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Are Your Emotions Hurting Your Money

Written by: Andrea Travillian

Article Overview: Emotions play a role in our decisions every day. Learn how to make sure they do not cause you to make bad money decisions.

Are Your Emotions Hurting Your Money

I suffer from migraines. Migraines are often very difficult to figure out why they occur because they are often caused by multiple triggers, and not necessarily the same ones each time. It has taken me over 15 years to figure out what my main triggers are and slowly get them to a point where they were manageable. Recently I uncovered a "new" trigger - allergies. I have had allergies since I was a kid, but other than a few weeks in the fall and anytime cats were around I did not take my medicine on a regular basis. I did not believe it was that big of a problem. This spring everyone kept talking about how bad allergies were going to be due to the unusual winter so I began taking my medicine on a regular basis. After a month I realized that my migraines had been cut in half, I figured it was just a good month that coincided with my taking allergy medicine. Then the next month the same outcome occurred, so I decided to keep my allergy medicine going to see if it was the real reason my migraines were decreasing or just another coincidence. Well, now it is July and I think I can officially say that allergies were a big trigger! Here is the thing, I always knew that I had allergies and that they could play into my migraines, but I never acknowledged exactly how much they played a role in them. So by now you are wondering exactly what this has to do with personal finance, other than reducing the extreme costs of my migraine medicine. Personal finance has a trigger of its own that can cause bad decisions, is with us all the time but most of us do not acknowledge that it has an impact on us. This trigger is your emotions.

Just based on the fact that personal finance is well - personal means that your emotions, whether you realize it or not, have an impact on the decisions you make with your money. This happens with both small and big decisions. When I have had a rough day and still have to face the prospect of putting a meal on the table many times my emotions take over and I choose to do take out or even go out when I know that I may have already gone through my dining out budget, but my emotions take over and I can see no other option. This is an emotional decision that impacted my finances. Pile a bunch of these together and they can slowly start to wreck havoc on your money!

The big financial decisions impacted by emotion can be even more detrimental to your finances. Buying a car is one of those big purchases that has lots of emotion swirling around. You may be pushed by a need to drive a better car than a relative or coworker, maybe you are sick of repairs or you just feel you need a new one because you graduated college or hit some other big milestone. So instead of figuring out exactly how much you can afford, or saving for a few months and paying cash (which is what I recommend) you run out and buy the first shiny new car you like. This can throw your finances off for years if the payment pushes you over budget, the interest rate is too high or you just bought the wrong car.

So how do you stay aware of and control your emotions when you are making money decisions? I recommend four steps to be aware of when you are dealing with money.

First, allow yourself extra time to make a decision. This is especially important the bigger the decision is. During this time do what feels right to you in order to position yourself best to make a good decision. I myself use this time to evaluate the decisions from a pro and con basis, ask for advice if I need another opinion (or three or four more opinions), and pray. Do what feels right to you; just don't rush into the decisions as this is when stress and other emotions can really trump logic. It is okay to say I need more time.

Second, ask yourself why you are doing something. This is a great question to get to the heart of what emotion might be dominating your decision making process. Sometimes it takes asking many whys before you arrive at the true problem. Keep drilling down and you can uncover some interesting motivators that help you understand the emotions behind a decision.

Third, monitor your physical reaction to events. Your body is a great indicator that something is wrong or you are being emotionally driven. If my heart is racing when making a decision I know to stop, calm down and figure out what is really at the source of this reaction. It can also be a sudden mood change that triggers an alert that you might be deciding with your emotions. Be aware of what your subconscious is trying to tell you through your body.

Finally, be aware that you cannot remove emotion from your financial decisions, and in my opinion you should not try to completely remove them as this leads to heartless decisions. However you do need to know how your emotions are impacting your decision, so if necessary you can rein them in. Know what is driving you from all angles and then make an educated decision.

Emotions drive many of our financial decisions. Take the time to stop and understand what these emotions and decisions do together and your finances will thank you.

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Article Tags: bad money, emotional money, money, money decisions, money emotions
Referred by: http://www.SohoMarketingGuru.com



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