Beware of Emotional Financial Planning
If you’re like most people you have made a New Year’s resolution to take control of your finances. You have researched the vast amount of financial information available and have learned many tips to get you on your way. However, the problem may not be in what you don’t know, but rather in how you feel regarding money and finances. Obtaining knowledge can only take you so far; you must understand the underlying emotional issues for why you continue to make the same financial decisions.
Many of our first interactions with money happened when we were children. These interactions have shaped our belief system and should be examined to make positive changes. If your first experiences with money were surrounded by stress and anger, you probably have some of those same feelings as an adult.
Another emotional roadblock is the use of money as an emotional band-aid. Money, like food, is often used to provide an instant relief to emotional stress or pain. These rash emotional decisions, intended to mask uncomfortable emotions, can have a serious negative impact on your bank account. Recognizing emotional spending triggers can go a long way to making your financial planning healthy.
Whether you are jealous of others who have money or don’t feel that you are being paid what you’re worth, resentment and money often go hand in hand. When resentment is present in any relationship (including money) it can cause the individuals feeling the resentment to stop being an active, positive participant. Remember that you are always in control of your money situation.
Finally, many people use money as an expression of love. The idea that the more money you spend on someone, the more they will know you love them is often one of the biggest obstacles to financial control. Gift giving is fine, but it is irresponsible to think it is an essential part of a relationship if you are not financially able to do so.
Understanding how your emotions are tied to your finances can go a long way in helping you to overcome problems in your financial planning.
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