Emotional intelligence and money

Elaine King

Do you think that emotions and finances are different and distant concepts? I recently attended a workshop with the Director of the Emotional Intelligence Center of Yale University, Marc Brackett. The presentation was about emotional intelligence and the challenges we face every day when we let our emotions dictate important decisions. He made us think about the effect that this had on our finances. A Yale University study states that we make 80% of our decisions, including financial decisions, at an emotional level.

To understand this more thoroughly, I investigated the daily emotions that can affect your personal finances. Here are a few you should analyze:

Satisfaction: When our finances start to do well, we sometimes believe that things will always be this way and we can become a bit reckless.

Jealousy: There's a lot of competition today in terms of the assets that people possess, and you usually find yourself wanting a lot of the things that your neighbor, friend or boss have. Sometimes, this pressure can make you spend more than what you can. Flip things around and start asking yourself what you can do for others. To see the effects of money and social networks, take a look at this article.

Fear: Have you ever put off analyzing your finances? This is usually due to the fear of what you may find. You create a snow ball effect because the more you put it off, the more scared you'll be. Start being the owner of your finances today and don't let fear paralyze you. Subscribe to the Family & Money Matters Institute bulletin here to begin.

Laziness: The process of learning to manage your finances isn't fast and it isn’t easy; that’s why people prefer to avoid it. However, this brings huge consequences in terms of your quality of life. You can gradually become a financial expert. Follow me on Facebookand Twitter to get access to the best financial tips and make it a daily habit.

Anxiety: Does your anxiety get better when you go shopping? This is because shopping releases hormones that make you forget your problems. However, it's important that you learn to differentiate joy from adrenaline, since this practice ends up only covering up the problem, not solving it.

It seems that the solution to the financial problems that are linked to our emotions is self-control. The key is learning to postpone a small, immediate reward that will make you feel happy for a while, like having the latest phone, and enjoying a reward that is further away in time, but that will represent a greater satisfaction and will surely be more durable instead. The best thing that I can recommend is for you to monitor your emotions. There are many apps made to evaluate those emotions and to identify the causes and effects, check out this mood meter here.

What do you think? Do you feel identified? Tell me about your experiences.

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Elaine King - Family and Money Matters™ 2021