"Our acts can be no wiser than our thoughts.”
~George S. Clason
BEHAVIORAL ECONOMICS
Does your brain affect your bank account?
Research in psychology and economics has firmly established the field of behavioral economics, explaining why we predictably or habitually do what we do when it comes to money even when the decisions oppose our economic best interest. The insights that have come from research in behavioral economics are the keys to dealing with financial problems that standard finance concepts and traditional economics simply do not address. Financial knowledge can improve financial competence, but information doesn't necessarily override the instinctive motivations of human behavior or and how our mental wiring is designed to work.
A budget tells us what we can't afford, but it doesn't keep us from buying it.
~William Feather
The findings from the research in behavioral economics bring valuable insights into why, in typical circumstances, our psychological makeup works against us in making economic decisions. Due to advances in brain imaging over this last decade, the field of neuroeconomics has also advanced to uncover surprising evidence of how economic decision making actually happens in the brain. We're simply not as aware as we think we are about how we make choices, even when we're thinking through a decision.
We don't necessarily have to know about the inner workings of the brain, but understanding what behavioral economics is and why we need it is fundamental to applying it. The discoveries in behavioral economics are credited for revolutionizing the understanding of how the mind works and how behavioral change occurs. It delivered groundbreaking scientific evidence and revealed hidden truths of how the functions of our human nature and physiology effect choices, behavior, and decisions. Its insights are needed to correct errors in our decision making and to alter behavior.
Even a small reduction in errors and rework can have a significant imapct.
~Abagil Johnson
With so much evidence about how our normal mind works, we should be using the insights of behavioral economics to be more conscious about what's driving the specific behaviors that limit our financial outcomes. Personal awareness gets us to pay closer attention to what's motivating us and alerts us to the knee-jerk reactions and thought patterns that yield unintended results. We can learn ways to sidestep our natural tendencies and ways to reprogram our mental default settings. Changing behavior is not always easy, but it is simple to learn the strategies and practices that will help increase our potential to achieve financial goals and improved well-being. Both our Seminars and Workshops and the Steps-to-Strides Coaching program empower you practical financial strategies and useful insights that help you bring about changes in your life that improve your economic outcomes.