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How Attitude Impacts Financial Decision Making

Attitude has a lot to do with an individuals’ financial decision making and their financial  situation. However, there are a ton of factors that influence a person’s attitude including their emotions and environment. People who are impatient tend to have quick and snappy attitudes that are horrible for good decision making because often that person will act on impulse instead of rational thinking.

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This can in no way, shape or form lead to good financial decisions. For example you may have just received a paycheck but you are depressed for some reason, you find out a new smartphone just went on sale that you have been wanting even though you already have a phone but you decide to purchase it on the spot anyway.

That is a minor example but you get the point, things can get a lot worse when you have more money. Even if you have a lot of money that does not always mean that you make good financial decisions or that you have a good attitude when it comes to finances. Finances usually have a lot to do with luck, mixed in with hard work, opportunity and timing of course.

However, there have been many billionaires and multimillionaires who have made very poor decisions because of their want-it-all attitudes that have led to them becoming broke and losing everything. Therefore it is best to stay humble and only act when you are free of any serious stress and thinking with a clear mind.

Good attitudes almost always result in good decision making, although this is not always the case. Having a good attitude is great but sometimes it is possible to have too good of an attitude. When this happens you can end up trying to help out everyone around you and looking out for other people more than you are yourself.

mike tyson

This generally happens to a lot of professional athletes who start getting paid large sums of money that they never would have dreamed of having. There have been athletes who have went broke because they were buying all of their friends houses, cars,  investing in their businesses without analyzing them and picking up the tab on extremely expensive dinners.

Are those the actions of a good attitude? Yes but as they say, having too much of one thing is almost never good and it takes a lot of self control to be able to manage yourself and your finances properly. So in addition to having a good attitude being smart and knowing how to manage your money are of course other important factors that impact financial decision making.

A person’s attitude towards risk and their chances of gaining from it is much more valuable than their attitude towards taking a loss from a risk. Someone who understands that the risk is worth the reward will likely have a good attitude towards finances contrary to belief. The majority of people believe that if you are willing to take a risk that you have bad financial decision making skills but this is far from the truth.

When all is said and done, a negative, play-it-safe or act-on-impulse attitude will result in little to no financial gain and that is not a good thing. A relaxed attitude and being a clear thinker but willing to take a risk for a big reward is the most common attitude among individuals who are financially successful.

Photo Credit: birzer, nerovivo

Chris Atkins
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