Feelings, especially unconscious ones, can affect financial decisions, so it’s a good idea to monitor your moods
By Ingrid Wickelgren on April 20, 20101
MONTREAL—Rational calculations do not dictate financial decisions, as psychologists have revealed in recent years. Emotions often sway our spendthrift or miserly ways. In particular, positive feelings promote risk taking—gambling in Vegas, say, or going on a shopping spree—whereas bad moods prompt protective selling or saving. In some cases, our feelings may have an obvious origin: studies show that sunshine breeds stock surges, whereas clouds curtail purchasing. But much of what influences our spending is far more subtle—subliminal, in fact. Now psychology graduate student Julie L. Hall of the University of Michigan reports at the Cognitive Neuroscience Society 2010 annual meeting that subconscious emotional cues have a far greater impact on financial risk taking than conscious ones do. What is more, one particular brain region mediates the connection between what influences our feelings and the financial decisions we make.