Member-only story
Economics
How Economic Pressure Affects Our Decision-Making
As prices rise in our economy, it is becoming harder for people to live. Recent price increases in the economy have led to pay rise protests and record rates of inflation.
As times continue to be uncertain due to war, it can be hard to make good decisions. In this short, you will learn how economic pressures may be affecting your biases and decision making.
Loss Aversion and Your Savings
Loss aversion is a psychological phenomenon that shows that humans respond to losses more strongly than corresponding gains. Due to this, people are more likely to make rash decisions when they are losing money.
Unfortunately, many of us are in a state of losing money currently. Therefore, taking time to understand that you naturally overexaggerate your losses is an essential fact to navigating them.
Uncertainty and Your Money
When we are living in uncertain times, we are less likely to make good decisions. That is because we tend to overvalue things due to fear. This way of thinking can lead us into markets that are more volatile but also lead us to hold onto our money despite high inflation.
