They can require people to make a trade off between the present day and the future and we don't make them very often so we don't get a chance to practise making them.
That has a tendency to mean we fall back on habits like prioritising the here and now by paying off as little debt as we can and procrastinating on even the smaller tasks like switching to a better savings account.
Emotion can also be a driving force - we pay for insurance to avoid future regret despite how expensive it is or we choose not to sort out a debt because that would involve making a stressful decision.
People may use decision-making rules like splitting out money into separate accounts and then deciding they can't touch the holiday fund even if they run out of everyday money.
People are also hard-wired to fear loss of their money and prefer known risks - we would rather switch out of a higher risk KiwiSaver account when share markets perform badly than stick it out even though it would crystalise the losses.
The research also found people tend to be overconfident about their own abilities and extrapolate small amounts of information.
People may use decision-making rules like splitting out money into separate accounts and then deciding they can't touch the holiday fund even if they run out of everyday money.
We would rather choose a brand we know or stick to the status quo and we'll often make a decision because we like the salesperson or can relate to them.
But the good news is that there are ways to get around our in-built biases.
Marcos Pelenur, a principle policy adviser at the Ministry for Business, Innovation and Employment who contributed to the paper, said the first step was recognising them.
"If we are aware of those biases we can try and think about those choices in a different way."
For someone struggling to save for their retirement now that could involve thinking of it in today's context by working out how much monthly income their savings would give them today, Pelenur said.
An overseas trial also found people saved more money if they committed to increasing their savings in the future and increasing them every year than if they started saving now and had a reminder to save later on.
Pelenur said timing could also be critical.
In another overseas trial people who received a text message reminder to pay their loan were more likely to pay on time than people who were offered a financial incentive to do so.
Catching people at the right time can be very powerful.
Local evidence has also contributed to the paper like one KiwiSaver provider which found its emails were more likely to be opened than other providers because it includes the members name and account balance.
As well as making consumers better informed the FMA wants financial service providers to use the information to help their customers make better decisions.
Paul Gregory, FMA director of investor capability, said it was in everyone's interests for the insights to be used positively in product design and marketing, disclosure, sales processes.
"We can't have fair, efficient and transparent New Zealand financial markets if decisions are being made on the basis of bias or other emotions."
See the latest FMA research here:
