Note: This article is courtesy of Iris.xyz

By Northwestern Mutual Insights & Ideas Team

Financial planning involves a series of seemingly endless decisions. Should you participate in an employer-sponsored retirement savings plan? Where should you put money for the best investment return? Should you save less for your child’s education to save more for your retirement?

Whenever you’re confronted with having to make these decisions, you become a test case for behavioral economics, a discipline that explores irrational thinking and economic decision making in a person’s daily life.

Even if you are a rational thinker, you may exhibit behavior that is predictably irrational when it comes to money. If you can recognize irrational behavior, you can take steps to avoid it and make better financial decisions.

Do you show signs of any of the following: Anchoring, Loss Aversion or Procrastination?

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