The Escalation Cycle and Financial Decision-Making

Today we have a guest post by Principal F.I. who explains the concept of “the escalation cycle” and how understanding it can help you better manage your finances.

Far too many think teaching is just standing at the front of a classroom and throwing out information.

In fact, the best teachers approach it as both an art and a science, deftly weaving the most current learning research, relationship building, detailed planning, and in-the-moment adjustments.

Since there is nothing that works for every student, we need to build comprehensive knowledge of approaches, responses, and needs.

I enjoy applying my education experience to other subjects. Adult responses and needs don’t differ dramatically from those of early learners. They just look different as we grow older and become more, or less, able to manage our responses.

One excellent example of this is the escalation cycle. Understanding your own escalation cycle, and how to respond, can help you better control your life and finances.

We’ll go through a quick overview of the escalation cycle. I’ll provide examples of how it applies to adults and money. Then, I’ll share how you can use your newfound knowledge to limit potential financial damage from your own escalation cycle.

What is the student escalation cycle?

Acting-out behavior in young students is a form of communication – many don’t yet have the skills to respond in the “appropriate” way. Sadly, a greater number of students are coming to school with significant behavior support needs.

I work for a district that specializes in serving students with explosive behaviors. All of our staff are trained in the escalation cycle. It is also sometimes referred to as the “de-escalation cycle” or “phases of acting-out behavior.”

Knowing this cycle helps educators better understand, support, and respond to students with explosive behavior. It allows the adults to limit behavior episodes and supports students in acquiring the skills they need to build alternate behaviors.

I could go on and on about this – but instead will provide a quick review of the phases.

The Phases of the Escalation Cycle

The escalation cycle in teaching

Image Source: PBS LearningMedia


Exactly as it sounds. A student is interacting with others or participating in appropriate ways.


Something happens that causes stress. For some students, this may be as simple as frustration with a task at which they are unskilled. (Writing is actually a very common trigger.) It could also be social interactions with peers, an unsafe feeling, or environmental change. The trigger varies by student.

Knowing a trigger can help the student or teacher avoid the escalation cycle by avoiding the trigger.


Outward signs of escalation begin to appear. Again, this will be different for each student. In one, this may be increased social interaction. Another student may withdraw completely. Pacing, crying, stillness are other examples.

At this point, the escalation cycle has started, but can still be interrupted. Alternate activities, environmental changes, interactions with a safe adult or peer are examples of potential interruptions.


At this point, the acting-out behavior intensifies. For children, this may be yelling, crying, or physically lashing out at peers or adults. It may also be complete withdrawal and refusing to engage.

It is difficult to interrupt the escalation cycle once in the acceleration phase.


At this point in the escalation cycle, the individual is out of control. This may be physically out of control, but can also be uncontrolled crying, complete physical stillness, or verbal lashing out. I have heard some pretty impressive profanity from students in the peak of their escalation cycle.

Students in the peak often display behavior that is dangerous to themselves or others.

At this point, rational intervention is not possible. It is important to stay calm and consistent, but do not assume reasonable questions or requests will be heard or complied with. Untrained adults will often continue power struggles at this stage, prolonging the peak.


Time in the peak will vary by individual. Eventually, the exhibited behaviors will begin to decrease.

At this point, a student may often become disoriented or appear confused. They may not be aware of what they just did and surprised by the reactions of those around them. Typically engaged students may withdraw from social interaction.

Sometimes, adults mistakenly believe these responses are an act. This is not the time to begin teaching or responding to the behaviors. This can be a new trigger.

Instead, reinforce positive behaviors in this moment.


After a period of calm, the student enters the recovery period. While this varies by students, the generally recommended time is 20 minutes of calm behavior.

In the recovery period, the student can reflect on previous behaviors. Now is the time to debrief. Students can be taught alternate responses, or adults can build systems to intervene differently.

The recovery is an important time for both student and educator to analyze actions that led to the escalation.

Other Notes

Individuals progress through all phases in the cycle. The progression may happen so quickly that it appears the phases were skipped, particularly from agitation to peak.

As students and educators become more aware of a student cycle, you can begin to slow these down or recognize the differences.

This is a very simple overview of the escalation cycle. It should not be considered authoritative or comprehensive training.

How Might The Escalation Cycle Apply to Adults and Money?

My intent is not to compare adults to acting-out children. Yet, I believe understanding this cycle can help anyone avoid some potential money mistakes.

Adults typically have better response strategies than young students, but can also experience escalation and impaired decision-making.

Do you think that’s a stretch? Let’s take a look at a few adult examples.

Gambling “On Tilt”

If you’ve played or watched poker you are familiar with the phrase on-tilt. A simple description of being on tilt means a player is letting their emotional state lead to suboptimal decision-making. Let’s check it out against the escalation cycle:

Poker Man is playing well. (calm) His opponent makes a bad call and he should win the hand, but the opponent gets a lucky draw and takes a large pot. (Trigger)

Poker Man was previously talkative but now gets quiet. (Agitation) Another experienced player notices this and begins giving him a hard time. Yes, you can intentionally feed the escalation cycle.

Poker Man starts pacing around the table, returning only to angrily throw away his hands. (Acceleration)

Poker Man sits back down and starts betting heavily with a weak hand believing he is bluffing. (Peak) He pushes all his chips in on an all-in bluff.

Opponent wins all his chips. Poker Man angrily begins yelling about the previous loss and what a horrible call it was. (Peak continues)

After a few minutes of pacing, he quietly sits back down and stares at the table. He does not engage with other players. Others may even encourage him now that he has no more chips to lose, with things like “Good play, tough loss.” (De-escalation)

After a time, Poker Man stands up and leaves the table. He returns to his room to analyze his play and decides that next time he experiences a bad beat he will automatically fold his next three to five hands. (Recovery)

The gambling “on tilt” is perhaps the clearest example of an adult escalation cycle. It can happen at any gambling game.

On my recent trip to Vegas, I watched a blackjack player up his bet dramatically after a string of losses. He became more angry, swearing at the dealer. But, he kept playing. He was busted out in less than ten minutes.

Relationships – Money Fights

Not a gambler? Well, many of us are familiar with a money fight in a relationship. Here’s a possible scenario:

Things are calm and you and your partner are discussing your budget.

One inadvertently says something that upsets the other.

The other withdraws or begins to ask pointed questions.

It escalates into accusations, then becomes a screaming fight. One partner storms out of the room, while the other sits and fumes.

After a time, both feel awkward. Depending on the relationship it may sit for awhile, or you may talk it through immediately.

You both agree to a different process for future discussions.

Do you see the escalation cycle there?


A key characteristic of the escalation cycle is that it impairs your decision-making. I believe that, purposely or not, many sales situations are set-up to push you into the early phases of the escalation cycle.

Think about a car dealership or a timeshare sales situation.

You enter the situation by choice, and are in a calm state. You maintain this for a while. They promise you luxury and great deals.

If no sale is made early, they may begin to challenge your sense of worth. Over time, you’re deprived of a sense of freedom because you feel you can’t easily leave. You may grow hungry. (Both of those are triggers)

You become agitated. Your decision-making is impaired at this point, whether you realize it or not. You may make a purchase to resolve the situation or to prove your worth.

The worst salesman may push you into the acceleration and even peak phase. What do they have to lose? Worst case – you swear and storm out. You may, instead, make a horrible purchase.

Afterward, you’re driving home in a new car, or wondering why you now own a place in the mountains. You begin to think about how you’ll never let this happen again.

Sound familiar?

Individual Purchasing

It doesn’t always require a salesman actively pushing your buttons.

Many of us have had experiences of purchasing regret.

Something triggers you. It could be an emotional event – a particularly upsetting conversation with your parents. Maybe you’re lonely. Or simply bored.

You go to a mall, or outdoor store and buy something. It feels good. You want to add to your new purchase. Suddenly, you have a carload of items and are heading home. Or maybe you just made one really expensive purchase.

You get home, unload your new stuff. The good feeling starts to fade. Those things that seemed so necessary before now seem….not.

You sit on your couch, confused. Why did a normally frugal person just go on a spending spree?

Can you see the trigger, escalation, peak, and de-escalation?

What Can You Do About It?

Maybe the examples aren’t exactly the same as an acting-out behavior. But the pattern is similar. I believe you can use the same principles we use in our schools to help manage your own escalation cycle and positively impact your financial choices!

Know Your Triggers

First, what are those things that trigger you into making unwise financial choices? Identifying them is probably the first and most important step.

When you know your triggers, you can avoid them or build systems to help you avoid the escalation cycle when triggered.

As a personal example – one of my triggers is when I feel I’m being treated as less knowledgeable because of a perceived class difference. This comes from being denied opportunities when I was young because I was poor.

If I think I’m being treated dismissively because someone perceives me as less than their social equal, it can trigger a desire to spend.

I have a friend who knows that he will almost always have a desire to buy expensive whiskey after talking with his father-in-law. It’s both a desire to drink but also a desire to prove his worth through an expensive label.

Another friend told me that her husband’s trigger was simply being told that he couldn’t afford something. If a salesman said that, he would almost always buy. If she mentioned it in a financial discussion, they’d end up in a fight.

These are just a few examples. Can you identify your financial escalation triggers?

Pay Attention to the Cycle

Just knowing there is a cycle can be helpful. You may not notice you’ve been triggered, but suddenly realize that you’re agitated.

This is a good time to figure out what is happening, or has recently happened, in your environment to make you feel agitated.

Acknowledge and Interrupt if Possible

If you can recognize that you are in the escalation cycle it is important to acknowledge and try to interrupt. This is part of the skillset we work to teach students related to their acting out behavior.

Adults are typically, but not always, more able to do this on their own once they’ve identified their triggers and escalation.

Sometimes, simply recognizing it is enough. I recently wrote about how our efforts to reverse lifestyle inflation led my partner and I into old money fights.

Fortunately, we were both able to recognize it in our agitation phase, acknowledge that we had been triggered, and then laugh it off. (Sometimes it’s great to be married to someone who has the same training!)

Other times, you may need to create a more direct intervention. The best interruption will differ depending on individual need and situation.

Perhaps you suddenly find yourself at the mall and recognize that you are emotionally upset. Simply leaving the location won’t be enough – you’re still upset. You choose an alternate behavior – perhaps going to the gym, calling a friend to have a drink, or sitting.

It takes time to identify what interruptions will work. If one doesn’t work, plan a different one to try the next time.

Recovery – Make a Plan

Next to potential disruption early in the cycle, recovery is the most important time. If you’ve escalated and made a financial mistake – acknowledge it, correct what you can (perhaps you can return an item?) but don’t beat yourself up.

Instead, use this time to reflect on what just happened.

1. Try to identify the trigger.

2. What did agitation look like for you?

3. What was your destructive behavior when at your peak?

4. What led to de-escalation?

Then, use this reflection to build a system to respond better next time.

Can you avoid that trigger?

If not, how can you recognize your agitation earlier?

Is there an alternate activity you can direct yourself to when you find yourself agitated?

Recognize that it’s rare to get a plan exactly right the first time. You may experience a similar financial escalation.

Review your plan and see what worked and didn’t work. Perhaps you found a new trigger? Maybe your alternate behavior wasn’t enough to prevent full escalation. Adjust your plan.

An Example

I recently talked this through with a colleague. He had just purchased a new car. He’d done so by rolling his old car loan into his new car loan. Yikes!

We happened to talk about this the very next day. His de-escalation and regret had hit him on the drive in to work. He was almost disoriented and couldn’t believe he now had 6 more years of higher payments. Yikes again!

Internally, I was stunned by the financial choices. Externally, I helped him debrief the situation. Without going into all the details, we identified the following:

1. His trigger was an interaction with his ex-wife and her new husband. He’d felt like a failure.

2. His agitation phase was loud awkward joking and boasting.

3. He accelerated into telling his kids (shared custody) he’d have a surprise next time he picked them up.

4. He had little to no memory of the car dealership, but had signed a contract.

It was too late to fix the car purchase. (Ouch.) Due to the shared custody, it was likely he’d have interactions with his ex-wife and husband, so he couldn’t completely eliminate the trigger.

He decided to seek counseling. In the meantime, he would attempt to self-interrupt if the feelings of comparison or failure caused agitation.

He also decided that when exchanging the kids, he would make plans with a friend immediately afterwards so he’d have somewhere else to be.

Note that I didn’t berate him or push on the financial choices in the moment. It would have been counterproductive. I offered to discuss personal finance with him in the future.

Now, this is an extreme, and imperfect, example. It obviously won’t apply to everyone – nothing will. Your escalation cycle and consequences likely won’t be as clear or dramatic.

But, if it helps him, or you, avoid a financial escalation cycle in the future then I’m glad to have shared it.


Takes these steps to manage your own escalation cycle:

1. Know your triggers

2. Recognize and acknowledge agitation

3. Interrupt with an alternate choice or activity if possible

4. Use recovery to create, or adjust, a plan for next time

Hopefully, this knowledge helps you take greater control of your financial life.

For another example of education geekery applied to finances, read about the Zone of Proximal Development.

Find more articles by PFI over at Principal F.I.

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