Does Dollars and Sense Grow Cents?

Fluffster the golden retriever smiling like mad

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Dan Ariely has a knack for helping us understand ourselves as humans and delivering science in an approachable way. Probably best known for Predictably Irrational, a well-named tome about how humans behave irrationally (but in a predictable way), Ariely is a professor of psychology and behavioral economics. Basically, him writing a book about humans and money was bound to happen one of these days!

This time around, Ariely teamed up with Jeff Kreisler, a comedian and writer. The tone of the book did seem noticeably different and written in a lighter way. Dollars and Sense, as a result, comes across as even more approachable to the casual reader.

There’s a little something for everyone in Dollars and Sense, but it seems most applicable to someone fairly new to thinking about personal finance, or to someone who has struggled to stick to budgets and saving.


Dollars and Sense is largely written around stories, where there is a main character, and where that main character makes irrational money choices that are later explained. I couldn’t help but wonder “okay, but how do we get better??” at the end of most chapters.

While there is a more “how-to” chapter at the end of the book, the primary focus of Dollars and Sense is to teach us how to recognize patterns and principles around our human relationships with money in order to gain awareness.

As they say in the book:

financial literacy lessons…tend to fade quickly, with almost zero long-term impact in our actions.

In a lot of ways, this book encourages a mindful relationship with money. It focuses on understanding ourselves, how we spend, and our values.

Favorite Lessons from Dollars and Sense

There’s a ton of great content, including discussion about things like the sunk cost fallacy (my favorite), the following lessons are the biggest takeaways I personally had from Dollars and Sense.

Get Real

As part of the book, Ariely and Kreisler talk about a savings study in Kenya. There were a number of experimental conditions, such as reminder text messages (written to look like they came from a participant’s child), a coin with numbers on it that participants were told to track savings on, and finally a straight up economic incentive of a savings match of 10-20% (up to a certain amount) each week.

The most effective? I’ll give you a hint: not the economic incentive, and not the imagined pleas of children. Yep, the coin (about twice as much as the control condition, in fact)! Ariely and colleagues posit that the physical coin (that participants were told to keep in a prominent location) simply reminded participants to save more often. Of course, it doesn’t have to be a coin. Any sort of tangible tracker would likely have the same effect. Might I recommend taking the Zero Day Challenge or getting creative and making your own beautiful visualization like this one from Bitches Get Riches?

Compare Things to Things

Money is so weird. It’s quantifiable, but in the end meaningless. Think of how you assess the value of, say, a car. Your mind immediately went to comparing one type of car to another type of car, didn’t it?

Try to start thinking of expenses compared to other expenses to give more perspective. Take a shiny new car. What if you said, “Huh, so the shiny new car costs the same as a used car plus a semester of college for my kid and an extra year of working before retirement”?

I think this lesson is a big reason why Your Money or Your Life (YMOYL) resonated so much for the Financial Independence, Retiring Early (FIRE) community. YMOYL forced people to look at spending in terms of time, not a meaningless number.

Why You Gotta Go and Make Things so Complicated?

Grrr mortgage brokers. Interest rates, closing costs, points, PITI, pro-rated vs. amortized…it’s complicated on purpose. It’s not you, it’s them. So many systems are designed to be mystifying because the industries profit from our confusion.

Notice a new pricing strategy from a company (especially if there are any kind of “points” involved)? Be skeptical. Believe me, things like mortgages could be made simple if the banks wanted that. But they don’t, because there’s money in complications.

Don’t fall for it! Keep calm and carry on. When in doubt, think like an engineer.

Ulysses Contracts

The perfect addition to any subject that might have the reputation of being dry or hard to understand? Greek epic poems, of course!

In Homer’s The Odyssey, Ulysses ensures he’s unable to give in to the temptations of the sirens by having his crew tie him to the ship’s mast.

For many people, pre-committing to a type and quantity of savings is a major boost. Sure, you can call this “paying yourself first,” but that’s not nearly as poetic. Tanja and Mark from Our Next Life are big believers in “unbudgeting” by automating savings, and have done a fantastic job with it  by retiring at 38 and 41.

This lesson, of course, assumes your income is higher than basic “roof over head and food in belly” expenses.

Reward Substitution

How can you reach long-term financial stability when short term gains like dinner out are so tempting? Reward substitution is the idea that you can substitute a smaller reward now to make you more likely to work towards long term goals.

Ariely, for example, had to go through an excruciating treatment program for Hepatitis C. So gruesome were the side effects that Ariely was actually the only one in the FDA protocol group to fully comply with the medication regimen. How? He made each night an event by renting movies. He loves movies but never has much time for them, so by having a double or triple feature each night he had to take his medication, he connected something really positive to the injection, making him more able to power through the hours of nausea each time.

If you give yourself a more immediate, tangible reason to work towards a long-term goal, it’s easier to actually follow through. In a lot of ways, reward substitution works perfectly with the next lesson of rituals.


Eating a chocolate bar in a certain way is better than just eating a chocolate bar. We humans be ritualizing, am I right? This was an interesting takeaway for me, as I don’t have a lot of ritual in my life. I’m an atheist and don’t even celebrate Christmas. And the last time we splurged for fancy baked goods? Yep, totally snarfed those down. #fail.

The real power in this lesson is that you don’t have to spend more money in order to feel extravagant or give yourself a reward. When you splurge, make it count. Turn it into a ritual that you look forward to.

I’ll have to keep ya’ll posted on how we ritualize our lives. The one big ritual we have now is going out once a month for a fancy dinner, but there are so many other ways we can squeeze some extra happiness out of our lives for no added cost.


Did any of these lessons stand out to you? Have you read Dollars and Sense, and do you have any more takeaways? How do you save? Do you have any rituals that keep you happy and wealthy and wise?

Fluffster the golden retriever smiling like mad
Fluffster fully endorses Dollars and Sense too

6 thoughts on “Does Dollars and Sense Grow Cents?

  1. I’ve haven’t checked the book out yet, but thanks for putting it on my radar. We can’t talk enough about sunk costs. I think that’s a big hangup for a lot of people (hi!) as to why we hang onto things (tangibles or habits or anything, really!) that no longer serve us.


    1. I actually never thought about the sunk cost fallacy playing a part in why it’s so hard to declutter and get rid of things, but you’re totally right! “But I spent $100…”

      Happy reading — and let me know what you think ?


  2. Ok THIS is fascinating. And exactly the kind of financial read I’m looking for. I’m already good at money, I know how it works. But the psychological side of money management? The unpredictable quirks of how human minds work around money? I feel like that’s the way to truly level up in your financial journey. Thanks for sharing! Looking forward to reading the book.


    1. Right??

      I’m such a sucker for anything to do with psychology, but especially psychology and $$ (ooo, or sex!), so I’ve clearly got to read more behavioral economics.

      Also I’m in contact with Kreisler about a blogger meetup next time he’s in the Boston area (started on Twitter where I @’d you), and he loves your blog name. Little does he know that the epic name is just the tip of the iceberg (at least until I write back and tell him anyway ?)!


  3. Thank you for the mention, my friend! And ohmygosh, YES. Reward substitution is one of several secrets of our success. We made sure to reward and toast our little milestones along the way on our FI journey, rather than do some big splurgy thing because we felt we deserved it. So we might crack open a bottle of champagne on a weeknight after hitting some round number, which sounds extravagant, but it was way cheaper than the trip to Vegas we might otherwise have been inclined to take. 😉 Hahaha.


    1. Of course! ?

      As I was reading and going over my notes, I kept thinking of all the amazing people I knew who were putting the concepts to good use.

      That’s awesome that reward substitution really resonated with you, too! Another really interesting thing about the book is that the lessons can apply to more than just money. I actually might put out something tangible in our living room to remind me to be good to myself and exercise, for example. ?


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