Ever look back at some of the terrible decisions you've made and wondered, what was I thinking? Well there's actually a chance you weren't thinking. Instead, you may have acting on emotion, not logic.

Whether you dated an attractive person who treated you horribly, or you wasted a lot of money on a really bad investment, your feelings can lead you astray if you're not careful. The more intense your emotions, the more your judgment may grow clouded.

The best decisions are made when there's a careful balance between emotions and logic. When your emotions are running high, your logic will be low, which can lead to irrational decisions.

Here are four ways your emotions can cloud your judgment:

1. Excitement can cause you to overestimate your chances of success.

There's a reason why casinos use bright lights and loud noises - they want you to get excited. The more excited you feel, the more likely you'll be to spend large amounts of money.

When you feel really excited about something, you are more likely to underestimate a risk. Whether you're taking out a large loan for a thrilling opportunity, or you're betting all your money on an impressive horse, you'll be more likely to underestimate your risk when you're feeling excited.

2. Anxiety in one area of your life spills over into other areas.

If you're anxious about something going on in your personal life - perhaps you're worried about a health scare or you're nervous about buying a new home - it can cause you to feel anxious over your business decisions. Even though the situations are completely unrelated, research shows you'll likely have trouble separating the two.

Anxiety over one specific issue can linger. When you're feeling nervous, you may refuse to create change or you may struggle to make decisions. As a result, your thinking is likely to be clouded.

3. Feelings of sadness can cause you to settle.

Research shows you're likely to set your goals really low when you're feeling sad. In one study, participants were asked to sell various objects. Participants who felt sad set their prices lower than the other participants. Researchers suspect sadness led them to set the bar low, in hopes that achieving their goal would improve their mood.

Creating low expectations for yourself can prevent you from reaching your greatest potential. You may decide not to apply for that promotion or you may not negotiate for what you want all because you're feeling down.

4. Anger and embarrassment can lead to taking a long shot.

Intense emotions can lead to rash decisions, if you're not careful. Anger and embarrassment may make you particularly vulnerable to high-risk, low pay-off choices. Researchers suspect intense uncomfortable emotions impair self-regulation skills.

Of course, when you're feeling really emotional, your risks can become self-destructive. When those big risks don't pay off, your anger and embarrassment are likely to intensify.

Balance Emotion and Logic

Emotions certainly play an important role in the decision making process. Anxiety can keep you from making a poor choice and boredom can ignite a spark that leads you to follow your passion.

To make balanced choices, acknowledge your emotions. Pay attention to the way your feelings and recognize how those emotions may distort your thinking and influence your behavior.

Raise your logic and decrease your emotional reactivity by listing the pros and cons of a tough decision. Seeing the facts on paper can help you think more rationally about your options and prevent your emotions from getting the best of you.

Published on: Dec 10, 2015
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.