June 28, 2019

Episode 58: Cognitive Biases & How they affect our money and spending Part 5 of 6

This episode is part 5 of our 6-part series on Cognitive Biases and how they impact us and our money each and every day! (Make sure you check out part 1, part 2, part 3 and part 4 if you haven't yet)

It’s important to know what these are because they are impacting the way you make decisions and the way you think about your finances every single day.

In this episode, Coach Kelsa discusses how the Negativity Bias is impacting the way we define ourselves with money, our desire to make lifelong changes and the way we see our past decisions with money.

In this episode you will learn:

  • The Negativity Bias - what it is and how it’s being used to affect my  decision-making
  • How this shows up on a regular basis for us
  • How it impacts the way we feel about money and ourselves as money managers
  • How we can overcome this bias
  • The impact of the Negativity Bias on marriage: https://www.fatherly.com/love-money/how-to-prevent-negativity-bias-from-running-your-marriage/

How to overcome the negativity bias:

  • Solution 1: Positive self-talk: “The single most important underlying factor is….how we talk to ourselves about our experience.” Value all the good and positive aspects of your life so that you are not overcome by the negative. Talk to yourself as if you were talking to a friend.
  • Solution 2: Avoid over-analyzing by not overthinking decisions you’ve made. We can always find fault or imperfections. Instead, try creating a playlist of music that makes you happy or read a good book when you find yourself beginning to overanalyze.
  • Solution 3: Try to look at decisions and ask yourself “What did I do right and what will I repeat next time?” and “What would I like to do differently next time?”
  • Solution 4: Focus on the idea that our money is something we should be curious about- we should experiment and try new things and challenge ourselves. Our goal is to make progress and not be perfect.

Resources:

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