I Thought My Mortgage Jump Meant I Was Broke. I Was Wrong.
Mike’s mortgage payment jumped from €800 to €1,400 a month. For a week he felt broke even though his salary, home, investments and wider financial position had not suddenly changed. The episode explores narrative economics, availability bias and how financial stories can move faster than facts.
What you'll learn
- Why a real financial number can create an exaggerated financial story
- How narrative economics can shape financial behavior
- How the availability heuristic makes vivid information feel personally relevant
- Why acting on financial urgency can create unnecessary costs
- How Mike uses a 48-hour pause before reacting to frightening financial information
I Thought My Mortgage Jump Meant I Was Broke. I Was Wrong.
The payment changed. Everything felt different.
Mike’s mortgage payment rose from €800 to €1,400. The change was real, yet his salary was still arriving, his house was still the same, his investments were still there and other expenses had not suddenly risen. The feeling of being broke arrived before the complete calculation did.
The story arrived before the facts
Mike connects the experience to Robert Shiller’s work on narrative economics: financial stories can spread from person to person and influence behavior before the underlying facts have changed for each individual. A dramatic number is easy to picture; a quiet personal balance sheet is not.
Availability makes vivid numbers feel close
The episode also connects the experience to the availability heuristic: information that is vivid, recent or easy to imagine can feel more probable and more personally relevant. A headline can become emotionally personal long before someone checks whether it changes their own financial position.
The cost of acting on urgency
Mike uses mortgage and investment examples to illustrate how decisions made under pressure can create long-term costs. He explicitly presents these as illustrative rather than predictions about a particular person’s finances.
The 48-hour rule
Mike’s response was deliberately simple: stop for 48 hours before changing anything because of a frightening financial number, then look at the numbers that actually belong to him rather than the numbers in the headline.
Information is not instruction
The central distinction is that a headline can tell you something happened, but it cannot automatically tell you what that event means for your own financial life. As Mike puts it, the oil field does not raise your mortgage by itself; a chain of decisions connects the two.
The Number That Changed Nothing
The deeper personal essay connected to this episode, exploring the idea behind the numbers and the financial psychology underneath the story.
Read the essay →Why can a mortgage payment increase make you feel broke?
A higher payment can be a meaningful change while still leaving other parts of your financial position unchanged. The episode explores how a vivid new number can become a larger story in the mind before the full financial picture is checked.
What is the availability heuristic in finance?
The availability heuristic describes how vivid, recent or easily recalled information can feel more relevant or likely. In the episode, financial headlines and a new mortgage number become unusually salient and influence how Mike feels about his finances.
What is narrative economics?
Narrative economics studies how stories about the economy can spread and influence beliefs and behavior. Mike uses the idea to explain why a financial story can affect decisions before a person has established what it means for their own numbers.
What is the 48-hour rule?
Mike’s personal framework is to pause for 48 hours before changing a financial decision because of a frightening headline or number, then check the facts that actually apply to his own situation.
Educational and entertainment content only. This page is not financial advice. Mike Petry is not a licensed financial advisor. Do your own research or speak with a qualified professional before making financial decisions.