Financial decisions are rarely just about numbers. While a sound plan considers goals, risk, time horizon, income, and diversification, each of us brings something else to the table: our personal history with money.
This article draws on a recent By Your Side Chat conversation with Dr. Nicole O’Barto Trainer, owner of Native Integrative Mental Health Clinics. Nicole shared a helpful perspective on the emotional and unconscious patterns that can influence how we respond to money, markets, and financial uncertainty.
The beliefs beneath our financial choices
Our earliest experiences often shape the beliefs we carry about money. Messages from parents, grandparents, teachers, and other important figures may influence whether we associate money with security, scarcity, opportunity, stress, power or conflict.
Those lessons are not always spoken directly. They can come from watching how adults handled spending, saving, debt, generosity, financial setbacks, or conversations about what was and was not possible. Over time, these experiences can become part of the lens through which we interpret financial events.
Nicole noted that when we examine our relationship with money, it can be useful to reflect on how money moved through our lives and what we learned from its availability, absence or loss. This reflection is not about assigning blame. It is about becoming more aware of the beliefs that may be influencing present-day decisions.
Recognizing behavioral finance in everyday life
Behavioral finance explores how psychology, emotions and cognitive shortcuts can influence investment decisions. These tendencies are human; none of us is completely immune to them. The goal is not to eliminate emotion, but to recognize when it may be taking the lead.
A few common examples include:
Herding: Following an investment because coworkers, friends, or online communities appear to be doing the same.
Social proof: Assuming an investment is right for you because someone else seems to have had success with it.
Loss aversion: Feeling the pain of a loss more intensely than the satisfaction of an equivalent gain, which can make risk feel especially difficult.
Overconfidence: Believing we can accurately predict market movements or that personal conviction outweighs available data.
Fear of missing out: Feeling pressured to buy or sell quickly because an opportunity seems urgent.
Anchoring: Giving too much weight to the first price point or piece of information we hear.
Confirmation bias: Looking primarily for information that supports an existing belief while overlooking evidence that challenges it.
Recency bias: Allowing recent market events to outweigh the longer-term context.
These patterns can show up after a market headline, a political event, an international development, or a social-media post. They can also appear when a friend shares an investment success story. The information may be real, but the question remains: Is it relevant to your goals, risk tolerance and broader financial plan?
Emotional reactions are information
Nicole offered an important reframe: emotional reactions do not always need to be treated as something to suppress. They can be information.
If a market decline prompts an immediate urge to sell, or if a new trend prompts an urgent need to buy, it may be worth pausing to ask: What is this situation bringing up for me? Is the reaction connected to the current facts, or is it activating an older fear, belief or need for control?
That pause can make room for a more intentional decision. It may also help us distinguish between a genuine change in circumstances and an emotionally charged reaction to uncertainty.
Trust and communication matter
Trust was a central theme of our conversation. A financial relationship is strongest when clients feel comfortable sharing their questions, fears, preferences, and concerns. Financial planning can involve vulnerability: it asks us to discuss our goals, income, family responsibilities, hopes and worries.
If you have chosen a financial team to help guide your long-term plan, open communication is essential. Avoiding reviews, hesitating to share concerns, or making major changes without a conversation may signal discomfort, anxiety or uncertainty that deserves attention.
As Nicole explained, our behaviors can provide useful clues. If we consciously say we want a long-term plan but repeatedly avoid engaging with it, there may be a disconnect between our stated goals and what we feel beneath the surface. Identifying that disconnect can help restore alignment.
Building a process that reduces emotional decision-making
A thoughtful financial process can create helpful structure when markets and emotions are moving quickly. Some practical ways to support that process include:
Setting clear, realistic and measurable financial goals
Making systematic contributions when appropriate, rather than trying to time every market movement
Diversifying investments instead of concentrating everything in one company, trend or sector
Keeping regular reviews so changes in life, income, priorities and comfort level can be discussed
Bringing concerns to your advisory team before making an impulsive decision
These steps do not remove uncertainty from investing, but they can reduce the pressure to react to every headline or trend.
Couples and money: begin with honest conversation
For couples—whether newly married, remarried, blending families, or planning for the future—money conversations should begin with openness and transparency.
Nicole encouraged partners to discuss not only financial goals and practical responsibilities, but also the experiences that shaped their respective relationships with money. What did money represent in each person’s childhood? How did their family talk about it? What fears, expectations, or priorities do they bring into the relationship?
There may not be one correct way to manage money as a couple. The important thing is to understand one another’s perspectives and create shared expectations before misunderstandings grow. These conversations can also be valuable when discussing beneficiaries, children, generosity, retirement and other long-term priorities.
Regulate first, decide second
When a financial event triggers a strong reaction, Nicole recommends beginning with nervous-system regulation. In moments of stress, our systems often prioritize survival and quick action over reflection and self-awareness.
Before reacting to alarming news or a market swing, consider taking a step back. Give yourself time to settle before deciding what action, if any, is needed. Once the immediate intensity has eased, it can be easier to describe what feels concerning and to communicate more clearly with the people who support you.
The same principle applies to our media habits. We live with a constant flow of information, notifications, news and social content. That environment can intensify anxiety and make reactive decisions feel more urgent than they are. Creating boundaries around online content and making room for offline activities—such as movement, time in nature, rest, or meaningful connection—can support a more balanced response.
Awareness creates room for better choices
There will always be market changes, new technologies, political developments and attention-grabbing financial stories. We cannot control every outside influence, but we can become more aware of how those influences affect us.
The most valuable next step is often simple: pause, notice your reaction, and start a conversation. When we understand the beliefs and emotions shaping our decisions, we are better positioned to make financial choices that serve our long-term goals rather than the urgency of the moment.
*Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.