For most people, doing finances is not their hobby. And to some people it even feels like a real threat. One study did an fMRI of people who said they had math anxiety and asked them to do math problems. It lit up the threat detection centers of their brain. In other words, it felt literally like they were being chased by a tiger.

In addition, financial information is often far from simple. Documentation on buying a house, for example, runs for pages, and there’s fine print and all kinds of numbers and things like compounding interests are hard to wrap your head around. 

And that’s exactly the problem. Our brain is wired to avoid effort. There are not so many laws in physics, but we follow the “law of least work”: if two options give the same reward, we naturally choose the one that requires less cognitive effort.

We often have a tendency to avoid engaging deeply in very difficult financial situations. And even when we do engage, our brains aren’t exactly helping us.

People are poor at predicting their own future behaviour. Due to multiple biases that come into play. Like the optimism bias, we assume things will work out: We all tend to think that our ship’s going to come in. We believe we’ll earn more, spend less, and be more disciplined than we actually will be.

On top of that, we deal with an expense prediction bias, which means we underestimate what life actually costs. We remember fixed payments like rent and health insurance, but forget about irregular expenses like repairs or concert tickets.

Then there’s intertemporal discounting: we undervalue future costs compared to immediate ones. Paying $500 today feels significant, but that same $500 in the future feels less important, so we’re more likely to ignore it.

And finally, when things get complex, we start what psychologists call seizing and freezing. You will seize upon one piece of information and then you will freeze out everything else. In other words: we simplify, rush, and move on, just to get it over with.

So what can we do about it? (and what this means for business)

The good news: there are ways to work with these biases instead of against them. John Dinsmore, professor at Wright State University, researches how people think about money, debt, and financial choices, and shares his advice on how to deal with these biases.

Take breaks when overwhelmed
When decisions get complex, don’t push through blindly. Step away. As the researcher suggests, even a short pause helps restore self-control and improves decision-making.

Challenge your own assumptions
Use counterfactual thinking. If you think, “I’ll have more money later,” ask yourself: “have I actually had that before?” This simple mental check can prevent overly optimistic decisions.

Automate good behaviour
Use biases to your advantage. For example, automatic savings work because once money is out of sight, you don’t miss it. People save more when money is deducted before they receive it, this way, they counter loss aversion and the endowment effect.

It’s nice to believe that being good with money comes down to basic financial literacy; make a budget, be a little disciplined, and you’ll be good. But often enough, financial literacy is not enough to combat the biases that shape our decisions and the marketers who know how to take advantage of our mistakes.

Knowing this, where is your brand making customers work too hard, by giving complex information, too many choices, or tempting them into decisions that require self-control? And how can you redesign that moment so the best (financial) decision happens by default?