MONEY BIASES (“Sinong bias mo?” How your hidden biases affect your actual money behavior)

MONEY BIASES (“Sinong bias mo?” How your hidden biases affect your actual money behavior)

Jun 29, 2022

“Sinong bias mo?”

The first time I heard this question, I was clueless because I’m not “BTS-literate.”

BTS fan or not, our bias is an interesting and important subject to talk about. Bias is a prejudice in favor of, or against one thing, person, group, idea, etc., that may be considered “unfair” because of the absence of neutrality.

But the reality is, everyone has biases. You are not a person if you do not have biases. We have biases not just in our choice of BTS member, but also in food, time of the day, clothes, movies, songs, shoes, what we consider as handsome, beautiful, among our children (they say, even if parents will never admit it to having favorites), and in everything actually. Guess what? All these biases also affect the way we deal with money. And that is our article topic today.

Have you taken your FQ Test? If not, or if you’ve taken it at least six months ago, you may take it by clicking  FQ Test. After taking the test, check which parts are difficult for you. You may find the answers in YT. But more than the Knowledge portion answers, check what difficulties you’re having in the Behavior portion

Why is it too difficult to observe the three basic laws of money? Aren’t they simple enough?

1. Pay yourself first;

2. Get only into a business that you understand and seek advice only from competent people;

3. Make your gold work for you. Make an army of golden slaves before you buy luxury.

The answer: Simple is not always easy. We find it difficult to observe the simple laws of money because of your biases.

In FQ Book 2, I discuss 16 behavioral biases that affect the way we deal with money. Check them out by answering how greatly you are affected by them.

  1. Loss Aversion – Do I feel the impact of a loss twice as much as the impact of a gain?
  2. Framing Effect – Is my choice is influenced by the way things are presented or framed through different wordings, settings, and situations?
  3. Sunk Cost Fallacy – Do I continue a behavior or endeavor as a result of previously invested resources (money, time, effort), regardless of what the current and future costs and benefits are?
  4. Anchoring Effect – Do I get influenced by the first impression or number I am exposed to, regardless of its relevance to the evaluation or task at hand?
  5. The Price of Free – Am I more attracted to the price of zero than any other price, no matter how low? Ang sarap ng libre, no matter what?
  6. Effort for Payment – Do I tend to put value on services and products where I can see the amount of effort put into providing them?
  7. Ego Depletion – Is my ability to make sound decisions a limited resource that can be drained by decision overload, hunger, self-restraint, and extreme fatigue?
  8. Pain of Paying – Do I feel that some purchases are more painful than others depending on the mode of payment (cash, credit card, debit card, etc.), separate fee or included in total price, prepaid or paid frequently, paid incrementally vs. one-time payment?
  9. Mental Accounting – Do I treat money differently depending on where it comes from and where it is going, forgetting that money is fungible or interchangeable?
  10. Opportunity Cost Neglect – Do I tend to ignore what I’m giving up when making a choice on how to spend my money?
  11. Hyperbolic Discounting – Do I tend to choose smaller but sooner (now) reward over a larger but later reward? Am I present-biased?
  12. Availability Heuristic – Do I tend to rely heavily on immediate examples and other information that are available at the moment as basis for evaluating something?
  13. Illusion of Control – Do I believe that I can control or influence the outcome of random events when in fact, I cannot?
  14. Default Bias – Do I tend to stay in the default/automatic option, avoiding complex or even easy decisions, consciously or unconsciously?
  15. Endowment Effect – Do I tend to value something more just because I already own it, or put some labor in it?
  16. Confirmation Bias – Do I tend to search for, interpret, favor, and recall information in a way that confirms or supports my prior beliefs?

So tell me, which among the 16 behavioral biases are you most prone to? What is your MakEmong (ME) Score in each of the biases? (Click to know your ME Score) If you’re honest enough, you will admit that even if you know fully well all these biases, you still fall for them from time to time.

Does that mean that we doomed to fail in handling our money? Is High FQ impossible to attain?

Fortunately, the answer is no. In fact, we can all have a High FQ if we honestly call out our own money biases and do something about them. Remember, we are not just Emotional Emongs but also Makatwirang Maks. We just have to summon our rational side to create designs in our everyday lives so that doing the right thing, whether it’s New Year or not, we’re hungry or satisfied, happy or sad, and so on, because we have already created the proper Choice Architecture (using design to make it easier for us to pick the right things) in our environment.

Knowing what you know (and admit) now, will you do something to protect yourself from yourself?

I hope so. Cheers to High FQ!


1. Join me on Money Lessons with FQ Mom, June 30 with my special guest JR Caparas Rosales of Sabon Depot.

2. To learn more about your money behavior, get your copy of FQ Books and for your loved ones too. The principles you will learn from here are not only applicable in your financial life but all the other important aspects of your life. 

3. How good are you with money? Do you want to know your FQ Score? Take the FQ Test and get hold of your finances now. Scan the QR code or click the link

This article is also published in Philstar.