Why do people often make irrational financial decisions?

People often make irrational financial decisions because they're more influenced by feelings than numbers.

Imagine you have two candy bars: one is a big chocolate bar that costs 10 coins, and the other is a smaller gummy bear that costs only 5 coins. At first, you think, "Oh, the gummy bear is cheaper!" So you buy it. But then, when you see your friend eating the big chocolate bar, you feel sad and wish you had bought that instead, even though you still have plenty of coins left.

This is like how adults sometimes act with money. They might buy something just because it looks good right now, even if it's not the best choice in the long run. It’s like choosing a toy that sparkles but breaks easily, over one that's dull but lasts forever.

Sometimes people get excited or scared, and those emotions can make them act differently than they usually would. For example, if someone sees a sign that says "Buy now, only 5 coins!" they might rush to buy something they don't really need just because it feels like a good deal.

But later, when the excitement fades, they might realize they could have saved their coins for something better, like buying more candy bars!