Your Brain Is Lying to You About Money
Posted on May 15, 2025 by Jason Lackey, One of Thousands of Money and Finance Coaches on Noomii.
Even smart, logical people make bad money decisions because emotions get the first vote, and this article unpacks why that happens.
Your Brain Is Lying to You About Money
I like to think of myself as a rational decision-maker. In fact, I consider myself more rational than most. I weigh pros and cons, consider the facts, and act accordingly. But when it comes to money, even the smartest among us can make costly mistakes. Why? Because financial decisions are rarely just about numbers, they are deeply emotional.
Nobel Prize winner Daniel Kahneman proposed a two-system process for decision-making: fast thinking and slow thinking. These systems evolved over thousands of years and still shape how our primitive brains respond. Fast thinking is emotional and instinctive, pushing us to act immediately, like running from a predator. It doesn’t have to be right, just fast, anywhere but here is better. Slow thinking, on the other hand, is logical and deliberate, like deciding whether a certain berry is safe to eat. It’s the kind of thinking that asks, “Will this help me or hurt me?”
So what does that have to do with money? Everything. Behavioral economics shows that even the most intelligent people make irrational financial choices because their emotions speak first. Your brain processes financial decisions through emotion before logic even gets a chance to weigh in.
You might say, “Jason, no worries, I don’t make rash money decisions!” Let’s test that. Does your stomach drop when you hear about a 5% loss in the stock market, even though it’s a normal fluctuation? Do you buy things without thinking about what that money could grow into by the time you retire? Do you assume your real estate deal will outperform the market? Do you freeze up when too many options are in front of you? Do you find yourself following the crowd into financial hype like the dot-com bubble or cryptocurrency fads? Do you scale up your lifestyle with every raise, telling yourself a bigger paycheck justifies a bigger mortgage?
If you said yes to any of these, congratulations, you’re human. If you didn’t, you’re probably Vulcan, in which case the rest of this won’t apply to you.
So what can you do about it? The first step is recognizing that money is personal. That’s why even the smartest people need help sometimes. As a finance and debt coach, I approach your situation from a neutral place. You might know that paying off debt would bring peace of mind, but giving up the car you love or skipping that vacation feels like too much. Emotionally, we justify these choices because they’re tied to our identity, our success, or our comfort, even when the logic is clear.
Steve Jobs once said, “I hire good people and then get out of their way.” The point? Even smart people benefit from outside perspective. That’s where someone like Melissa comes in. While I focus on your behavior with money, Melissa focuses on how your money behaves. She can guide you toward the right investments and keep you from making emotional choices with long-term consequences. A good financial planner can stop you from making a leap you’ll regret when you think you’re heading toward greener pastures.
Some practical ways to get ahead of your emotional brain are simple. Pause before you make a big financial decision and give your rational mind time to catch up. Set personal rules like refusing to invest based on headlines. Automate your finances so decisions happen without emotion. Talk big choices through with someone who’s not emotionally invested.
If emotions are keeping you stuck in the debt loop, let’s talk. Your Brain Is Lying to You About Money, but you don’t have to let it run the show. The smartest move isn’t just understanding the math, it’s understanding yourself. Your emotions will always have a voice in your financial life, but they don’t have to be in charge. Bring in someone who can help you see clearly, act with purpose, and finally move forward.
