In money, and in life, you are very often your own worst enemy. You promise yourself you're going to diet, then eat not one or two french fries but a whole plate. You decide to really commit to saving for retirement, only to wind up with a new pair of shoes in your closet.

Why does self-sabotage happen no matter how hard you try to prevent it?

At least part of the blame lies with your brain. It spends a lot of time working for you—it's involved in everything from breathing to buying shoes—but it can also work against you.

"Your brain will give you a lot of emotional signals, and some of them are not very useful. In fact, they can be quite misleading," says George Loewenstein, a professor of economics and psychology at Carnegie Mellon University.

Knowing how to interpret the signals and trying to ignore ones that may lead to trouble is key to getting your finances in order.


Next Story