Every day, we make thousands of decisions. Should I wait for the truck ahead to pass or cross the street now? Do I order fries or a meal with salad? What tip should I give the taxi driver? These decisions are usually made quickly and without much thought. Psychologists call them aheuristicsa, which is a set of rules that help us navigate our daily lives. These mental shortcuts would make it impossible to cope with the many choices we face every day. These shortcuts can lead to predictable mistakes in some circumstances. If we are aware of what to look out for, however, they may not be necessary. For example, did you know that our natural bias is to sell investments that do well, while keeping those doing poorly. We also often choose suboptimal payment plans for insurance and purchase insurance we do not need. And why do so many of us fail to enroll in our employeras corporate retirement plans, even when the employer offers to match our contributions?Behavioral finance is the study of these and dozens of other financial decision-making errors that can be avoided, if we are familiar with the biases that cause them. This course will examine the predictable mistakes and reveal where they are most prevalent. The course is designed to help participants make better financial decisions. You will learn how to make better spending decisions, save money, and invest for the future.
