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How to make good financial decisions, even under pressure

19 Feb 26

Most “bad” financial decisions don’t happen because someone isn’t “smart”. They happen because the decision lands at the worst possible moment.

You’re tired. You’ve had a shock expense. The inbox is relentless. A family conversation has stirred something up. The market is wobbling. Someone’s pushing you for an answer. Suddenly, a choice that should be straightforward becomes loaded. Your brain stops asking “What’s the best long-term move?” and starts asking “How do I make this feeling stop?”

Under pressure, even highly capable people become more likely to:

fixate on the immediate problem and ignore the wider picture
overreact to short-term noise
delay decisions that matter, then rush decisions that don’t
choose certainty, even when it’s expensive
take risks they wouldn’t normally take, just to feel back in control

This is normal human behaviour. It’s also predictable, and that’s good news, because predictable patterns can be planned for.

What follows is the human side of money: what pressure does to the brain, why it changes our judgement, and how you can design decision-making that holds up when life gets messy.

Pressure changes the way you think, not who you are

When you’re calm, you have access to the parts of your mind that do planning, weighing trade-offs, and thinking in probabilities. Under stress, your brain prioritises speed and safety. It’s a survival feature, not a flaw.

Researchers often describe this shift as a tug-of-war between emotion and deliberation. In practical terms, it can feel like:

tunnel vision
urgency
black-and-white thinking
“I just need to do something”
the sense that you’ll be judged for getting it wrong

We’ve long known that stress affects both mind and body and can influence how we process information and respond.

Neuroscience research also shows that stress can alter brain function in ways that affect judgement and emotional regulation.

So if you’ve ever looked back at a money decision and thought, What was I thinking? the honest answer is often: you were thinking with a stressed nervous system.

Why “smart” doesn’t protect you

Intelligence helps you understand options. It doesn’t automatically protect you from the conditions that make humans choose poorly.

In fact, smart people can be more vulnerable in a few specific ways:

1) You can rationalise almost anything

When a decision is emotional, the mind often looks for reasons that feel logical. You don’t feel scared, you feel “prudent”. You’re not avoiding, you’re “waiting for clarity”. You’re not chasing a win, you’re “being decisive”.

This isn’t dishonesty. It’s your brain protecting you from uncertainty.

2) You’re used to competence, so uncertainty feels like a threat

Pressure + money can trigger identity questions: What does this say about me? Have I failed? Should I have known better? That can make the decision feel higher-stakes than it truly is.

3) You can become overconfident in the wrong moment

Stress narrows attention. If you’re normally analytical, you may assume you’re still doing careful thinking, when actually you’re “locked on” to a single outcome: Make the discomfort go away.

Under pressure, we default to predictable biases

Behavioural economics is essentially a map of the ways humans reliably diverge from “rational” decision-making. The most famous example is prospect theory, developed by Daniel Kahneman and Amos Tversky, which demonstrates that people feel losses more strongly than gains and that framing significantly shapes decisions.

Here are a few that show up all the time in real financial lives.

Loss aversion: “Don’t let me lose”

When we’re under strain, we often become more sensitive to downside. That can lead to:

selling investments after a drop to “stop the bleeding”
avoiding sensible risk because cash feels safer
holding on to something that isn’t working because selling would make the loss feel real.

Short-termism: “Fix today, worry about tomorrow later”

Pressure compresses time. The future feels vague, and the present feels urgent.

The hot–cold empathy gap: “Future me will handle it”

Research by behavioural economist George Loewenstein shows that people routinely underestimate how differently they will think and behave in emotionally charged states, a phenomenon known as the hot–cold empathy gap.

It explains why we make perfect plans on Sunday evening and very different choices on Wednesday afternoon.

Stress is not just emotional. It’s biological, and it can shift risk preferences

It’s easy to think of “pressure” as a mindset issue. But did you know that biology plays a role too?

A study published in the Proceedings of the National Academy of Sciences found that prolonged elevation of cortisol — a key stress hormone — altered financial risk preferences, generally increasing risk aversion and changing how people evaluated probabilities.

You don’t need the scientific detail to take the point: your tolerance for risk is not fixed. It can shift like everything else, depending on what’s happening in your body and your life.

That’s why the same person can feel confident in one instance and deeply cautious in another.

Scarcity steals mental bandwidth

Pressure often arrives as scarcity: not enough time, money, energy, or certainty.

Psychological research shows that scarcity captures attention and reduces cognitive bandwidth, making it harder to plan, evaluate options, and think long term.

This matters because good financial decisions often require spare mental capacity:

comparing options
reading the small print
asking better questions
waiting long enough to feel calm
thinking long term, and big picture

In our experience, when someone is short on bandwidth, telling them to “be disciplined” rarely helps them. Reducing the complexity of the decision is far more effective.

Sleep deprivation is a financial risk factor (yes, really!)

Sleep is one of the most overlooked drivers of financial behaviour.

Research reviews have found that sleep deprivation can impair judgement, increase emotional reactivity, and influence risk-taking and decision processes.

If you’ve ever agreed to something late at night, made an impulsive purchase, or panicked about money at 3am, this will feel familiar.

A simple Finura principle: avoid making irreversible financial decisions when you are depleted. Build a pause into your process deliberately.

“Vulnerability” isn’t a label. It’s a situation

The UK Financial Conduct Authority defines vulnerability as a state that can be driven by health, life events, resilience, or financial capability, and recognises that anyone can become vulnerable depending on circumstances.

We value this framing because it reflects real life: you can be exceptionally capable and still be vulnerable in a particular season.

Redundancy. Bereavement. Divorce. A new child. Caring responsibilities. A business setback. A diagnosis.

The money decision isn’t happening in isolation. It’s happening inside a human life.

What helps: build a decision system that works when you’re not at your best

If pressure changes how you think, the answer isn’t “try harder to be rational”. The answer is to design decisions so they are less exposed to stress.

1) Create a pause rule for big decisions

For anything difficult to undo (selling investments, locking into long-term products, making major gifts, taking on significant debt), establish a default pause:

24–72 hours minimum
no late-night decisions
no decisions immediately after an emotional trigger

This is not procrastination. It is emotional risk management.

2) Use a two-step decision: safety first, optimisation second

When someone is under pressure, they often confuse stability with the best plan.

Ask:

What do I need to feel safe in the next 1–3 months?

Then:

Now that I’m stable, what is the strongest long-term move?

This prevents panic-driven “solutions” that quietly create lasting damage.

3) Reduce the number of choices

Choice overload increases avoidance, particularly during stressful periods.

Simplifying your financial life often means:

fewer accounts
clearer purpose for each pot
automated contributions
a short list of agreed rules

4) Write down your “calm rules” in advance

When you are calm, document personal rules such as:

“I don’t change my investment strategy based on headlines.”
“If I feel urgency, I pause.”
“If markets fall, I review the plan, not the price.”
“I talk it through before I act.”

This approach helps bridge the hot–cold empathy gap identified in behavioural research.

5) Use behavioural design, not willpower

The Behavioural Insights Team’s EAST framework — Easy, Attractive, Social, Timely — shows that behaviour improves when environments are structured thoughtfully.

In personal finance, that can look like:

Easy: automate saving and investing
Attractive: connect money to meaningful goals
Social: involve a trusted partner or adviser
Timely: align actions with natural review moments

6) Bring the decision out of your head

Pressure thrives in isolation. Even one thoughtful conversation can widen perspective and soften urgency.

Good financial advice is not about hot tips. It is about providing steadiness:

clarifying what matters
separating signal from noise
turning fear into a structured plan
ensuring today’s decision does not undermine the next decade

The Finura view: good decisions are made with good support

If you take one thing from this, let it be this: poor decisions under pressure are not a moral failing. They’re often a capacity issue.

Money touches safety, identity, family, freedom, and fear. If you’re human (which, if you’re reading this, you likely are), you’ll sometimes make choices that soothe the moment rather than serve the long-term plan.

The goal is not to remove emotion from money. The goal is to make room for emotion without letting it take the steering wheel.

Frequently asked questions

Why do I feel anxious about money even when I appear financially secure?

Because the brain responds to perceived threat, not just numerical reality. Stress can influence cognition, emotional regulation, and decision-making. External uncertainty, life transitions, or responsibility for others can all heighten sensitivity to financial risk.

How can I stop making impulsive decisions when stressed?

Introduce friction. Pause before acting, avoid decisions when exhausted, and seek a second perspective for anything significant. A small delay often creates enough psychological distance for clearer thinking.

Can stress genuinely change my appetite for risk?

Yes. Research shows that elevated cortisol levels can shift financial risk preferences. This is precisely why major decisions benefit from calm conditions and thoughtful guidance.

Does sleep affect financial judgement?

Evidence suggests sleep deprivation impairs decision-making and can influence risk behaviour. Treat fatigue as a temporary state — not a reliable basis for long-term choices.

When should I seek professional financial advice?

Consider getting in touch with professionals when a decision is difficult to reverse, emotionally charged, or materially significant to your future. Advice shouldn’t remove your sense of control; it should strengthen your confidence that the decisions you make today will continue to serve you in the years ahead.

Further reading on stress and financial decision making

1. Stress and financial decision-making

Rogier Mulay (2025) — Making decisions immediately post-stress: Evidence for reduced risk taking and altered cognitive control (Shows how acute stress affects risk preferences and decision quality under time pressure)
Sainsbury Wellcome Centre & University of Nottingham (2026) — Under pressure: Does everyday stress affect financial decisions? (Latest lab research suggesting chronic stress can increase impulsivity and future discounting)
B. Szaszkó (2025) — Does acute psychosocial stress alter risk-taking? (2025 pilot study on stress and risk-taking behaviour under competitive conditions)

2. Biological and psychological pathways

K. Doroc et al. (2025) — Acute stress impairs decision-making quality at varying levels of complexity (Finds higher cortisol impairs attention, especially under time pressure)
JM Jurgensen (2024) — Psychosocial stress, hormones and impulsivity/risk-taking (Links stress-induced hormonal changes to differences in risk and delay discounting)
UCL (2024) — Financial stress linked to worse biological health (Shows that prolonged money stress affects immune and neuroendocrine systems)

3. Behavioural science and psychology of money

International Journal of Economic Surveys (2025) — Interconnectedness of emotions with investment decision-making (Conceptual overview of emotion as a determinant of investment choices)
Nest Insight (2025) — Impact Brief: Precarious Lives and Financial Decision-Making (Practical research on how financial insecurity influences decisions)
Finura insight: Psychology of inheritance & money conversations (2026) (Latest Finura-aligned commentary on how stress limits complex decision-making)

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