As a content editor for a financial company, I never thought I’d be sitting in a lab with electrodes on my head measuring my brain activity — at least not for work. But there I was test driving a fascinating new study by ThinkAlike Labs, which was sponsored by Northwestern Mutual. The study analyzed people’s brainwaves to see how financial decisions really affect your brain, decisions, and emotions.

The researchers gave people like me an electroencephalogram — or EEG — and presented several common financial scenarios like budgeting, investing for college, buying a home and planning for retirement. The whole time they monitored each person’s brainwaves. Researchers threw a bunch of potential financial decisions at people and then asked those people to make choices both with and without help.

brain on finance image
Me test driving the study. Northwestern Mutual

The results? Without help, people stressed out their brains far more than when they had help. The research found that people’s brains were 21 percent more relaxed when they had help, and they had a 28 percent stronger ability to recognize and understand crucial concepts. In addition, the research showed people’s brains needed 20 percent more effort to concentrate without help.

By the time I sat down to try the study, I knew the results. But I was convinced my brain would be different. After all, I write about this stuff for a living. I know the difference between a deferred annuity and a deferred income annuity (if you’re curious, this article explains it). My wife and I have a financial plan, good credit scores and a good idea where our money is going (even though we never seem to have quite enough). Finances don’t stress me out — or so I thought. Turns out my brain had to work just as hard as everyone else’s when I didn’t have anyone helping me with financial decisions. In fact, my brain needed 28 percent more effort to concentrate without assistance.

We didn’t come born with the ability to process a financial decision. That’s not something that our ancestors had to be doing thousands of years ago.

Neuroscientist Sam Barnett says the reason finances stress our brains is because they weren’t designed to be good with money. “The brain is a remarkable organ,” says Barnett. It’s designed to adapt to new situations. “We survived not because we were faster and stronger than animals, but because we could adapt,” he says. “But in order to do that, we actually have to put effort into it.”

And learning about finances takes a lot of effort, he says, because we’re still adapting. “We didn’t come born with the ability to process a financial decision. That’s not something that our ancestors had to be doing thousands of years ago,” Barnett says.

The results of the study underscore the benefits of working with a financial planner.

“Everyone’s affected by this and everyone can evidently benefit from financial advice and guidance, regardless of whether you have advanced education, or other factors like socioeconomic status,” Barnett says. This apparently holds true for those of us who write about financial planning regularly.

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