9 “We are taking the pain of paying away completely.” Dan Ariely’s most recent book provides us with the practical tools we need to understand and improve our financial choices, save and spend smarter, and ultimately live better. expensive item, he said. If you are in the market for a ski jacket that costs $1,015 and the cashier tells you the exact same item is $1,007 just three blocks away, you are more likely to stick with the pricier item, and this is illogical. Money is absolute. At the end of the day, you have eight dollars more or less, said Ariely. The pain of paying For the second misconception of money, Ariely asked the audience, what would hurt more, paying for dinner with cash or credit card? Many people experi- ence actual pain when paying for something. This psychological concept is called “pain of paying” and has to do with humans being loss-averse. Credit card purchases are less painful because plastic is less tan- gible than cash. The loss of money is less visible and the payment is deferred. The same is true for new payment methods; think for example about the new “Amazon go” stores, explained Ariely: He asked if this is the direction we want to go as a society, particularly thinking about issues like energy consumption or private debt: it is hard enough to think about the involved trade-offs (as we experience today) but making payments invisible will make it even harder to make good decisions about money. How to spend smarter In his closing statement, Ariely recapped his opinion that money is about using it well to make ourselves happy. With his unusual lecture on such a common subject, he left the audience with a lot to reflect on. Many attendees will probably think twice before using plastic money the next time. DIALOGUE & EVENTS Public lecture with Dan Ariely, paying with pain.