Although we don’t usually talk about it much, finances and emotions are highly linked to our way of acting. This topic is not talked about much because emotional appeal is one of the best secret sales strategies for large companies.
Knowing the relationship between finances and emotions is a key factor in learning to save and leading a healthy financial life that allows you to achieve your goals.
Why do we buy the things we buy?
Emotions are important and determining factors when making any decision. Speaking specifically about personal finances, emotions play an important role in understanding why we buy the things we buy and what the motivations are for acquiring objects or services that we often do not need.
How do prevent emotions from affecting your finances?
There are different simple practices to prevent your finances from being affected by decisions made based on your emotions. Get to know them below:
Learn about personal finances and organize yours
Although it may seem unusual, in Colombia, most people do not know how to manage their finances healthily. Although this practice and discipline are not part of the academic content in colleges or universities, it is essential that you know about good financial practices and not suffer later from a bad combination of finances and emotions.
Not keeping a month-by-month financial statement of your finances is one of the most serious mistakes you can make. Organize your finances by knowing your income, your debts, your average expenses, and your savings. This will help you understand what your spending capacity is for the purchase of any item that may be motivated by your emotions.
Regulate your expenses
Ant expenses can also be expenses that are strongly linked to your emotions. Do you need to drink that expensive coffee every day after lunch in your office? Do you take advantage of all the streaming subscriptions you pay monthly?
Always save when you receive your income
Saving not only helps you have extra money for your goals, but it is also a practice that requires discipline and will help you control expenses motivated by emotions. Save a percentage of your money as long as you receive your income. Avoid “saving” the money you have left over, because that money will never really be left over and you will not be able to save.
Organize your monthly finances
Once you have organized your expenses and income, you can organize your finances by keeping an Excel spreadsheet or downloading an application on your cell phone that allows you to record your expenses.
Emotional intelligence and finances: exercise your self-knowledge
Self-knowledge is key to preventing your finances from being lost in debt and the accumulation of objects that you don’t need. Mental health and emotional stability also play an important role in the world of personal finance.
Surely you have met people who, to feel better, go out to buy clothes, go on a trip, or even need ice cream to cheer themselves up while going through a difficult time. It is a practice that has been quite romanticized in our society: seeking relief in the accumulation of objects to forget about some problem or situation that we must solve or face.
Perform a self-analysis of your motivations:
You must make an effort to know your motivations when managing your finances. If you frequently have the feeling that you should buy something new or something else to make yourself feel better, you should work with a psychological counselor to examine the source of those feelings.
Many people have lost their belongings to pay million-dollar debts motivated by unchanneled emotions.
Finances and emotions: don’t be carried away by pressure
Personal finance experts say that one of the worst mistakes that threatens a person’s finances is making purchases for show. The desire to belong to a social group often leads us to go into debt to buy a more luxurious car or the latest model of phone that we know we cannot afford.
How to make meaningful financial decisions?
Surely you have heard the phrases: “You only live once”, or “That’s what I work for,” and it is not about that From now on, you do not buy ice cream so as not to get carried away by your emotions and spend money.
The important thing about having a healthy financial life is that you achieve a balance between your recognized emotions and your rational part.
Living well and taking advantage of the fruits of your work should not stop you from doing something positive. On the contrary, you must enjoy them with responsibility and planning so as not to have to go through needs in the future.
When making a financial decision, in addition to taking your emotions into account, it is also important that you consider your motivations, your future goals, and your financial reality.
Be honest with yourself and analyze if you need to acquire that object and what your debt capacity is, and be completely sure that your motivation, in addition to having an emotional appeal, also has a rational part.
