What drives your financial decisions?

What drives your financial decisions?

Festus Chuma 12:20 - 22.04.2024

There are psychological reasons behind every decision - even when it comes to money. Do you want to know what drives you or makes you shy away when it comes to finances? Here are some important psychological influences that determine how you deal with money! What is also your motivation behind your next sports betting odds


1. Too much emotion in financial decisions

Feelings can be deceptive. Emotions lead to impulse buying (greed) or, conversely, to panic behavior with funds and securities in times of crisis (fear). Deep-rooted fear of loss or the very human search for "quick money" can quickly push reason to the sidelines.

Investments (such as funds) are indeed associated with risks - you should always be aware of this. Emotional behavior, on the other hand, is often unconscious. So think carefully about why you want to have or get rid of something, whether it's a purchase or an investment.


●      One tactic has proven particularly effective in preventing impulse shopping: Take two or three days to think about your spending habits. Do you need those new sneakers?

●      Also good: get feedback on your behavior from a partner or friend. After all, you never stop learning.

●      Make sustainable financial decisions!

2. Too little self-control when making purchases

That one piece of Fairtrade chocolate is fine, isn't it...? Of course. But the regret is great when the whole bar is gone again. The same applies to money: today we have almost unlimited opportunities to spend it quickly and thoughtlessly.

Self-control is therefore a crucial skill in your psychological toolbox. And the ability to resist short-term temptations in favor of long-term benefits is the foundation of healthy financial behavior.


●      Avoid 1-click purchases.

●      Put whatever you want in your shopping cart in online stores, whenever you want - but only decide once a month (!) what you order. Because you will buy less this way, you will behave more sustainably and save money.

●      Also, keep a spending journal, categorize your spending, and think about whether you want to continue managing your money this way.

●      At the same time, set yourself specific savings goals for important purchases - and then see these purchases as a reward for practicing your discipline.

●      Find out about long-term & sustainable investment options

3. Too much spontaneity when making purchases

Spontaneous decisions are rarely the best - self-control is a real savings factor, especially when it comes to purchases.

There are many reasons for spontaneous purchases: For example, we have an emotional upset and immediately want a substitute satisfaction. Or the "fear of missing out" (FOMO) triggers us with offers that make us believe that they will soon disappear.

Attractive offers also trigger the release of dopamine in the brain, as do the purchases themselves. This happiness hormone then makes us feel good - but only as long as it works. When the hormone high disappears, the money is long gone.


●      Set yourself long-term goals when dealing with money! If you plan purchases and set yourself clear goals for acquisitions or wealth accumulation, you can escape the spiral of immediate emotional gratification (and subsequent disappointment).

●      Be aware of FOMO offers: Whenever a store or Instagram ad tries to convince you that it will soon be too late to take advantage of the insane offer, think consciously about how this offer is designed to trigger your FOMO.

●      Develop your wealth in the long term

4. Seek and develop a positive relationship with money

People don't talk about money in Germany. Unlike in the USA, for example, hardly any employees in Germany will talk to their colleagues about their income. This is often explicitly forbidden. But we also don't like to talk about our finances outside the office.

But we should do so! After all, a positive approach to money based on diverse knowledge, experience, and conscious decisions also increases our general well-being. Investing money consciously, for example, simply gives you more control over your finances than leaving it somewhere where it can't do anything positive.


●      Don't make your financial decisions taboo. Don't brood alone, but talk about money! With friends, but also with your family and partner. That way, everyone wins and learns from how others deal with the topic of finances. Learning from role models feels good, as does not having to copy the mistakes of others. Remember: mistakes are simply financial coaching.

●      Speaking of which: Invest time and money in your financial education - both will make you even more positive with money.

●      Invest in financial investments that have a positive impact. Then your money is not just an idle resource, but a means of making the world a better place. (It can also generate returns, but of course, it can also involve losses).

5. Reduce stress caused by money worries

It is helpful to establish a positive relationship with money - so that it does not become a worry. Of course, the opposite is also true: if you don't consciously create a positive relationship with money, you will have to live with the fact that money creates a negative relationship. One example is when "there is still too much money left over at the end of the month", i.e. you have already overdrawn your account in the middle of the month. If you experience this month after month, at some point you will only associate money with negative feelings. Financial insecurity is also a source of stress.