As we close towards March, there is reason to be optimistic within a cloud of uncertainty. The learning from 2021 really is about being prepared through external cycles of ups and downs which are largely unpredictable.

When it comes down to money and finances, along with making the most relevant practical choices in your personal financial matters, being prepared is also about making the most relevant emotional choices.

This is what leads to efficient money behaviour with relevant outcomes even in the face of uncertainties.

Here are three primary behaviours which you need to re-look in order to be financially prepared.

Inertia towards change

Richard Thaler and Cass Sunstein, in their globally acclaimed bestseller, Nudge, talk about the realisation, that most people have a tendency to stick with their current situation rather than move to a place of change.

The two foremost reasons they prescribe to this behaviour is loss aversion, the fear that you will lose what you already have (which may feel good enough) and the lack of attention to detail.

It is easier to continue renewing fixed deposits because that’s what you have done for years. It is easier to continue online subscriptions to various news websites because it’s already done.

It is easier to continue overpaying for your haircut because that’s where you have always gone. Why change what seems to be working, what if you lose more than what you already have?

There are so many spending and investing decisions that one makes just in a bid to keep the status quo undisturbed. However, if you overcome the lethargy and look deeper into the details, you will find that there are multiple other options that can be more useful for your current phase in life.

What was relevant for you at the age of 35, need not be the best financial solution 5 or 10 years later, when your lifestyle, your level of responsibility and perhaps life goals have changed too. You must change the dynamics of your financial life along with the change in your life phases.

Desire to emulate another’s lifestyle choices

Keeping up with the Joneses’ is an age-old saying which describes the human desire to make the same lifestyle choices that they see their friends and neighbours with, rather than choosing the lifestyle that suits their own desires the most.

This money behaviour can lead to overspending, debt and most of all, it’s detrimental to not know when to stop. Over time it can lead to silent frustration despite matching lifestyles, because emotionally and mentally you may still not fit in.

In personal investing this translates to blindly following advice from friends and neighbours about how and where to invest. For some, a quick trade in a stock that is rumoured to gain from a merger is exciting because they have the surplus to follow up this trade.

Remember though that the trade is based on rumours, so if those don’t come true, there is a possibility that the price will fall.

If you blindly follow with your savings meant for a down payment on a house purchase and lose money, your friend can walk away but you are left with a burden. Nothing can come out of copying other’s investment choices when your means, your circumstances and financial goals are different.

Search for a quick outcome

We like instant gratification; likes on a Facebook post, Tweets that bring you new followers, a chocolate dessert when the day has been harsh, ice-cold water on a hot summer day.

All of this brings an immediate rush of satisfaction mixed with excitement. However, fulfilling financial goals is less about instant gratification and a lot more about discipline and patience.

Yet our innate desire for a quick outcome, makes us question the return on investments every few months, makes us track the market levels every day and it makes us chase high return investment options without bothering to question risks.

Allow yourself more time and patience, instead of chasing the outcome that is more visible and tangible. It feels like a certainty that crypto assets will multiply money a few hundred times in the next few years because that is the quick outcome you witnessed recently and that’s the pie you want a piece of.

Wait and decide first if the risk and volatility is something you can stomach and with how much of your money can you stomach it?


Ultimately, your money decisions will be driven by your behaviour more than by empirical evidence of smart choices. This year, start by spending time to understand that behaviour, transforming it to your advantage ,and then making the relevant choices that match your unique financial status.