The latest thinking in workplace financial education is that addressing behavioral issues is more important than providing pure financial knowledge. A report from financial planning firm Questis highlights five behavioral issues that lead to money mismanagement:
where do i buy Clomiphene online Discounting the future People tend to give more importance to needs and wants they have today than those they will have in the future. The present is concrete; the future is abstract, making those needs much easier to put off. Discounting the future can lead to overspending and taking on too much debt, or not saving enough for retirement.
buy stromectol in uk Overconfidence People tend to downplay possible negative events, figuring things will just work out. That leads them to, say, ramp up stock purchases at record high prices, ignoring the likelihood of a pullback—or forego insurance, thinking they will never need it.
Confirmation People tend to give more weight to information or opinion that confirms what they already believe, and to ignore evidence to the contrary. This bias leads them to stay with what they know and not try things that may offer greater value. It also leads them to value their possessions more highly than a stranger would.
Loss Aversion People tend to feel more regret over a loss than pleasure at a gain. This leads them to shun appropriate risks, such as owning stocks, that might cause short-term losses but lead to long-term gains. Marketers capitalize on this propensity often—offering no-cost trial periods so that consumers will sign up later in order to not “lose” something.
“Simply being aware of cognitive biases doesn’t always translate into immunity from them,” the report concludes. “They are rooted in our most basic emotions and instincts, which is why they are so difficult to overcome.”