Behavioral finance explores how your mind influences your financial decisions. For the disciplined wealth builder, March offers a chance to master two specific concepts: herd mentality and mental accounting.
Herd mentality involves the urge to follow the crowd by selling during market dips or purchasing speculative assets. Market dips often trigger fear-based behaviors like selling too low and locking in losses, while speculative assets may trigger a fear-of-missing-out (FOMO) buying behavior. You should avoid both actions. Instead, choose to focus on your long-term goals and exclude speculative assets from your strategy. Prioritize the financial well-being of your future self over the crowd.
Mental accounting occurs when you treat different sources of money as separate assets. You might view a tax refund as bonus money rather than a component of your total capital. Yet every dollar is a tool for your personal financial goals. By examining your cash flow, you may discover capital to redirect toward achieving real results. Choosing to direct these dollars now may provide you with greater autonomy later.
When market movements cause concern, your CERTIFIED FINANCIAL PLANNER™ may provide a nuanced perspective based on your individual situation. Every financial choice involves a trade-off. Aligning your habits with your values is essential for long-term success. Focus on your controllables: how much you earn, save, and spend. Use this season to move beyond the noise and focus on wealth building. Taking responsibility for your financial habits today secures your future legacy tomorrow.
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Wendolyn Forbes is CERTIFIED FINANCIAL PLANNER® professional with Wealth Transition Finance, A Member of Advisory Services Network, LLC. Wendolyn is a fee-only financial planner and member of the National Association of Personal Financial Advisors (NAPFA). CFP Board owns the marks CFP®, CERTIFIED FINANCIAL PLANNER™, and CFP® (with plaque design) in the U.S. This material is provided as a courtesy and for educational purposes only. Advisory Services Network, LLC does not provide tax or legal advice. The information contained herein is general and is not exhaustive by nature. Federal and state laws are complex and constantly changing. Consult your own legal or tax professional for information concerning your individual situation.
Originally published in the March 2026 issue of Positively Haywood.