I’ve recently become very interested in the field of neuroeconomics. The word “neuroeconomics” is a scientific-sounding word that basically describes the field of psychology that studies how we make decisions about money. The reason I find this so interesting is because as a financial professional and educator I am always dumbfounded when I see people make poor financial decisions (including myself) even though they know better. For example, everyone knows that they need to spend less than they make yet for a few months in 2006 households collectively in the United States were spending more than they made. Even grade school students know this isn’t wise yet again and again households find themselves in difficult financial circumstances. But why? For the longest time I blamed the lack of a comprehensive financial curriculum in our school systems but after reading into the field of neuroeconomics I’m beginning to think that emotion has more to do with it than lack of education.
So, I’ve added a category to devote to this topic and plan to write more about it in the future. If you have any experiences or resources that you’d like share please comment below.