Behavioural Finance: why you make the money mistakes you make

Find the patterns behind your own spending, saving, debt and investing mistakes, and set up rules and defaults that limit what they cost.

Most money mistakes are not caused by a lack of knowledge. People who know they should invest regularly still sell in a fall. People who track every dollar still carry a card balance while holding savings. People who know the maths still buy the car, the policy or the stock because the moment felt right. These patterns are predictable, and researchers have studied them for decades. This course explains the ones that cost the most money, shows where they appear in your own spending, saving, debt and investing, and helps you build rules, defaults and frictions that work when willpower does not. You will not stop being human. You will stop paying as much for it.

What you'll be able to do

• Log your own money decisions and name the pattern behind each repeated mistake
• Explain loss aversion, reference points and mental accounting and find them in your past choices
• Set up automatic saving and commitment rules that work against present bias
• Audit your trades for the disposition effect, overconfidence and herding
• Write a cooling-off checklist for large purchases and sales pitches
• Build a personal money behaviour playbook with if-then rules and a quarterly review

Syllabus

Module 1: See why your money mistakes follow patterns

Learn why real money decisions differ from the textbook model in predictable ways, how stress and emotion change choices, and start a log of your own decisions.

• 1.1 Your money mistakes follow patterns, not character flaws
• 1.2 Stress, scarcity and emotion change your choices
• 1.3 The behaviour gap between fund returns and investor returns
• 1.4 Start your money decision log

Module 2: Judge gains and losses for what they are

Understand prospect theory: how reference points shape what feels like a gain or loss, why losses weigh more, why small chances feel larger, and why you overvalue what you own.

• 2.1 Gains and losses are judged from a reference point
• 2.2 Losses weigh more than equal gains
• 2.3 Small chances feel bigger than they are
• 2.4 You value what you own more than what you could buy
• 2.5 Review three decisions for their reference points

Module 3: Stop treating dollars differently by label

See how mental accounting makes you treat money differently depending on where it came from or which jar it sits in, when that costs you, and how to use it on purpose.

• 3.1 The jars in your head
• 3.2 Windfalls and bonuses feel like free money
• 3.3 Saving at low interest while carrying expensive debt
• 3.4 Map your mental accounts and price the cost

Module 4: Spend with the pain switched back on

Understand why cards, wallets and buy now pay later make paying feel painless, how comparison and price framing push spending, and find your own triggers.

• 4.1 Cards, wallets and BNPL make paying feel painless
• 4.2 Spending to keep up with the people around you
• 4.3 How sellers frame prices to make you spend
• 4.4 Run a two-week spending trigger diary

Module 5: Make saving the default, not a decision

Understand present bias, why defaults decide so much, and how commitment devices such as Save More Tomorrow help you save without relying on willpower.

• 5.1 Why later always loses to now
• 5.2 Defaults decide more than intentions
• 5.3 Commitment devices: promise your future pay rise now
• 5.4 Design your saving rule and commitment

Module 6: Trade less and hold your nerve

Find the investor behaviours that cost the most: selling winners too soon, trading too often, following the crowd, checking too much, and misjudging your own risk tolerance.

• 6.1 Selling winners too soon and holding losers too long
• 6.2 Overconfidence and the cost of trading often
• 6.3 Recent returns, hot tips and the crowd
• 6.4 Checking your portfolio too often makes it feel riskier
• 6.5 Your calm-day risk tolerance is not your crash tolerance
• 6.6 Audit your trades for these patterns

Module 7: Slow down big purchases and sales pitches

Recognise the pressures on big-ticket decisions such as homes, cars and insurance: anchors, deadlines, reciprocity and sunk costs, and build a cooling-off checklist.

• 7.1 Anchors, deadlines and launch day pressure
• 7.2 Reciprocity and trust when someone you know is selling
• 7.3 Sunk costs in policies, renovations and losing investments
• 7.4 Write your cooling-off checklist

Module 8: Build your personal money rules and review them

Turn what you learned into if-then rules, set up your environment so good choices are easy, and run a quarterly review of your behaviour.

• 8.1 If-then rules decide before emotions do
• 8.2 Make good choices easy and bad ones slow
• 8.3 Review your behaviour every quarter
• 8.4 Write your money behaviour playbook

Frequently asked questions

How long does the course take?

About six hours of lessons and exercises, plus two weeks for the spending diary. The exercises use your own statements and trades.

How is this different from Critical thinking and better decisions?

That course covers thinking and deciding in general: arguments, evidence, fallacies, biases and decision methods, mostly with work and everyday examples. This course is about money behaviour specifically: spending, saving, debt, investing and big purchases.

Do I need to be an investor?

No. Most modules cover spending, saving, debt and large purchases. Module 6 is about investing and is most useful if you hold some investments, but you can work through it with a sample portfolio.

Is this financial advice?

No. The course is education and does not replace financial advice. It teaches how money behaviour works and how to set rules for yourself, and never tells you what to buy. Speak to a licensed financial adviser about your own situation.

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