CFI Blog

Monkey Brain’s Mood Ring

“They say it is better to be poor and happy than rich and miserable, but how about a compromise like moderately rich and just moody?”
–Princess Diana

Have you ever gone to a party after a miserable day at work? Even if you do eventually warm up and start having a good time, it takes quite a while for the rest of the partygoers to snap you out of your funk and get you to put on your dancing shoes. However, if you’ve had a great day and are excited to go to the party, even if it’s not the liveliest party you’ve ever been to, you put in a lot of effort to liven it up and to make it fun.

Scientists love coming up with names for every possible phenomenon under the sun and inside our skulls, and this is not different. As Dr. Daniel Crosby explains, the affect heuristic is simply the interpretation that Monkey Brain gives events based on the mood we’re in at the time the events happen. The affect heuristic has a wider impact on our lives than we might think. From filling up the shopping cart with Doritos if we go to the grocery store while hungry to changing our perception of past events, our mood alters how we perceive the world.

“Sure,” you are probably thinking to yourself. “This is nothing earth-shattering. Tell me something useful, Captain Obvious.”

There are a whole host of areas in your personal finance life where your mood can drastically affect what you do with your money. Let’s look at a few:

  • Decisions about how much you save for retirement. If Eeyore Brain (Monkey Brain’s cousin) is behind the wheel on the day that you decide how much you’re contributing to your 401(k) or your IRA, then you’re probably not going to set aside as much money as you normally would. What’s the point of saving and investing when the stock market’s going to crash and you’ll lose all of your money anyway? And, while you’re at it, can you pin his tail back on?
  • Purchasing insurance. As Cal State’s Dr. Robert Thayer and others show, if you’re in a bad mood, then you’re less likely to care about yourself. When you don’t care as much about yourself, then you’re less likely to try to do things which create a positive influence in your life, such as self-care (health insurance, long-term care insurance) or care for others if you pass (life insurance). You may wind up being seriously underinsured because your cup of coffee that morning wasn’t hot enough for your tastes.
  • Not giving your all at work. Once upon a time, there were days and employers where you could show up, not do much, and stay on the payroll and continue to get pay raises. The days of a fat, happy country are over. The U.S. has had a rude awakening over the past few years that the rest of the world is catching up, and employers, who are in business to make profit, need their employees to bring it. If you’re not bringing it every day, then you’re risking becoming a liability on the books. I’ve been an employer. If our employees didn’t add value for us, we encouraged them to find new careers. If you’re an entrepreneur and you’re not bringing it, then you won’t deliver value for your customers, and word will spread quickly that you’re not worth the money that people paid for your service or product. A bad reputation will crush a small business and is devilishly hard to overcome. Don’t let getting up on the wrong side of the bed risk your livelihood.

Of course, the opposite end of the grumpy spectrum is to be happy and positive. If you have a positive outlook on life, then you’re more likely to envision success. It is possible, though, to be TOO optimistic. However, I’d rather you be positive than to be negative, since, when you have positive intention, you’re more likely to create a self-fulfilling prophecy and make positive things happen in your life.

How do you turn that frown upside down before you make major money decisions?

  • Positive affirmations. If you think about the positive things in your life and the positive things about yourself, you’ll have a better opinion of who you are. This will, in turn, give you a better outlook and make you more likely to meet your goals.
  • Make a list and check it twice. Corporate conflict expert Laura Palmer recommends that you make two lists: one has a list of all of the positive things in your life and one has a list of all of the negative things in your life. After you’ve written down the negative list, reframe the negatives into “what you want instead” items which go on the positive list, and scratch out the negative on the list. Once you’ve transformed all of the old negatives in your list into positives in your other list, burn the negative list.
  • Eliminate useless thoughts. This one has had the most powerful influence on my frame of mind and stopped long bouts of useless screaming at other drivers. As James Altucher suggests, every time you have a negative thought, stop and categorize that thought as “not useful.” Once you have a “not useful” thought, stop thinking it. Think of “useful” thoughts instead. It takes a while to get into the habit. When I started this practice, I was like the grumbling dog who’s being taken away from the dog park, dragging, muttering, and showing a lot of displeasure. I so wanted to curse at the knucklehead who pulled out in front of me. But, I realized that no matter how much screaming, imprecations, and curses I uttered, it wouldn’t change that fact that a) this person pulled out in front of me, b) I didn’t hit said person, and c) the world was going to keep on spinning anyway. It wasn’t a useful thought. After some practice, though, I got better. Now, I can shrug off a lot of things because, well, they’re not useful. Try it. I bet you’ll like it.

Next time you’re going to make a decision that has to do with your money or your future happiness, check on Money Brain’s mood ring and see how you’re feeling. If you’re feeling down, stop, take a minute, and go through some of the steps I’ve outlined above to improve your mood. You’ll make wiser decisions, and your future self will thank you for not making some boneheaded decision because you were grumpy.

Have you ever made a decision you regretted simply because of the mood you were in? Tell us about it in the comments below!

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John Davis
John Davis is a nationally recognized expert on credit reporting, credit scoring, and identity theft. He has written four books about his expertise in the field and has been featured extensively in numerous media outlets such as The Wall Street Journal, The Washington Post, CNN, CBS News, CNBC, Fox Business, and many more. With over 20 years of experience helping consumers understand their credit and identity protection rights, John is passionate about empowering people to take control of their finances. He works with financial institutions to develop consumer-friendly policies that promote financial literacy and responsible borrowing habits.

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