Chris Zadeh & Angelique Schouten, Forbes
Have you ever made a decision about your finances that was driven by emotion, rather than logic?
Maybe, as a teen, you bought clothes you knew you couldn’t afford just to fit in with the ‘cool’ kids. You might have taken out a loan to cover the cost of tuition and spent it on the best laptop you could find. Perhaps you borrowed some money for a home repair despite having the funds right there in your savings account because it seemed far less painful than watching your balance drop.
If so, you’re not alone—virtually all of us have made irrational choices like these over the course of our lives. Why? It’s simply part of being human.
We all know that humans are complex thinkers, but the structure of our consciousness is actually quite simple. There are two parts: the Shin and the Yi. The former comprises our state of mind—passions, emotions, and other intense feelings, like affection. The latter refers to our intellectual side: our thoughts, ideas, opinions, efforts to make meaning from our experiences. More often than not, the Shin and Yi are in conflict with one another, fighting for our attention. Unfortunately, reason is rarely a match for emotions in most areas of our lives, and with money issues in particular.
We are all grappling with the Monkey Money Mind, a hybrid of two concepts: the psychological influences on our financial decisions, combined with the Buddhist concept of the monkey mind—the restless, unsettled presence in all of us that creates doubt and causes us to second-guess our decisions. No one is immune to the Monkey Money Mind’s incessant chatter—not even the world’s greatest financial gurus.
Unfortunately, it makes it difficult to distinguish the rational from the emotional when it comes to money matters, causing distractions that threaten to thwart our success. The Monkey Money Mind is always seeking instant gratification. So, while you likely know that you need to save for the future in order to retire well, you may feel the urge to splurge on expensive dinners or even a new car—something that will bring you pleasure in the present but do little for you later on.
None of us can tune out the Monkey Money Mind completely, but the good news is, we can take steps to limit its impact.
When we examine our very human tendency to act irrationally, using well-established scientific and psychological principles, we can override our primitive predisposition to make poor financial choices with behavioral and technological strategies. The result: a fiscal future we can be proud to call our own.
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