By Cleona Kinahan M.SC CFP® QFA FLIA
After more than two decades in financial planning, one thing has become clear: the biggest influence on wealth isn’t the market – it’s behaviour.
Money decisions are never just about numbers. They’re shaped by emotion, habit, and the stories we tell ourselves about what money means. These influences are quiet, familiar, and often invisible. But they drive far more of our outcomes than most people realise.
That’s what we mean when we talk about financial decision-making bias – the space between what we know we should do and what we actually do.
The Emotional Side of Financial Planning
Every decision carries a story.
In Ireland, many people stay loyal to their local bank even when deposits earn next to nothing. Others hold on to old employer shares – Intel, Google, Amazon – not because they’re performing, but because selling feels like letting go of a chapter in life.
Some keep money separated into different “buckets” – savings here, a pension there, deposits elsewhere – without noticing how disconnected it all becomes. These aren’t financial errors. They’re emotional habits, formed over years of experience and shaped by how we view risk, reward, and security.
The most common ones we see?
- Loss aversion – we feel the pain of a loss about twice as strongly as the pleasure of a gain.
- Overconfidence – assuming a plan is fine without reviewing it.
- Herd behaviour – taking cues from what others are doing, especially in uncertain times.
Behavioural economists have been studying these patterns for decades. We see them every week in real portfolios. And once clients recognise them, decision-making becomes calmer and clearer.
How Behaviour Shapes Outcomes
Markets move, tax rules shift, and life evolves. But the constant factor behind results is behaviour.
When people act on impulse or emotion, even strong portfolios can drift off course. When they act from structure and awareness, the same resources work harder.
That’s where planning makes a difference. A solid plan doesn’t just organise your finances – it reflects your thinking back to you. It shows whether your decisions support what you want, or if they’ve been pulled off track by habit or fear.
At O’Leary Financial Planning, we see planning as alignment. It connects intention, behaviour, and outcome – bringing clarity to what can otherwise feel chaotic.
Small Adjustments, Clearer Results
Most biases don’t need dramatic change – just small, steady course corrections.
- A structured review often reveals where cash is sitting idle.
- Setting clear contribution goals helps temper overconfidence.
- Seeing your total portfolio in one place reduces “mental accounting”.
These simple adjustments create momentum. They replace second-guessing with confidence. Clients often say the process leaves them feeling lighter, clearer, and more in control – not because the plan changed everything, but because they understood it better.
Awareness is what turns good plans into great ones.
The Advantage of Awareness
Good planning doesn’t just manage assets – it manages behaviour.
It helps you separate what’s emotional from what’s rational and keeps both in balance. When you understand the “why” behind your decisions, every next move becomes easier.
That’s where long-term results come from – not from guessing markets, but from making consistent, informed choices.
Clarity is the return most people never measure. Once you have it, every other return improves.
Your Next Step
If this resonates, take a moment to think about what drives your own decisions.
Are they strategic – or comfortable?
Proactive – or familiar?
You might be closer to clarity than you think.
Financial progress starts when awareness meets action.
Let’s map out a smarter strategy while you’re still in your strongest years.
For personalised advice on pension and retirement planning or any other financial advice question, book a Quick Chat at O’Leary Financial Planning.
Alternatively email us at advice@olearys.ie for more information.
Disclaimer: This content is for informational purposes only and does not constitute financial or legal advice. Always seek professional guidance before making decisions.