MAKING BIG DECISIONS ABOUT MONEY

We're bad at it. And marketers know this.

Consider: you're buying a $30,000 car and you have the option of upgrading the stereo to the 18 speaker, 100 watt version for just $500 more. Should you?

Or perhaps you're considering two jobs, one that you love and one that pays $2,000 more. Which to choose?

Or...

You are lucky enough to be able to choose between two colleges. One, the one with the nice campus and slightly more famous name, will cost your parents (and your long-term debt) about $200,000 for four years, and the other ("lesser" school) has offered you a full scholarship.

Which should you take?

In a surprisingly large number of cases, we take the stereo, even though we'd never buy a nice stereo at home, or we choose to "go with our heart because college is so important" and pick the expensive college. (This is, of course, a good choice to have to make, as most people can't possibly find the money).

Here's one reason we mess up: Money is just a number.

Comparing dreams of a great stereo (four years of driving long distances, listening to great music!) compared with the daily reminder of our cheapness makes picking the better stereo feel easier. After all, we're not giving up anything but a number.

The college case is even more clear. $200,000 is a number that's big, sure, but it doesn't have much substance. It's not a number we play with or encounter very often. The feeling about the story of compromise involving something tied up in our self-esteem, though, that feeling is something we deal with daily.

Here's how to undo the self-marketing. Stop using numbers.

You can have the stereo if you give up going to Starbucks every workday for the next year and a half. Worth it?

If you go to the free school, you can drive there in a brand new Mini convertible, and every summer you can spend $25,000 on a top-of-the-line internship/experience, and you can create a jazz series and pay your favorite musicians to come to campus to play for you and your fifty coolest friends, and you can have Herbie Hancock give you piano lessons and you can still have enough money left over to live without debt for a year after you graduate while you look for the perfect gig...

Suddenly, you're not comparing "this is my dream," with a number that means very little. You're comparing one version of your dream with another version.