Financial Word of the Day: Framing
- Larry Jones
- Dec 2
- 2 min read
Ever notice how the same financial decision can feel completely different depending on how it’s presented? That’s not your gut being “mystical.” That’s something called Framing, a psychological money trap that can quietly influence the way you spend, invest, and save—without you realizing it.
Definition of Framing
Framing is the way information is presented in order to influence how we perceive value and make financial decisions. The facts don’t change—only how those facts are described. But our brain reacts differently depending on the “frame.”
Why Framing Matters
Framing is everywhere. Businesses, marketers, banks, investment firms, and even your grocery store know how to “frame” prices, deals, and risk to make you feel confident about a decision you might not normally make. If you don’t recognize the frame, you may make a financial choice that looks good on paper but isn’t actually good for your wallet.
Here’s the sneaky truth: Framing doesn’t change the math. It changes your emotions about the math.
And once emotions take the wheel, your money rarely ends up where you wanted it.
A Simple Example of Framing
Two identical investment funds are shown to you:
Fund A: “Earns an average of 8% per year.”
Fund B: “Has a 1-in-5 chance of losing money during a down market.”
They could be the same exact product. Fund A is framed as positive opportunity. Fund B is framed as risk. Many people pick Fund A—without ever researching the actual truth behind it.
Same fund. Same numbers. Different frame… different choice.
Everyday Framing Traps
You’ve likely fallen for these:
The Frame | What It Really Means |
“Only $99/month!” | $1,188/year plus fees |
“Save 40%!” | They raised the original price |
“No money down!” | Higher lifetime cost |
“0% financing!” | The price is hidden in the product |
The deal isn’t wrong or evil—it’s just presented in a way that directs your emotions.
How to Outsmart Framing
You don’t need a finance degree to beat this. Just ask one question: “What is the math behind this?”
Not the pitch. Not the presentation. Not the salesman’s smile.
Convert monthly to annual costs.
Ask what happens if things don’t go as planned.
Compare the “sale price” to the original price before the promotion.
Check long-term totals, not weekly payments.
When you remove the frame, the real picture becomes obvious.
A Conversation Example
Your friend: “This gym is only $10 a week!”
You: “Cool. So it’s $520 a year. Is that worth it to you?”
You didn’t argue. You just changed the frame.
Final Thought
Great financial decisions start when you stop reacting to how money is described… and start looking at what the numbers actually say.
Clear math beats clever framing—every single time.
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