was on assignment to manage her finances with Ulrich as part of her job as a blogger for Glamour magazine.
The real cost of Kim’s credit card debt was not just the interest and fees she was accumulating, but the toll it was taking on her life. Although Kim was newly employed, engaged and thinking of starting a family, her poor financial decisions were setting her back. Kim had been sued twice for credit card debt and had four credit cards in collections.
If you’d like to find out what the real cost of living is, comment by Friday, Mar. 18, 2011 at 9 a.m. PST for a chance to win my review copy. If you can’t wait to get your hands on Ulrich’s book, you can purchase it on Amazon for $10.58. Buying it through Amazon supports BargainBabe.com.