Skip to Main Content
consumer research

Whether you're feeling the high of being cash-flush on payday or the low of an unexpected expense, our attitudes and behaviors around money are deeply personal. Thus, creating marketing strategies for finance companies can be challenging because you must first deeply understand your customer’s mindset.

But what makes customers act the way we do with finances? Is it because of income level? Upbringing? Age?

According to Morgan Housel, a former financial columnist at the Wall Street Journal, it's a combination of all of those things—and more. In his book, The Psychology of Money, Housel discusses how people's behavior toward money isn't always rational and is very individualized. Let's take a look at five interesting insights from The Psychology of Money that illustrate why people behave the way they do when managing their finances—and why it’s critical that marketing strategies, especially for companies in the finance industry, align with consumer beliefs.


Everyone looks at money through the lens of their past experiences.

Human behavior towards money is not a black-and-white issue. It's colored by our personal experiences, upbringing, and individual perspectives. This means that everyone has a different relationship with money, and we all don't act the same when we have access to it.

the psychology of money quote

How can these experiences play out in how people spend money in real life?

Let's say a customer grew up in a family that always struggled to make ends meet. As a result, maybe they're very cautious with their own purchases and tend to save as much money as possible. But, our money behaviors go beyond what happens in our own upbringing. Global events can impact how entire generations think about money. For instance, people who came of age during the 2008 Financial Crisis may be more risk-averse. In fact, millennials are less likely to invest in the stock market than any other age group. Watching parents suffer the fallout of banks and lenders going belly up has made this generation more cautious about investing. Past events now play out in how adults plan for their future.

What's the takeaway here for marketers?

For finance companies especially, marketing strategies need to be tailored to the individual—so that means you need to know your customer, their money motivations, and backstory. What works for one person may not work for another. Consider market research and customer journey mapping to help you get to know your target audience on a deeper level, so you can better market to them.


Being reasonable works better than trying to be coldly rational.

Is it better to be reasonable or rational regarding financial decision-making? While you might think that being rational is the way to go, Housel argues that being reasonable is actually more effective for consumers. Here's why.

Reasonable is more realistic, and you have a better chance of sticking with it for the long run, which is what matters most when managing money.

Morgan Housel, The Psychology of Money

Financial decisions aren't strictly about math and logic (your customers are not robots, after all)—there's an emotional element to it as well. Housel argues that when people try to be too rational about money, they can make sub-optimal decisions and not be able to follow through on them. Think about it—if someone’s trying to save money, is it more reasonable for them to give up their daily $20 designer coffee habit or to stop going out to eat entirely? If they're trying to pay off debt, is it more reasonable for them to give up their car or sell their house?

millennials at coffee shop

The answer is obvious—making small, reasonable changes is more effective (and realistic) than going to extremes. How does this impact marketing strategies? Finance companies can communicate financial goals to consumers in a way that makes it easy to understand and implement by suggesting small, reasonable changes, rather than large, drastic ones, to unlock the marketing messages that will resonate most with customers.

insight 03

Long-term planning is hard because people change.

We've talked about this before—long-term goal planning is hard (and as humans, we're not really comfortable with it). Why? Because people change, and our brains are wired to focus on the present.

Research shows that we're pretty poor forecasters of how much we'll change in the future. In one study, which involved more than 19,000 people ages 18 to 68, people of all ages consistently played down how much they would change in the next ten years. We call this phenomenon the "End of History Illusion."

I'm sure you're wondering, what's the illusion we're referring to?

Well, it's the idea that we think our current selves are pretty close to our final form. We think we know ourselves pretty well—but the reality is that we have no idea how much we'll change. As it happens, we change a lot more than we think we will.

What does this mean for consumer marketing strategies? Finance companies can’t get complacent because the customer’s attitudes will change over time. Even if your customer doesn’t recognize this behavior in themselves. Your customers may need to be gently reminded that their long-term financial goals may change and that it's essential to review them on a regular basis.

finance influencer

Insight 04

Beware of playing the comparison game.

There is no shortage of financial advice out there. From financial influencers to TV personalities, everyone has an opinion on what people should do with their money. And it's easy for customers to get caught up in the comparison game.

Should they invest in stocks or real estate? Should they save or pay off debt? Should they buy a house or rent an apartment? The list goes on and on.

When customers look at other people's financial decisions, it's easy for them to compare themselves and think that they're doing something wrong. But the truth is, there is no one-size-fits-all answer to these questions. And, no one always knows the whole story. Just because someone on social media appears wealthy, successful, or acts like a financial guru doesn't mean they are. They could be up to their eyeballs in debt or living paycheck to paycheck. But, we don't know what's going on behind the scenes—and we don't know the financial game they're playing. Even worse, it's way too easy for people to get caught up in the games of others. Take, for example, the Squid Game crypto scam.

Innocent Investors Become Victims

In November 2021, a crypto token named after the popular Netflix show Squid Game scammed investors out of more than $3 million. The token was launched in October 2021, skyrocketed in price, and promised big things for investors—such as access to a play-to-win game and robust rewards. Squid Game fans caught up in the buying craze, and media attention towards this new token didn't realize that the team behind it was running a Ponzi scheme.

Your customers need to be careful who they take financial advice from and be aware of the agendas of those giving it. Just because someone is popular, or has a lot of followers, doesn't mean they're an expert (or even trustworthy). This means finance companies should have marketing strategies to work with trustworthy, vetted influencers, provide sound advice and guidance, and build a relationship with customers that’s authentic.

Insight 05

Stories are the most powerful force in the economy.

The more you want something to be true, the more likely you are to believe a story that overestimates the odds of it being true.

—Morgan Housel,The Psychology of Money

It's no secret that stories are powerful. They can influence our emotions, behavior, and economic decisions. As it happens, researchers have found that facts are more easily accepted when interwoven in stories. We crave an emotional connection, and stories provide that.

But, sometimes, the stories we tell ourselves are not entirely accurate. We want to believe certain things so badly that we're willing to suspend disbelief. And this can have harmful consequences—especially concerning our finances.

For example, many people want to believe that they're good investors. They want to believe that they have the ability to pick the best stocks or time the market. But, the reality is that very few people can do this successfully. In fact, studies have shown that even professional investors struggle to beat the market. In a 2020 report, over a 15-year period, nearly 90% of actively managed investment funds failed to beat the market—and these portfolios weren't just managed by inexperienced investors. No, they were Ivy League-educated financial pros whose sole drive was to outperform the stock market.

financially confident consumer

And yet, against all odds, people continue to believe the story that they can be the exception. Their stories allow them to see the world in a certain way and tap into their existing beliefs and biases. As such, people are more likely to believe a story that supports their worldview, even if it's not entirely accurate—this should be accounted for in marketing strategies. Finance companies will thrive when they create content that helps people become aware of the stories they may be telling themselves.

Psychology plays a major role in marketing strategies for finance companies.

While dollar amounts hold the same extrinsic value for everyone, our attitudes and beliefs about money are entirely unique. Money is an emotional concept as much as a financial one, and successful marketing strategies for finance companies should consider this.

At the end of the day, marketing is all about understanding people. And there's no area where this is more true than marketing financial products. After all, our emotions, beliefs, and biases influence our financial decisions far more than we realize.

How can you tap into customer insights about money?

When it comes to our hard-earned cash, we all like to think we're in control. But the truth is, our spending habits (and those of our customers) are often driven by unconscious psychological factors. Here are a few key recommendations when strategizing your marketing campaigns for finance companies—

  • Invest in consumer and market research. Learn about the stories your customers tell themselves about money. Understand their attitudes and beliefs. Once you know their motivations, you can develop marketing strategies that resonate with them.

  • Create solutions that bake in long-term financial goals like retirement savings to everyday financial obligations. Think big picture, holistic finances.

  • Empower every investor, even the less familiar. Change the narrative to one of empowerment, accessibility, inclusivity, and personal control in finances.

  • Acknowledge the choices made (and the emotions) in finances. The choice to save or not to save is likely more influenced by present-day realities and emotions than it is future goals.

  • Recognize the journey is unique, and the tools we use should be too. Not every individual has the same financial journey.

Unleash the rebel inside you.

Looking for marketing tactics that resonate with your customers? That’s our thing. At Rebel, we provide insights into your organization by challenging the status quo and asking tough questions. Together, we deliver the answers you need to charter a fast and certain path forward.

Let's work together to help your brand find truths in places you wouldn't expect, to take you to places you never thought possible. Let's talk.