The Psychology of Everyday Life: Motivation and the Search For Happiness

The Psychology of Money

What problems do our emotions cause us when making financial decisions?

Even though our emotions have evolved over millions of years to help us adapt to our environment, they are not perfect tools and can often lead us astray. For one thing, our emotions are geared almost entirely toward the present. Our emotions can tell us a lot about our needs in the present, but they are not good at telling us what we will need in the future. For that, we need thought and careful analysis. Secondly, our emotions are stimulus bound, in other words they are highly and sometimes excessively responsive to cues in the environment.


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