The Real Cost of Living

Every decision – from buying a home to grabbing a latte on the way to work – has costs and benefits, personal and financial.  In her new book The Real Cost of Living; Making the Best Choices for You, Your Life, and Your Money, Carmen Wong Ulrich shows us how to make better decisions, and to realize that most decisions that involve money are not about money at all. Among the questions she asks and examines are the following:

  • Is deciding whether to go back to work full-time after you have a child really all about money? Should it be?
  • Is prepaying a mortgage a smart money move, or is it really about wanting security and stability, and freedom?
  • How much do your bad habits really cost you? Is saving thousands of dollars enough motivation to get you to quit?
  • Are college degrees really worthwhile? Is it worth it to you personally to be in a field you love, earning $40,00 a year while paying off $150,000 of student loans?

All of the chapters are eye-opening in terms of the real costs of living. The author has a sense of humor along with the good and bad news, and gives it to us straight. She explores the real costs of owning a home, going to college, marriage and divorce, raising a family, bad habits, saving, and investing. What sets her apart is her seamless discussion of financial costs and benefits along with personal costs and benefits.

Probably one of the most practical chapters is “The Real Cost of Credit Cards.” She explains the cost of credit in terms of actual interest fees and also the cost of not investing or saving the money you are using to pay off your cards – effectively a loss of income. To lower the cost of credit cards, she recommends

  • Get out as soon as possible. The sooner you can get rid of your balance, the better. ALWAYS.
  • Maintain a high credit score. Usually translates to lower interest rates and also gives you the freedom to…
  • …Surf your balance. Transfer high-rate balances to lower-rate cards, but consider the balance transfer fees in deciding whether this is a good move.

This is a good book for anyone making personal and financial life decisions -which is practically everyone over 15. As the author says, “we have discovered that having more money may not bring more happiness, but knowing what really will make you happy can be worth any cost.”