Five Subconscious Biases That Make You Lose Money

Five Subconscious Biases That Make You Lose Money

There’s hardly anyone on the planet not looking to make more of it when it comes to money. I’ve lost count of how many WhatsApp classes I’ve been invited to attend, all promising to teach me how to make money. P.s stop giving my number to all these Amazon people. Edakun, I’m not interested. 

As a society, we tend to focus more on increasing our earning power, and while that’s great, it’s only half of the picture. So in this article, I’ll try to expose part of the other half by explaining some subconscious biases that might be making you lose money right now. 

Self-Serving Bias

The self-serving bias is your tendency to think good things happen because of your choices, but bad things happen because of things that are out of your control. You successfully completed that deal because you put in the hard work. Still, you’re broke at the end of the month because you had that unexpected emergency. 

Yes, some things can spring up, but by failing to acknowledge how your own choices contributed to your empty wallet at the end of the month, you’re unlikely to see what you need to change. 

Why didn’t you save that extra money you made for a rainy day? Or better still, why don’t you have an emergency fund yet?

Availability Heuristic

Complete these sentences:

It’s so hot; I need a chilled bottle of ___?

I’m bored; I should probably start a new series on ___?

Did you answer with Coke and Netflix? Now, how often do you patronize those brands? 

If the availability heuristic wasn’t a thing, companies wouldn’t spend so much on advertisements. This bias has to do with how we’re more likely to spend money on immediate examples that come to mind when making decisions. 

While that speaks well of the brand’s marketing, you could be leaving money on the table every day if you don’t explore your options. Those vendors you patronize are their prices really the best, or do you just opt for them because everyone on your contact list reposts their graphics? 


Have you ever heard two conflicting versions of a story? Who did you believe? Most people tend to stick with whoever’s story they heard first. This phenomenon is known as the Anchoring bias. We’re all guilty of it, and sometimes that works against us. 

Why do you think stores like Shoprite write their prices as 1999.99? Most of the time, your brain processes only the first digit and discards the other numbers. So while I’m thinking, “Tide, the cost of this item is around 1000, so if I pick two, that’ll be like 2000,” the real bill is closer to 4000.  

Another example is when stores claim to give 50% off, so you get excited at the opportunity to save more. Only to find out later, they increased their prices before the so-called sale. 

The best thing to do is not jump at the first offer you see for fear of losing out. Take a moment to evaluate the information you have, compare it when possible, then make your choice. 

Sunk Cost Fallacy

Imagine a friend comes to you to borrow N10,000, with the promise of paying you back at the end of the month. A week before you’re to receive your money, the friend calls you, there’s a wrinkle in their plan, but if you loan him an extra N3000, he’ll pay you back N15,000. 

It’s only N3000 extra, you think, so you send him the money. On the agreed day, he says he needs only N2000 to quickly process the payment; he’ll even add an extra token for the trouble. You’ve already come this far. Why stop now? 

Two days later, he comes begging. There were some unexpected circumstances, the money is gone. You kick yourself. Why didn’t you get out when it was only N10,000? Now you’ve lost fifteen. 

Sunk cost fallacy is about investing more in things that have cost us something, even when they’re not yielding the results we want. The truth is it’s hard to give up on something you’ve spent a lot of time and money on, but sometimes you have to accept that they’re not going to work out and let it go. 

Gambler’s Fallacy

Gambler’s Fallacy preys on the fact that deep down, we all feel the world owes us some form of justice. “This stock has consistently lost value during my last three trading sessions, so it should pick up on my fourth.”

It’s our tendency to ascribe the results of past events to future possibilities. That inner voice says the last four coin tosses in a row were heads, so the next one must be tails. When in reality, the chance of either outcome remains 50/50.  

Deal with facts, not sentiments. The universe won’t toss you a bone because you’ve been down on your luck recently. 

So there you have it. Five subconscious biases that make you lose money. Did you catch yourself falling for any of these biases? 

If you liked this piece, check out more cognitive biases in the modern world that could be affecting your memory, social life, and more. 


Cover Art: Storyset Illustrations

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