Never Make a Major Financial Decision When You Are Angry Sad or Euphoric

Strong emotions hijack your judgment. When you are angry, you want to punish or prove a point — so you quit your job impulsively or make a spite purchase. When you are sad, you seek comfort — so you overspend or agree to bad terms. When you are euphoric, you overestimate your abilities — so you invest recklessly or commit to expenses you cannot sustain. The decision that feels urgent in the heat of emotion rarely looks wise in the calm of the next morning.

Create a personal rule: no financial decision over a certain threshold — say one hundred dollars or one percent of your income — gets made on the same day as a strong emotional event. Sleep on it. If the decision still makes sense when you are calm, go ahead. This one rule will save you from some of the most expensive mistakes of your life.