Making Better Financial Choices Under Stressful Conditions

PhD and research director at The Decision Lab shares practical tips for a smart money mindset, even under stress


Erasing stress and anxiety from daily life isn’t an option for most people today, especially when it comes to finances during uncertain times. COVID-19 has uprooted the lives of many—shifting our attitudes about money and our financial habits that we followed during more “normal” times. Throughout society, we are now taking the time to evaluate what has (or hasn’t) worked to better prepare ourselves and create financial resilience. As ever, our goal at The Decision Lab is to share content that is useful, evidence-based, and offers fresh insights.

As we’re living our new financial lives primarily within our own homes, now is the time to step back, evaluate our past money decisions and identify a financial philosophy that we can apply in both challenging and stable times. In March 2019, along with my colleagues at The Decision Lab, we partnered with Capital One to understand the effects of stress on consumers’ financial attitudes and behaviors in order to uncover insights and practical tips to help people make better financial choices even under stressful conditions. 

For many Americans, 2020 has become a year of anxiety, making the findings of our research even more relevant and useful today. Through a nationally-representative sample of more than 1,000 Americans, the Capital One Mind Over Money Study sheds light on how deeply stress can impact financial decision making. But it also offers hope: even a quick change in perspective can help us feel more in control of our finances.

In order to understand how the effects of stress can be alleviated, the study asked participants to perform a quick mindset shifting exercise. It found that thinking about long-term goals for even a few seconds can start to reverse these effects, helping people to become better at saving and budgeting and more confident about being able to deal with their finances. Thus, ‘big-picture’ thinking styles can lead to healthier financial behaviors, even under stressful conditions. 

Now more than ever, I’m proud to have been part of this study and help raise awareness for the learnings, because stress is such an important, prevalent topic, especially as it relates to financial decision making. 

While “big-picture” thinking may seem daunting or even unrealistic at certain times, it’s important in developing resilience and a smarter money mindset. The good news is that there are simple, accessible tips to practice that can set you on a path to long-term growth:

Learn, Forgive Yourself, Move On

When we make a mistake, we often beat ourselves up over and over again every time we think about it, dragging the bad decision around sometimes for weeks or more. This discourages us, increases our distress, and ultimately makes it harder to make the right choices in the future. Instead of beating yourself up, be kind to yourself. Once you’ve realized what the mistake was, forgive yourself and move on. You’ll know better next time. Forgiving yourself and managing your stress levels will help you to make better decisions down the road.

Keep Your Goals In Front Of You

It’s natural to be tempted to buy items in the short-term that don’t line up with long-term goals. To overcome this, the Mind Over Money Study found that keeping your long-term goals top of mind can help you make smarter financial decisions. One way to do this is by taking a picture of something that represents a goal and making it the background screensaver on your phone. That way, whenever confronted with a decision, you can be reminded of how it may affect your longer-term financial goals.

Share Your Goals with People Who May Have Similar Goals

Research has demonstrated that people are more likely to follow through on their goals when the goals are shared publicly with others, especially with others who are also working towards similar goals. Under financial strain, making your goals more social, especially with others who might share them, can help to make them more real. By surrounding yourself with people who know and share your goals, you are creating a virtuous circle that will make your goals easier to achieve. And you’ll be helping the people around you to reach their goals as well, because we all get to enjoy the benefits of engaging with each other in this way.

It’s No Longer About “I,” It’s About “Us”

Under times of financial stress, it can be easy to get bogged down by your problems and forget that there are other people around you who might also be going through tough situations. Shifting your focus from yourself to other people can go a long way in changing your mindset, reducing worry and making you feel good while helping others. By doing something kind for a friend, a family member or even a stranger, you will be able to abstract yourself from your own situation so that you can tackle your own challenges with fresh eyes when you come back to them.

It’s important to remember that there is no “one size fits all” model or advice to tackle times of financial stress and uncertainty. But luckily, we are all in this together, and there are a growing number of free resources and tools available. If you are experiencing financial difficulties due to COVID-19, I encourage you to learn about the ways Capital One is supporting its customers by visiting this page.


Dr. Brooke Struck, Research Director at The Decision Lab

Dr. Brooke Struck is a Research Director at The Decision Lab, a Canadian not-for-profit firm promoting social good through behavioral science research and consulting. Using his signature critical style, Brooke unpacks challenges to find out what's really at issue. He draws on a rich, interdisciplinary background to develop solutions that actually work and that the client can realistically implement. His approach relies on strong relationships (with clients as well as a diverse network of experts) married with an unwavering focus on impact. Before joining TDL, Dr. Struck consulted in evidence-based policy and data-driven decisions, advising clients such as the European Commission, the US National Science Foundation, and the Government of Canada. He holds a PhD in the philosophy of science.

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