Money Mindset Quiz: How personal biases can impact your financial decisions

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People make money decisions based on a lot of factors including their short-term needs, financial goals, and available resources. Emotions and biases we may have about money can also play a role, oftentimes without us even realizing it's happening. Their influence can be especially strong when we're faced with complex or stressful situations, sending our financial decision-making off course.
Research has demonstrated that when people face complex decisions, there is a natural impulse to fall back on gut feelings or our own rules of thumb to simplify the situation. The problem is that those instincts don't factor in the long-term planning that a sound financial strategy requires.
— Nevenka Vrdoljak,
senior qualitative analyst,
Chief Investment Office, Merrill and Bank of America Private Bank
You don't have to wait until your biases interfere with your financial life to do something about them. Take the quiz below to test your gut reactions to some common situations. Learn what biases may be at play and what you can do about it!

Question 1:One day you decide to check out the value of your home on a real estate website. You're surprised to see that the value has decreased. What's your first thought?

Question 2:You have some extra money and are considering how to use it. Which action do you feel most strongly about?

Question 3:You're planning to invest some money in a stock. How do you decide what to invest in?

Question 4:You are booking a long-awaited trip when you suddenly realize that a large bill is about to come due. What would you do?

"Being aware of our own habitual patterns of thinking is essential to making good financial decisions. These patterns can often lead us to think we possess special knowledge that we do not have, that we should follow the crowd when we shouldn't, or that responding to recent events is more important than sticking to our long-term goals."
— Anil Suri,
portfolio construction and investment analytics executive,
Chief Investment Office, Merrill and Bank of America Private Bank
Did any of your answers reveal behaviors that strike a chord with you? For better or worse, we all have unconscious biases and emotional reactions that impact our financial decisions, increasing the risk of financial missteps. The key to mitigating their negative impacts is being mindful of them. Make a note of the behaviors you encountered in this quiz, and when similar scenarios arise in life, take a moment to slow down your decision-making process. Consider your reactions in light of your financial goals and the plan you've made to achieve them.

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