How our brains make us poor and how to avoid it

You are at an online store on the Internet and you are eager to buy something. And that thing is a bit expensive in terms of the amount in your bank account but at the moment it has become the most important thing in the world for you.

And you wonder what would happen if the price went up and you lost the opportunity to buy it. Or what if it's over?

In this emotional state, you calculate in your mind and decide to buy it. You do not even have to enter your bank card number because it is already stored in your computer browser.

All you have to do is press the button. But after a few days, you start to regret it or even worse, you go into debt.

Recent research and studies in the field of behavioral economics and neuroeconomics have shown that situations in which we make irrational decisions often harm our financial health.

But what are our most common financial mistakes in this regard and how can we avoid being fooled by our 'mind'?

A good way to do this is to understand what habits we can adopt in our daily lives.

Renata Taviros, professor of neuroscience and neuroeconomics at the Foundation Institute of Administration of Brazil, says: And he would like to improve his interests as much as possible.

Unconscious decision-making, which does not happen logically, is considered a defect and therefore is not part of this research.

But in the late 1970s, a group of researchers conducted a study looking at the shortcomings that revolutionized the world of economics.

This was followed by the Department of Behavioral Economics, which was presented by a psychologist, Daniel Kahnman, a 2002 Nobel Laureate.

Explaining this, Professor Renata explains: "This research has led to the debate that we should realize that some other factors also influence our decision-making power and that it is only for benefit, good health and maximum functioning." Not at all. '

More research was done in the 1980s. Behavioral economics and the techniques of neuroscience and neuroeconomics were used.

The study looked at how a person reacts when they decide to buy something unnecessary.

"Now it is possible for us to open the black box that economists call the decisions of the human mind," says Professor Renata. In fact, if you look at it, you will understand what is going on in a person's mind when he starts making decisions.

"When you read Neuroeconomics, the idea is that we can control our attitudes, our decision-making, and what we do will end," she said. Because the motivations for decision making are not logical, rational and analytical in nature. These decisions are very much emotionally charged.

First of all, it is good to know that emotions and feelings do not always have to be bad. On the contrary, they are essential to our survival.

"Nature has given us both love and logic, and they are not in vain," said Elvaro Makhado Dias, a professor and neuroscientist at the Federal University of Sao Paulo. When you are emotionless, you do not feel for others. Our decisions become more selfish and this society as a whole is ruined.

But it is also a fact that emotions cause us to make serious mistakes that push us into remorse or debt.

In this sense, Behavioral Economics and Neuroeconomics can be beneficial for us to account for our irrational decisions and avoid making wrong decisions.

The first step is to learn not to say it yourself.

Elvaro warns: "Don't make hasty decisions until you can see that later regrets will ruin your party." Understand your future better and understand your needs and requirements. Not telling yourself is like denying a child, it's hard, but it's positive. '

According to Renata Taviros, the obstacle to preventing such a reaction is actually due to the increase in easy payment methods.

The QR codes and credit cards used on websites are examples of this.

In addition, the nerve hormone dopamine, which gives the brain a 'sense of reward', interferes.

"We have serious problems in Brazil, and all these things that motivate us to buy are making things worse."

Therefore, to avoid such reckless decision-making behavior, the golden advice is to 'turn around once' before buying anything.

She says: 'I often stick a sticker on consumers' credit cards that says 'Go a little further, wait a minute, breathe.'

This chemical has an effect on time and soon the feeling of 'I really want it' disappears and the person concludes that he can use the money elsewhere.

But even before the purchase, these wrong decisions can be avoided.

"It's hard to get into debt when you know exactly what your financial situation is," says Renata Teviros.

"It is important for everyone to have the courage to know about the financial situation and keep an eye on their accounts. Many people say that it is difficult but after doing so they feel good. If you are afraid to look at them, you can fall into all sorts of mental traps.

One of them is 'calculation in mind'. Most of the mental calculations we make about our financial situation are wrong.

"We calculate. "If I earn a hundred, I can spend 50 in the supermarket, 20 in the bar, and only 10 on food. In addition, I will have 15 other expenses. So you compare 15 with a hundred and 10 with a hundred, but this calculation doesn't work. Then it turns out that the servant is at a loss.

All you need to do is write down your expenses. If you write down all your earnings and all your expenses clearly then you will have an accurate estimate of how much money you can spend.

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