Money-Based Emotions Matter: Identifying How You Really Feel About Your Finances

Money-Based Emotions Matter: Identifying How You Really Feel About Your Finances

Money-Based Emotions Matter: Identifying How You Really Feel About Your Finances

What do the words “retail therapy” mean to you? Do you consider it a form of self-care, as key to managing your emotions as, well, actual therapy? Maybe it’s less about making big purchases in an effort to cure what ails you and more about treating emotional blips—a tough meeting with your boss or a great date—with little indulgences (a coffee here, a manicure there).

This isn’t about judgment. When it comes to your finances, there’s no right or wrong way to feel. But it is about acknowledging that spending habits are linked to emotions. With that in mind, it’s crucial to think about whether any buy—big or small—is actually meeting your needs, emotional or otherwise.

Why is that so important? Buying anything more expensive than a cup of coffee is actually a life decision, affecting your financial and personal well-being. And even those seemingly harmless lattes have an impact; at up to $5 a pop, they rack up quick. As such, when you “get present” with your emotions, you can avoid financial mistakes and harness opportunities you might otherwise miss. In other words, you can hack your own psychology for a healthier financial existence.

That’s a pretty valuable skill, particularly because humans are great at finding seemingly logical reasons for their poor decisions. Perhaps science fiction author Robert Heinlein put it best: “Man is not a rational animal; he is a rationalizing animal.” And since retailers are in on that secret, we’ve got even more to contend with.

With our eagerness to do all that rationalizing in mind, they’re working to make the purchasing process as seamless as possible, thus limiting the chance to reconsider as we pull out our wallets. In the era of “tap to pay” and “buy with one click,” it’s so easy to follow impulses and give into emotions. We’re all susceptible. I love Amazon as much as the next gal. I marvel at the fact that it’s as easy to buy a coffee table as it is to grab a cup of joe. But I also know that retailers profit when I—and you—don’t think.

Again, this isn’t about judgment. I’m not telling you not to indulge once in a while, or that a perfectly foamy cappuccino can’t lift your mood. But I am urging you to think through those emotional buys and how they add up. That mid-day pick-me-up in the form of a $4.50 cup adds up to $22.50 a week, $95 a month, and $1,140 a year—enough to get you from LA to Australia and back. Don’t get me wrong: I frequently reach for that cappuccino. But I consider the impact of my buying habits, especially when I’m going for something bigger.

For more on what your money-based emotions mean for your wallet—and your life—check out my book, Fin(anci)ally Free! 11 Conversations to Have With Yourself Around Life, Money, and Your Worth

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