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Let's face it: money is stressful. It's not always easy to remain calm. In today's contributed post, we discuss how to keep your emotions and your finances in check. Let us know your thoughts.
In some ways, it’s rather odd to think that it can be difficult to control our emotions. After all, they’re ours, and surely we should be able to decide how we think and feel?
Of course, that’s not how it works and, worse yet, sometimes our emotions can be so overwhelming they become problematic. There is a strong connection between your financial health and your emotional health, even if you’re unaware of just how strong this bond can be.
Let’s look deeper at how your finances can be impacted by your emotions, as well as a few strategies that can help you manage any potential issues once and for all.
The two main emotional causes of impulsive purchases are anger and sadness. These negative emotions create a deep desire to fix something, and sometimes, the distraction of shopping seems like the perfect fix.
The downside is that, well… this just doesn’t work. Ever. All that happens is you damage your finances, and you’re left with a bunch of purchases that you wouldn’t usually have bought. This scenario actually compounds the anger or sadness you were feeling, rather than providing any kind of solution.
It’s far healthier to challenge negative emotions head on and do something that will actually resolve the problem. If you’re sad about an argument you have had with a friend, call them and make up; if you’re aggrieved by the poor actions of a stranger that led to you being injured, choosing the best injury lawyer and proceeding with a case is the first step towards closure. These examples allow you to truly move on from negative emotions, rather than spending money to try and distract yourself.
On the flip side, positive emotions can also have a rough impact on your personal finances. If you’re in a good mood or have recently received some great news, you’re likely to be overconfident about your ability to manage money.
This presents itself in a number of ways, but the most obvious is that you will take your eye off the ball in terms of financial management. You won’t check your bank account or scrutinize your credit report in quite the same way if you’re at a really good point in your life— it will seem trivial, unnecessary, and a potential downer that can spoil your mood.
Obviously, it’s great that you’re feeling positive, but neglecting your finances and becoming overconfident as a result is the direct opposite of “great”. The only solution to this issue is to practice financial discipline, and to always take the time to consult your budget and manage your financial affairs. If this seems like an unnecessary downer to your good mood, remind yourself that sound financial management will allow the good times to keep going, and you’re actually investing in continued happiness when you sit down to crunch some numbers.
Your emotions have the potential to impact your finances far more than you might think. By focusing on controlling your emotions, and your response to those emotions, you can be confident of continued successful financial management in the future.