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?
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.