This episode is part six of our six-part series on cognitive biases and how they affect our spending habits and financial decisions. (Make sure you check out part 1, part 2, part 3, part 4 and part 5 if you haven’t yet.) In this episode, we discuss what the Ostrich Effect is and how it is impacting the way we approach money decisions. Do we tackle them head-on or do we stick our head in the sand?
In this episode, you will learn:
- The Ostrich Effect – what it is and how it’s being used to affect my decision-making
- How it shows up on a regular basis
- The impact it has on your future potential with money
- How you can overcome this bias
How to overcome the ostrich effect:
- Solution 1: Focus on the idea that paying attention gives you the power to make a decision when necessary. Not paying attention means no decisions are made. It’s disempowering.
- Solution 2: Stop and ask yourself, “Why am I doing this? Why am I ignoring it or putting it off?” Recognize that just because you might think the news will be negative, doesn’t mean it will be. And, even if it is, once you know the reality, you can consider taking concrete steps to improve it. Dealing with debt may sometimes make you feel powerless, but the ability to make changes is what gives you control.
- Solution 3: Seek help. Take charge of your finances and, if necessary, seek help from a financial coach. The more you know about your money, the more prepared you’ll be to handle it responsibly and positively. Commit to asking for help when you notice that parameters you’ve set for yourself are falling out of line.
- Part 1 of 6 of the Cognitive Bias series
- Part 2 of 6 of the Cognitive Bias series
- Part 3 of 6 of the Cognitive Bias series
- Part 4 of 6 of the Cognitive Bias series
- Part 5 of 6 of the Cognitive Bias series
- Related blog post: 13 ways to conquer financial temptations so you can spend less, save more and be happier!
- Join our free private Facebook group, Fiscal Fitness money strategies for driven professionals and solopreneurs, here.
- If you are inspired to help others with their money ask to join our free private Facebook group, Financial Coaches Unite here or check out the Financial Coach Academy here.