Have you ever tried to separate a magnet clinging to metal?
It’s not easy to do, but even when you do manage to separate the two, the magnetic force pulses until the reunion.
Money and emotions are a lot like this—they are connected, bonded together in a way that influences one another each step of the way. Most times we don’t think about money being emotional. It is portrayed as a bill to pay, a living to earn, a way to navigate the world.
But money is so much more than that. It can make you laugh, cry, scream, and overwhelm you with pain or joy. Understanding the emotional pull of money will help deepen your relationship with it, increasing the health and efficacy of your financial plan.
The emotional component of money is so strong that it can influence the decisions you make and how you respond to those choices. Let’s take a look at a few ways that embracing and controlling the emotional side of money can actually help your financial strategy.
Know your relationship to your finances
The way that you view money can have a significant impact on how you use it. Relationships are one of the most driving factors in our lives and yet we aren’t often aware of our relationship with our finances.
This is an important relationship as it sets the tone for ourselves, our livelihood, and others around us. Taking the time to understand and nurture our relationship with money can provide a deeper understanding of how we handle and manage the money we have.
One of the biggest indicators of your relationship with your finances is how money impacted your development. How were you taught to manage money?
Your parents’ or guardians’ use of money plays a significant role in how you view and handle money today. If money wasn’t a topic that you discussed, maybe you weren’t able to learn the significance of it and the role it would play in your adult life. Or perhaps your household was acutely aware of financial management and you were able to learn and apply positive financial habits in your life.
Understanding how money was discussed and handled throughout your life can provide excellent insight into the way you see money now including positive and negative financial habits you may have developed. Take the time to ask yourself a few questions:
How do you view money in your life?
What aspects of financial management cause stress or anxiety?
Does any part of your financial plan excite you?
How do you feel about your financial future?
By taking the time to understand your relationship with money, you will be better able to see the places that need work and how you can grow.
Turn roadblocks into revisions
Every relationship takes work—with your spouse, your family, your friends, yourself, and your finances. Along the way, you will find places that need strengthening and those moments allow for the best chance to grow.
When you think about how your relationship with money has impacted each stage of your life, you may find that there are some roadblocks standing in your way. Perhaps it is the fear of not having enough saved for retirement or wondering if you even want to retire in the first place. Having a clear sense of the roadblocks in your financial plan will help you create a plan to help you conquer them.
If you are nervous about your retirement savings, for example, take the time to look at the savings you do have. Analyze your accounts and get a true sense of where you are. Take a look at your retirement goals and if you are on track to meet those goals. If not, you can start to implement practical measures to help which could be anything from contributing more to your retirement plan, altering your risk tolerance, or seeking professional guidance from a team that will help you create and execute a plan that will work for you.
No matter what you do, it is important that you embrace the feelings you have about your financial plan, because those feelings, whether positive or negative, can help lead you to practical solutions. If you simply ignored your uneasiness about retirement, it could manifest into a deeper problem, but by addressing it early you will be able to find concrete solutions to help bring you where you want to be.
Refocus your financial goals
Emotions are an asset rather than a liability in your financial life. They can help you explore new areas and lead you to make positive and lasting changes in your financial life. The thing about emotions (and money) is that they are constantly changing, making it important to use them in a way that will enhance rather than detract from your financial life.
One way to do this is to set realistic, manageable, and attainable financial goals. Give yourself time to celebrate your milestones along the way and be patient during setbacks or stalls. If something is in your way, take the time to work through meaningful solutions.
Money and emotions will always work together to influence your financial life. Embracing your emotions about your finances can lead you to an awareness and a drive to improve your finances both when times are good and when they are hard.
But you don’t have to do this alone. Set your financial goals with your spouse and your family to help each of you stay accountable and inspire you to achieve the goals you set. Our team at BWM is passionate about your financial success. We love working with people to help them create a plan that will help them reach their goals both financially and personally. Schedule a call with us to get started today!