Why do we make money mistakes?

[Suba]

Even though we've studied various financial literacy programs, and even in college, we often learn about financial disciplines, we often make and make poor financial decisions, whether we realize it or not. Of course, a person's psychology is a major factor influencing their decision-making, such as:
1. The influence of emotions, which greatly influence decision-making, such as fear and greed, often leading to forgetting about risks.
2. The influence of cognitive biases, where we are often influenced by erroneous thinking patterns, leading us to become irrational in managing information/data, deviating from logic and objectivity.

 

[gwolf666]

I think you’ve touched on a very important point: financial literacy alone doesn’t guarantee good decisions, because psychology plays such a big role. Even when we know the right steps, emotions like fear or greed can push us to act impulsively. For example, fear might make someone sell investments too early, while greed can lead to risky ventures without proper analysis. Cognitive biases are equally dangerous; confirmation bias makes us seek information that supports what we already believe, and overconfidence bias can make us underestimate risks. The best way to counter these tendencies is to build habits that encourage discipline, like setting clear financial goals, using written budgets, and reviewing decisions with a trusted advisor or peer. By creating systems that reduce the influence of emotions and biases, we can align our actions more closely with logic and long-term objectives. Knowledge plus discipline equals better outcomes.

 

[eLdavis]

At the end of the day, we are till humans. We tend to make mistakes cause we often let our emotions get the best of us.

 

[Starmix]

A lack of awareness of the actions may put the finances in danger. Spending the money without knowing and calculating will result in zero remainder.

 

[Springtime]

We are human beings. We will make mistakes. Even we are financial literate, when we make financial decisions, we may be influenced by our emotions such as greed, over-confidence.