Introduction to Behavioral Finance

Behavioral finance explains why real people often make financial choices that look irrational on paper but feel completely reasonable in the moment.

This lesson introduces the field, its main idea, and why it matters for investing, spending, saving, and managing risk. You will learn how psychology, emotions, habits, and social pressure shape money decisions—and why understanding those forces can improve outcomes in uncertain markets.

We will focus on the foundations and scope of behavioral finance, saving specific biases, decision errors, and practical correction strategies for later lessons.