Human psychology and money do not mix well. Unchecked, our psyche can easy to sabotage financial decision-making, behavioral experts said during a panel discussion at CNBC’s Financial Advisor Summit.

“We’re all fools when it comes to money,” he said Brad Klontzprincipal of YMW Advisors in Boulder, Colorado and founder of the Financial Psychology Institute.

“It’s a miracle that someone gets it right,” he added.

The human brain is hard-wired to make decisions that lose money in the long run, such as buying high and selling low, buying for “fear of missing out” or engaging in a herd mentality, Klontz said. certified financial planner and member of the CNBC Financial Advisor Council.

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These flaws actually make sense. Many date back to evolutionary processes that took place species-wide thousands of years ago or more recently, at the individual level in early childhood, experts said. Parents, culture and socioeconomic status are powerful forces that shape beliefs about money from a young age, they said.

In addition, feelings of shame, such as the idea of ​​having too much or too little money, are pervasive, the experts added.

This tendency has its roots in comparing oneself to others in the “tribe,” which contributes to the feeling of needing to “keep up with the Joneses,” Klontz said. That’s why households may place extraordinary importance on accumulating any amount of wealth — perhaps $1 million or $5 million — when those numbers don’t mean much for overall happiness, he said.

Millennials, the generation that feels the most affluent, the survey found

“The number itself has to be very personal,” Preston Cherry, founder and president of Concurrent Financial Planning in Green Bay, Wis., said of a financial goal.

“It’s different for everyone. It’s kind of like a thumbprint, so it’s very unique,” added Cherry, a CFP and member of the CNBC Financial Advisor Council.

Well-being is the main measure of “wealth”

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Financial well-being is more than just investments, experts say. It’s about a person’s goals and how money can help achieve these wishessaid the experts.

In fact, a new survey by Charles Schwab suggests that most American adults today think that overall well-being, not money, is the main measure of wealth.

Cherry recommended “focusing on FOMO instead of FOMO,” which means “focusing on moving forward” with your vision and plan rather than “fear of missing out.”

“Keep the blinders on and look straight ahead,” he said. “Don’t compare yourself to others.”

Social media, which is full of misinformation and bad financial advice, has made this a challenge, experts say.

Moreover, money is becoming increasingly abstract in the digital world of cashless payments. That can make it harder for kids to develop good money habits because our brains are better at understanding concrete examples, Klontz said.

When buying an expensive item like a vacation, parents can be a good role model for their children by setting up a savings plan and demonstrating how it works. For example, they can set aside a certain amount of their paycheck for six months to reach a goal, teaching important financial concepts like delayed gratification and saving for the future, Klontz said.

More generally, money is still a “somewhat taboo” topic when it comes to talking with others — whether it’s a partner, children, friends or parents — even when thinking about our own lives, Cherry said.

“The more often we can have healthy conversations [about it] … I think we can have better results with the money and what we do with the money,” Cherry said.

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