Are you your own enemy when it comes to your finances? You are not alone. This is especially true when you have strong feelings about something, be it the markets or the need to buy something. Most people are not comfortable with talking about money or handling their investments.

Your emotions may be hijacking your good sense, according to expert Doug Lennick CFP in his book on "Financial intelligence, How to Make Smart, Value-Based Decisions with your Money & Your Life".

The emotionally charged responses to the stock markets over the past few years were justified. Anyone in the financial industry was feeling uncertain and felt the associated fear. When overcome by emotions, you need to e-think-motion versus just getting into motion, according to Lennick.

The problem is we are "hard-wired" for fight or flight reactions. Without getting too technical, it means that our primal survival instincts kick in. Stop and think before you act.

Our emotional brain will sacrifice speed over accuracy. When you feel an urge to make a financial decision and you are emotionally charged, you need to stop and practice the 4-Rs:

• Recognise the feelings.

• Reflect on your goals.

• Reframe your thinking

• Respond responsibly.

Make it habitual. This is part of the psychology of theory of behavioural finance. It is the study of how the mind works in making decisions, specifically as it applies to money.

The thinking here is that if you practice the 4-Rs you will re-wire your brain to think before you act. As Lennick likes to say, "practice makes permanent… not perfect".

Another peculiar aspect of behaviour science is that we look for patterns and expect a repeat of what happened most recently. That is why in the 2006-2007, most investors could only see more green.

Now the issue is how will we redevelop trust in the markets?

It is hard to believe things will ever be stable and positively directed. It is unlikely we will see a repeat of the declines witnessed in 2008-2009. However, it is also unlikely we will return to the investing optimism of the earlier period.

According to Lennick, 68 percent of the individuals asked lack trust the stock markets. That is why funds have been flooding into bonds at record rates.

Some experts are now saying there may be a bubble in the bond market, where prices are over-inflated due to herd mentality. And when there is a bubble, it tends to burst and prices collapse.

An over-emphasis on bonds in your portfolio might not be rational, especially when yields are now at record lows in investment grade bonds. Those yields on government notes are barely keeping pace with inflation, whilst dividends on blue chip stocks are at record high.

They are even higher than bonds. That's a turnaround that we haven't seen since the 1930s. Once thing is fairly certain, we are facing greater financial uncertainty. Lennick cautions to "prepare for the certainty of uncertainty". We are also living longer and will need more investments to draw upon to survive for the long haul.

This is why it is critical to make smart and well thought-out decisions with your money. Diversification is one rational approach, where you don't put all your eggs in one basket. There should be a selection of bonds, stocks, and money market investments.

How much of what? That is the question. It is been shown that an individual's "risk tolerance" is really not the best way to determine someone's investment approach. It is '"loss tolerance" that is really the issue.

Another financial practice to emphasise is risk control. An investment strategy can be built where there is some protection against the downside.

How much will depend upon how much upside potential you will want to spend for protection. This can be accomplished with protective puts or guarantee structures surrounding a portfolio.

Proper planning is important for meeting our financial needs. It is almost impossible for you to grasp the impact of retirement in your life. People are not hard-wired to plan ahead.

It takes effort. In addition, it is not easy to internalise the magnitude of the change that retirement will bring. And it will change your day-to-day existence in many ways.

It may need a real shock to prompt a change to a responsible mindset to your finances. It is difficult to change and sometimes it requires a shock at our primal survival level. You need to do the math on what happens if you do not have enough to support yourself. This is serious business.

Financial intelligence will help you make smart, responsible, goal-based decisions. Use all the knowledge and tools at your disposal to guide your behaviour. It is not only the volatility of the uncertain markets that you have to contend with, it is also what is between your ears. Make good financial decisions a habit.