Money is Emotional: One Tip for Staying Smart and in Charge
Every decision we make is emotional. But dealing with money can turn an otherwise smart, organized person into a hot mess. Our emotions around money can range from anxiety, fear, envy and helplessness to hope, happiness, joy and everything in between. In fact, Researchers found that money has similar effect on our brain to cocaine.
As Daniel Goleman, author of the popular book Emotional Intelligence: Why It Can Matter More Than IQ puts it: “If there’s any topic that arouses the amygdala – the brain’s center for hope and fear – it’s money.” He added that brain scans typically show how irrational we really are while making what we think are rational decisions – especially about money.
That’s because we typically hold deep emotions about money or success that we often don’t even know are there. They can make us expect less for ourselves or set our focus on the wrong things (so we ignore the right things). They can cause us to expend so much energy feeling lack and scarcity that we have little mental bandwidth left to make smart choices. The kind of choices that would lead us to what we really want.
The good news is that it’s something we have the power to change. And we can start the ball rolling even by just focusing on one thing.
Enter mindfulness. Now, I know this word can send some people running for the hills. But there’s a reason Google, General Mills, Target and many others invest in it for their employees.
It may sound like some woo-woo spiritual practice. But it’s absolutely key to changing your life. You can call it “paying attention and getting strategic” if that sounds better. Because that’s what you’re essentially doing.
The reason we’re irrational when it comes to money is because we have two brain systems that work in tandem.
We think we’re making decisions with our slower, conscious analytical brain—the one that we’re aware of that holds our life’s goals, dreams and desires.
But we typically default to letting our super-fast, super-powerful, automatic subconscious brain (aka “robot brain”) make the decisions. The one that holds memories of our childhood and past experiences and uses them to make present decisions.
So the key to making better decisions and getting more of what you want is to use your conscious brain.
But how? Your unconscious brain goes into action so fast, it almost seems impossible.
That’s where mindfulness comes in. It’s essentially a pause, allowing you to shift from a default choice to a purposeful choice.
There’s a tiny space that exists between a feeling/emotion and the habitual choices we make (the ones that can keep derailing us). If we’re mindful, if we’re noticing how we feel, we’re interrupting those rote actions so we can make a wiser choice. This can help you with investing as well as your daily decisions. In fact, a study of 101 stock investors at the University of Maryland found that investors who acknowledged, understood and regulated the feelings that came up for them achieved higher investment returns.
In the day-to-day, this means observing thyself. Paying attention to your emotions because it’s the only way to make conscious choices.
For example, “I’m feeling X right now, my goal is Y. My emotions are telling me to go left. Why do I feel that way and what do I really need to do the get to Y if that’s what I really want?”
Your emotions lead to your choices, so they create your life, for better or worse. Mastering them takes time and practice (we are all works in progress). But striving to get better at it gives you the best tool in the shed for reaching your most important goals.
Here’s a challenge: Set your watch or phone alarm to go off once in the middle of the day. When it does, take a moment to think about what you were thinking about. Try to do this often to start a practice of thinking about your thinking (in science terms this is called metacognition. It simply means thinking about your thinking). The more you do it, the more aware and mindful you can become, and that’s where transformation begins.
What’s one thing you could shift, or have shifted, in your finances by being more mindful? I’d love to hear from you in the comments below.
Thank you for reading, and if you found this post helpful, please Like, Tweet and Share to help inspire others!