| Explore how hard-wired biases like loss aversion, present bias, and the craving for certainty can quietly derail even smart, well-intentioned investors. You can work with that wiring—through automation, clear “buckets” for your money, realistic planning, and intentional spending—so you can save consistently, stay calmer in volatile markets, and actually enjoy your money. |
Our recent webinar, “Your Brain on Money: Friend and Foe,” looked at why smart, capable people still struggle with saving, spending, and investing. It’s not a character flaw—it’s how our brains are wired.
Below, I’ve pulled together some of the key questions we tackled, along with insights from both me and my colleague, Steve Ahern.
We all carry a personal “money story”—a mix of childhood memories, family habits, and big life events that quietly influence how we treat money today. You might not be able to recite that story on command, but you live it every time you make a financial decision.
For Steve, early lessons were all about trade-offs. His parents chose homemade batons and hand-me-down bikes so they could afford bigger experiences like traveling and house-swapping in Europe. That taught him that spending less on “stuff” can create room for richer experiences.
My own defining moment came later, at 18, when I inherited money from my aunt, invested it during the early 2000s downturn, panicked, and sold at the bottom. It was a painful introduction to how emotions can drive investing—and it ultimately pushed me toward helping other people avoid those same missteps.
Understanding your own money story matters, because it explains why you react the way you do—and gives you a starting point for changing what isn’t serving you anymore.
A lot of “bad” investing behavior is simply normal human wiring. Some of the biggest culprits:
When you layer these together, you get behavior like panic-selling during market drops, chasing hot stocks, holding too much cash, or switching strategies at exactly the wrong time. The challenge isn’t just finding the right investments—it's learning not to let your wiring run the show.
You can’t turn off emotion, but you can build guardrails. One of Steve’s stories from the early 2000s is a textbook case of what happens without them.
He worked with a young professional whose tech company stock had soared. On paper, this client was worth tens of millions. He’d already bought the big house and the Ferrari, and he was convinced the company was “going to the moon.”
The advice was simple: sell some stock, pay the taxes, reduce the loans, and secure the basics. But the narrative in his head—this can only go higher—was louder than any outside guidance. Weeks later, the stock collapsed. He owed taxes on exercised options, couldn’t cover his debts, and ultimately lost nearly everything.
That story isn’t about intelligence. It’s about:
The antidote is structure: asset allocation, diversification, risk limits, and a written plan you can lean on when your emotions are loudest.
Most people don’t struggle because they’re irresponsible. They struggle because saving runs directly into how our brains function:
Two levers make a big difference:
We call this the knowing–doing gap. You already know saving is important; your job is to design your setup so doing it becomes the default.
Start small and make it automatic. A few simple steps:
Over time, we’ve seen clients who do this consistently build substantial balances—sometimes millions—without ever making a “heroic” decision. They simply committed once, automated it, and let time work.
Volatility is part of investing, but anxiety doesn’t have to be. Here’s how we help clients stay grounded:
When markets drop, it’s typically the long-term bucket moving around—not the money you need in the next year or two.
One of my favorite investment sayings is:
“Your portfolio is like a bar of soap; the more you touch it, the smaller it gets.”
A solid plan and a disciplined process almost always beat emotional, headline-driven decision-making.
We see plenty of people who are great savers but uneasy spenders. They feel guilty every time they use the money they worked so hard to build.
From years of conversations, one theme stands out:
When you spend on experiences—trips, family outings, shared adventures—you get:
Steve talks about how he once prided himself on not spending. Over time, he realized his family wasn’t having as much fun as they could—and that intentionally spending on experiences like Disney trips or planned vacations created far more value than another “perfectly optimized” savings month.
We’re not here to tell you what you should value. Our role is to help you:
In most cases, no. The “latte factor” gets attention because it’s simple and blame-y, but it often misdirects your focus.
Writer Nick Maggiulli suggests focusing less on $5 decisions and more on $50,000 decisions. The bigger levers usually are:
That doesn’t mean small choices are irrelevant. But instead of obsessing over coffee, we encourage clients to:
One person might love high-end coffee and not care about cars. Another is the opposite. Our stance is “wealth management without judgment”: get the big things right, automate your savings, and then build a spending pattern that fits your values.
Different money stories in a relationship are the rule, not the exception. That doesn’t mean you’re doomed to argue about money forever.
Some approaches we’ve seen work:
You don’t have to agree on everything. You just need enough shared understanding and structure that you can move in the same direction.
Kids of all ages are constantly absorbing messages about money. You can shape that story deliberately, without disclosing every detail of your finances.
With younger kids, a few tactics help:
With adult children and inheritance, many parents are hesitant to talk. You don’t have to share exact numbers, but you can share:
Those conversations tend to prevent more conflict later than silence does.
The shift from accumulator to spender can be emotionally challenging. You’ve spent decades being told to save; now you’re being told to draw down.
This is where a financial plan becomes essential. A good plan will:
Then, when you’re asking, “Can we afford this trip?” or “Is it okay to help our kids with a down payment?” the answer isn’t a shrug. It’s a data-backed yes or no, rooted in your long-term goals.
That clarity is what allows many retirees to finally enjoy the money they’ve worked so hard to earn.
If you’re ready to do something but don’t want to overhaul everything at once, start here:
And when you get your next raise or bonus, try living on your old income and sending most of the increase straight to savings. It’s one of the least painful ways to accelerate progress.
Your brain on money can be both friend and foe. The same wiring that kept our ancestors safe can push modern investors toward fear, overconfidence, and short-term thinking.
But with the right systems, conversations, and planning in place, you can:
And you don’t have to do it alone.
If you’d like help building a plan that works with your human wiring—not against it—the team at Sachetta is here to talk. No judgment. Just clear, thoughtful guidance.
Michael J Callahan, CEO, CPA, CFP®, MST, is a Certified Financial Planner™ practitioner, Certified Public Accountant, and holds a Master’s Degree in Taxation from Bentley University. Mike has been involved in personal financial planning, as well as both business and individual taxation for more than 20 years.