Emotional Money Matters

This is an excerpt from the Guideposts book Managing Your Money. Click here for more on this and other Spirit of Simple Living books.

We all face situations that threaten our financial security, but it is our emotional response to these situations that directly affects how we will handle our money. Financial adviser Suze Orman says fear can express itself in one of two ways: "Fear can prevent you from doing what you should with your money, or it can cause you to do what you shouldn't with your money."

Shame is the most deeply rooted emotion—telling us we are not good enough. Shame manifests itself in our financial dealings by causing us to spend more than we should in order to make us feel like more than we are. Or shame causes us to neglect what we do have, disabling us from taking pleasure in money and what it can do for us.

Anger makes us suspicious and unable to trust. It can make us feel as though someone is always out to take advantage of us. If we are angry about being deprived, we might continue the deprivation in order to sustain the anger. Or the anger may cause a person to become unwilling to share with anyone.

It takes courage to face the memories that have so deeply affected our financial perspectives, but it is necessary if we want to develop a healthy respect for money and ourselves. If we do not examine what influences our decisions, then our emotions may continue to wreak havoc and determine our spending and saving patterns for life.

Orman says we will not gain a healthy perspective until we are able to forgive the people who helped create those memories. But we also need to forgive ourselves for allowing our emotions to play such an important part in our financial lives. When we are able to forgive, we will be able to create a future with hope and finally learn to control our use of money, rather than letting money control us.

5 Simple Tips for Managing Your Money Emotions:

1. Examine your own fears, shame and anger regarding money.
If these emotions are present, can you determine why? Perhaps you simply continued the same mind-set your parents had toward money. Or you may have responded to their examples by vowing not to do what they did. In either case, can you recognize that the source of your perspective is an emotional reaction?

It's time to find out how your emotions are playing out in your financial health, and make logical adjustments if needed.

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