Why Your Brain Lies About What You Can Afford

Paul Onu

12 Aug 2025 • 4 min read

Why Your Brain Lies About What You Can Afford | Onu App

Uncover cognitive biases that distort affordability and use Onu’s AI for real-time checks.

Your brain uses biases like loss aversion and mental accounting to make you think you can afford more, per The Atlantic and Decision Lab. This guide explains these lies and how to overcome them with Onu’s tools.

Onu’s AI offers affordability alerts to counter biases.

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Common Cognitive Biases in Finance

From CNBC and Investopedia:

Loss Aversion: Fear losses more than gains.
Endowment Effect: Overvalue owned items.
Sunk Cost Fallacy: Continue bad investments.
Anchoring: Fix on initial info.
Confirmation Bias: Seek agreeing info.

Example: Buying because it's "on sale," ignoring budget.

Onu’s AI detects bias-influenced spending.

Biases Affecting Affordability

Table from KahlerFinancial and Lifehacker:

Bias	How It Lies	Example
Loss Aversion	Avoid cutting losses, overspend to "save."	Keeping subscriptions unused.
Risk Aversion	Avoid good risks, miss investments.	Fearing stock market.
Herd Mentality	Follow crowd, buy trends.	Crypto hype buys.
Anchoring	Base on first price.	Thinking $100 item is cheap after $200 anchor.
Confirmation Bias	Ignore warnings.	Justifying luxury as "needed."

Insight: Biases lead to poor decisions, costing money.

Onu alerts on bias-driven purchases.

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Step-by-Step: Overcoming Biases

30-day plan from QuantifiedStrategies and PMC:

Learn Biases (Days 1–5): Read about them. Onu provides tips. Example: Recognize anchoring in shopping.
Track Spending (Days 6–10): Log decisions. Example: Note emotional buys.
Set Rules (Days 11–15): Use objective goals. Example: Budget limits.
Use Tools (Days 16–20): Onu alerts for affordability. Example: Flag high-risk buys.
Review (Days 21–25): Analyze past decisions. Example: Adjust for sunk costs.
Maintain (Days 26–30): Build habits. Example: Seek diverse info.

Onu automates bias correction with alerts.

Real-Life Example: Correcting Biases

Meet Lisa, affected by confirmation bias:

Bias: Justified expensive vacations.
Track: Saw pattern in Onu data.
Rules: Set affordability thresholds.
Alerts: Onu flagged overspend.
Review: Saved $1,000/year.

Result: Better financial health.

Financial Impact of Biases

From Business Insider:

Costs: Overspend $500/year on biases.
Savings: Overcoming grows wealth.

Example: Avoiding $200 impulse saves $1,300 in 5 years at 7%.

Onu shows bias impact on your finances.

Context: Biases in 2025

Trends from PMC and YouTube:

Persistence: Biases affect all income levels.
Intelligence: Smarter people more susceptible.

Example: Economic changes amplify biases.

Onu adapts to 2025 bias trends.

Final Thoughts

Biases trick your brain, but awareness and Onu can help. Start countering them for better affordability judgments.

Sources: theatlantic.com, thedecisionlab.com, kahlerfinancial.com, vcmi.net, cnbc.com, pmc.ncbi.nlm.nih.gov, businessinsider.com, blog.navitmoney.com, lifehacker.com, youtube.com. This article is for informational purposes only and not financial, legal, or tax advice.

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