It is no secret that money management and emotions have a great influence on each other. For example, our intense feelings of loving our family make us try hard to earn a decent income in order to provide for and take care of it. Money also has the ability to affect our mental health and personal relationships. Also, financial issues affect our anxiety levels. In this article, we have outlined some things to help you feel more confident and less stressed about your financial future, with the goal of understanding the emotions of money management.
Why do feelings about money matter?
No one can be found who is completely rational when it comes to money. Many of our financial behaviors are done out of carelessness or momentary emotions. Also, sometimes we spend less than what we really need due to our false beliefs and lack of self-esteem. We make decisions about money that affect our financial situation, which in turn affects our future emotions and behaviors. And this relationship continues throughout life. Therefore, knowing your feelings about money is very important in money management.
What are the most important feelings in relation to money?
Fear, greed, jealousy, anxiety, and excitement are the most important emotions observed in people’s financial behavior. The emotional dimension of our existence is always in front of our logical dimension and it can easily influence our decisions. For example, the fear of bankruptcy in investment or envy towards the lifestyle of other members of the society are examples of people’s feelings that are the primary driver of their financial behavior. Until we know enough about our feelings, we cannot heal them. Therefore, it is very important to take a certain amount of time to recognize feelings and find their roots.
Feeling anxious is one of the most common and powerful emotions related to money and personal finances. More than half (53%) of Americans feel anxious thinking about their personal finances, according to the National Financial Capability Study conducted by FINRA’s Investor Education Foundation. The following examples are examples of conversations within us that are formed due to the presence of anxiety:
- I don’t have enough money.
- I haven’t tried hard enough that my finances are like this.
- I spend a lot of money.
Greed and jealousy:
Emotions like greed and jealousy may exist in ordinary people of society as well as in professional investors. Comparing ourselves with others and feeling jealous of others can easily affect our money behavior and make us make some kind of emotional purchases that we may not need at all. Also, the feeling of greed and the desire to have more are among the emotions that can be seen among people, especially investors.
Facing financial issues usually challenges people’s minds, and the mind naturally dislikes thinking and being challenged. Therefore, people who avoid dealing with financial needs are usually labeled as procrastinators and assumed to be lazy or undisciplined. If it is the nature of our mind to avoid challenges and use different types of avoidance maneuvers. For example, budgeting is one of the things that we usually avoid doing.
It’s rare that we create a budget and stick to it regularly. Even though we know this action will benefit us, we don’t do it or postpone it. One of the first steps to managing money and the emotions around it is creating a budget.
Budgeting can help reduce the stress of managing money to a great extent. One of the benefits of having a budget is that it gives you an action plan or road map. A written budgeting plan will help you understand how much money you have coming in and paying out. In addition to setting spending limits that stem from budgeting, it greatly prevents emotional spending.
How to manage emotions with money?
There is no doubt that all the money emotions mentioned in this article exist and cannot be ignored. Emotions are not always bad. You can use these feelings to your advantage and achieve desirable goals. For example, when the feeling of greed or jealousy arises, we can find their roots and instead of envy, we try to find a way to achieve what we are jealous of. Or the feeling of anxiety can be a signal for our self-awareness.
A self-awareness signal tells us that we should take appropriate action to improve the financial situation. Most of the world of our emotions and feelings are unconscious. But if we are aware of our purpose and know what we are looking for, it will not be so difficult to control our emotions.
what is your opinion? What do you think about the relationship between emotions and money management?