The question of whether we are right-brained or left-brained arises from the inherent need to understand ourselves better. It creates an easy shortcut for addressing choices we face in life—from which job to take to which stock to invest in, or even which home to buy. It's also why magazine quizzes and online tests to help us understand and categorize ourselves as right or left-brained are so appealing.
So, What Is the Difference?
In the literal sense, the physical location of our brain functions line up as being in either the left hemisphere or the right. The left hemisphere of the brain literally houses functions associated with more computational and detail-oriented skills. The right side is home to bigger picture activities.
Planners vs. Dreamers
While pop culture tests may accurately highlight our talents and track with our personalities—and even help us empathize with those who think differently than we do— whether we are scientists, artists, or mathematicians, we all use our full brains1.
This isn't to say that as humans we aren't of two minds, especially when making financial decisions. That part is accurate and does influence how we evaluate choices, but it isn't necessarily a literal division.
Fast Versus Slow
Psychologists have found there is a different type of duality at work in how we process information2. There are two processing systems, the first one is instinctive. This one is somewhat binary, as in fight or flight. Its original use was intended for life or death situations. Today, it can also pop up when we see a bargain on a shelf and notice it's the last one, leading to impulse purchases without giving them a second thought. It also leads us to prefer simplifying complicated concepts into matters of "either/or."
Reasoning, the other system, takes longer. This second system evolved as decision-making became more nuanced. For instance, every time you say, "I want it!" and then take a beat to ask yourself, "But, do I need it and… can I afford it?" you're experiencing your instinctive brain interacting with your reasoning brain.
To keep the processing speed under control so we'd listen to reason, the human brain evolved shortcuts. These are referred to as behavioral biases or emotional drivers. The strength and mix of these drivers often finds expression in our personalities— in how instinctive or analytical we are. In other words, some of us let our biases do more of our deciding, than others.
Often, the driver behind an internal tug of war over what to do about a financial decision arises from an instinctive desire to avoid the pain of loss and the regret that follows. Experts in behavioral finance find that the fear of loss and of having regrets for taking a failed action are much stronger than the joy associated with a successful decision. So, when deciding, it sometimes isn't so much an interior dialogue about what's right as it is one about which option could potentially cause more pain— be it a loss of opportunity or an actual loss of money.
The more money at risk with a decision, the more challenging the decision may be. This is why retirement, investing, home buying and financing choices can seem more challenging for some people than others. Their fear of loss is heightened. Sometimes, it's so intense, it can cause people to remain on the fence—unable to invest their money in anything but cash.
What All This Means for You
Regardless of whether you find yourself on the right-brained or left-brained side of a personality test, navigating working relationships and life's daily financial decisions can benefit from developing more of an "all-brain" approach to your own thought process.
For those who appear to be more right-brained, this can mean balancing trust with verification before deciding—it also means spending time adding details to the big picture before acting. While instinct can lead you to opportunity, embracing left-brained activities can help reduce the likelihood that you'll act on impulse.
For instance, when you go car shopping, the salesperson typically insists you go for a test drive. The reason is that especially among impulsive people, it triggers the "Endowment Effect," an instinctive behavioral bias. Once you sit in the car, touch the wheel, and drive it around, you feel the impulse to start acting like it's yours. That greatly increases the likelihood of your buying that car, even if it's more than you wanted to spend. It's also why buying a car with fewer features than the one you test drove can feel so disappointing.
Whether it's a car, a pair of shoes, or an investment, remember that the sales pitch is designed to appeal to your emotions and trigger a quick "yes." To counteract the impulse to oblige, try to channel left-brained functions to think through the details to determine if the deal is a good one.
Left-brainers, on the other hand, need to play to their strengths but make room for what they see as weakness— their emotions. For instance, people who are characterized as being left-brained typically are good planners. To be a good planner you need to be able to analyze and research before deciding…anything. These are the folks, who probably know exactly how much money they need to save for retirement. They are also likely to be dumfounded by questions about what they want that retirement to look like…what exactly they are saving for.
In contrast, right-brained people are likely to describe their retirement in great detail. They have no idea what it will cost, or how they will achieve it, but because they can see it, they are optimistic they will achieve it. Being able to see the bigger picture and then plan for it, is much more likely to result in success.
Whether you've found that your gut instinct is usually right or that deep research and analysis allow you to live more peacefully with decisions involving your money, it helps not to make major decisions in a vacuum where your own collection of biases can influence you.
Whether that means phoning a friend, bringing one along when you go shopping, or working with a professional who can be your sounding board and guide you when it comes to investing, financing or home buying, you don't have to go it alone. It's your decision, but having backup helps keep you on an even keel when making decisions!