Without a doubt, humans are emotional creatures. You could even argue that we’re drawn to negative behaviors. A large part of becoming better and more efficient with managing your personal finances is to work to control and tame that emotional behavior.
The first step in that process is understanding your blind spots and recognizing tendencies that could be working against you. Your actions and subliminal decisions can have a tremendous impact on your financial situation. In this episode, we address 3 Behavioral Finance Phenomena That Impact Your Finances, and we give you a guide to restore order to financial chaos.
We Will Uncover:
- How buying one item may force your judgment to make you believe that you need to buy three additional items to “complete the package.” (The Diderot Effect)
- How you can face the burdens to get your financial house in order by addressing the basics proactively, and why you spend more time focusing on the things that you have not done rather than the completed items you have already taken care of. (The Zeigarnik Effect)
- How the things that you focus on the most are often the last things you should worry about. Find the 20% of items that are your biggest challenges financially and address them first. The other 80% of items often do not matter as much. (The Pareto Principle)
Tune In and Go Beyond Common Sense with the Money Guys
This show would not be what it is today without the support of our wonderful listeners. We strive to continue making the show better and your feedback is an important part of that process.
If you have any questions/suggestions/comments/concerns (or just want to say hi!), feel free to reach out to us: brian [at] money-guy.com and bo [at] money-guy.com. You can also join the conversation on Facebook or connect on Twitter @MoneyGuyPodcast.
If you enjoyed this episode, be sure to join our community! You’ll get immediate access to 15 of our most recent shows, plus you’ll get future podcasts delivered straight to your inbox so you can get in on the action right away.
