When you hear the word money, what comes to mind?
It might be a paycheck, a bill, a chore, a necessity for living your life. This is the side of money that we are most familiar with. The side that we spend, save, and curate to make our day-to-day lives run as normal.
But there is another side to money that isn’t talked about nearly enough. The side that causes tears, stress, joy, fear, and love. The one that we spend days, nights, and weekends consumed by—the emotional side. Emotions are what make money so powerful—the way they impact our thoughts, feelings, and relationships with ourselves and those around us.
Money can influence our emotions and the more we understand and embrace the emotional force of money, the better we will be at harnessing them and using them to help rather than hinder us and others. In order to do that, the first place to start is ourselves.
Understand your relationship to finances
Your relationship with your finances is a harbinger for understanding your financial inclinations. Let’s start by walking through a few questions:
How do you feel about your finances? Are those feelings more positive or negative?
Where do your feelings about money come from and what internal and external factors inform them?
Have you always had this view about money and your personal finances?
Quite often our first encounter with money happens at home. Your parents' or guardian’s relationship with their finances could have colored your view of finances as you grew up. Do you remember being taught about money, or was money and all of its concepts something you learned along the way? Analyzing your past relationship with finances can help you figure out how you see money today.
The most important aspect here is understanding your why. The reason behind your relationship with money is the key to altering it and shifting it for the better. Your ‘why’ can help you think about your relationship in a deeper, provocative way. It can also point out areas where you can improve.
Money will always be emotional, but if you have a healthy relationship with your finances you will be better able to handle financial stress and make a plan to get out of it.
Alter negative emotional weight
Sometimes money can be stressful, from debt to market downturns to large purchases to being ready for retirement. There are so many moments throughout your financial journey that won’t always be easy, but it is important to maintain a healthy relationship with money throughout the tough times.
When you were answering the questions above, did you uncover any negative thoughts or emotions toward your finances? If so, be honest about that bad feeling and dig into it to find the root of the problem. Why is this area of your financial life causing so much negativity? How can you change your strategy to find a better path forward? When you approach your finances in a calm, earnest way you will be able to better devise a plan that works for you.
Don’t feel like you have to hide or conceal your emotions about your finances. If you are feeling upset about something, use that feeling to channel a positive response and work to change it. When you push something under the rug, you aren’t dealing with the emotion and trying to bury it will only lead to more problems for you and your loved ones later on. When you approach your finances with openness and honesty, you are promoting healthy conversations about your finances with your loved ones as well. Perhaps your spouse has the same concern you do, but if neither of you says it, no one will be aware.
Take, for instance, your retirement savings. You might feel uneasy about your financial readiness for retirement and if you do nothing about it, that negative feeling can manifest into fear, anxiety, and stress until it snowballs out of control. Or you can acknowledge the feeling and work to find practical solutions. Maybe it is talking with your spouse to set up a meeting with your financial advisor to check in on your strategy, or altering your risk tolerance, or contributing more to your retirement accounts. All of these concrete avenues can help you turn that negative emotion into a practical plan forward for both you and your loved ones.
Channel your emotion toward the greater good
Money, like emotions, never stands still. It is constantly moving, changing, and evolving with time. Once you understand your relationship with your finances, you can use those emotions for the greater good not only for yourself but also for others.
When you have a healthy understanding of your financial life, you will be better able to spend and save your money according to your goals and values. Let’s return to the retirement saving example from above. Say you decide to follow through and make an appointment with your financial advisor only to find that you are well on track to meet your retirement goals. This news could help free up your apprehension about not having enough and inspire you to give more to your church or other charities.
Having transparency in your financial life when it comes to your emotions can help you better plan and execute a financial strategy that is centered around your values and priorities. Money will never stop being emotional and it is important to embrace those emotions, understand where they are coming from, and use them to make an impact on your life and the lives of those around you.
We are passionate about helping you align your financial life with the people, places, and things that mean the most to you and would love to speak to you about how to optimize your financial strategy to reflect that.