Money can trigger strong emotional reactions, which can lead to not-so-great decisions, like missing payments or overspending. A new wave of books urges people to explore their emotional connections to money in order to make better financial decisions.<\/p>\n\n\n\n
\u201cEighty-five or 90% of our money decisions are based on our emotions,\u201d says Bari Tessler, a financial therapist in Boulder, Colorado, and author of \u201cThe Art of Money Workbook,\u201d out this month. \u201cWe need to be understanding of what our money emotions are so we can not just feel overwhelmed or try to run away.\u201d<\/p>\n\n\n\n
Tessler had that experience several years ago, when she felt herself hyperventilating while at a car dealership with her husband. She excused herself to the restroom, where she questioned why she was feeling so anxious. Tessler realized that she strongly dislikes making quick decisions about money. So she and her husband took more time to discuss the purchase.<\/p>\n\n\n\n
As a result, she says, \u201cwe made the best decision we could.\u201d<\/p>\n\n\n\n
Consider your own money story<\/strong><\/p>\n\n\n\n When Los Angeles-based author and producer Rebecca Walker started soliciting stories for her essay collection \u201cWomen Talk Money: Breaking the Taboo,\u201d she discovered that many people felt shame for having money, guilt over having more than their parents, and regret over earlier financial decisions.<\/p>\n\n\n\n \u201cSo many women in my life were holding painful stories about money \u2014 confusing, troubling experiences with money,\u201d she says. \u201cSo many of us were trying to work all this out on our own, and that was keeping us from getting support.\u201d<\/p>\n\n\n\n Walker encourages readers to explore their own money stories \u2014 those experiences, often in childhood, that influenced how they think about money. \u201cI want them to find at least one story that they\u2019re holding onto about money, one memory or fundamental idea that has been shaping their lives about abundance or scarcity, and go from there. How do you want to change that story now?\u201d<\/p>\n\n\n\n Changing that story could result in concrete shifts in spending. For example, if you grew up watching your parents overspend without saving, then you might have to teach yourself how to save<\/a>.<\/p>\n\n\n\n You could explore using a tool like the 50\/30\/20 budget<\/a>. It suggests putting 50% of your take-home income to needs, 30% to wants and 20% to debt payments and savings.<\/p>\n\n\n\n Reflect on recent money experiences, too<\/strong><\/p>\n\n\n\n In her book, Tessler encourages readers to think about their last three money interactions. \u201cWhen you were checking out at the grocery store or exchanging money for goods or services in some other way, what emotions popped up?\u201d she asks.<\/p>\n\n\n\n Shame, anger, fear, guilt, joy, sadness and happiness are common reactions. \u201cMaybe it\u2019s reminding you of a past money mistake you made. Let\u2019s bring some awareness and understanding to it,\u201d she says.<\/p>\n\n\n\n Conduct a body check-in<\/strong><\/p>\n\n\n\n Giving yourself a body check-in, as Tessler did at the car dealership, is something Tessler encourages, especially when talking about money with a partner or making big purchases. Focus on physical sensations, including your breathing, and observe feelings or memories that are surfacing.<\/p>\n\n\n\n If you notice you\u2019re feeling tense, for example, then you can take a break or go outside before continuing. \u201cMoney emotions don\u2019t go away completely, but we can reduce them in size and intensity,\u201d she says.<\/p>\n\n\n\n Find your own calming techniques<\/strong><\/p>\n\n\n\n In her book, \u201cFinance for the People,\u201d Los Angeles-based financial educator and musician Paco de Leon suggests creating a list of strategies that help you calm down and using them before making a big financial decision, like buying a house. She lists ideas like going for a walk, reading a book and playing an instrument.<\/p>\n\n\n\n \u201cWe make decisions based on emotion and rationalize them after,\u201d she says. \u201cBut if we could deal with our emotions first, then you can go, \u2018I\u2019ve felt my feelings, now I can be rational.\u2019\u201d<\/p>\n\n\n\n De Leon took this approach when deciding whether to take on significant student loans. After setting the stress aside, she made a spreadsheet to crunch the numbers and decided law school wasn\u2019t for her.<\/p>\n\n\n\n Address your debt<\/strong><\/p>\n\n\n\n De Leon says that carrying debt, whether it\u2019s credit card debt or student loans, often makes people feel ashamed. She suggests changing the story we tell ourselves about debt by writing a letter to it, an idea she took from DearDebt.com. \u201cExpress your feelings; you\u2019ll see that they are complex. Consider thanking your debt for what it\u2019s allowed you to do,\u201d she writes.<\/p>\n\n\n\n Once you process those feelings, it\u2019s easier to tackle the debt<\/a> itself. You might decide to apply the debt snowball method, where you pay off the smallest debts first.<\/p>\n\n\n\n Forgive yourself for past mistakes<\/strong><\/p>\n\n\n\n Self-compassion is a powerful tool, says Michael G. Thomas Jr., an Athens, Georgia-based financial counselor and founder of Modom Solutions, a financial coaching platform. \u201cWe are more likely to extend grace and courtesy to other people when they make a mistake,\u201d he says. Forgiving ourselves for past mistakes can help us move forward.<\/p>\n\n\n\n In her book, Walker writes about forgiving herself for earlier choices to splurge on purchases instead of learning how to invest<\/a>. \u201cI let go of the idea that I did this terrible thing and extended compassion to myself, which was liberating,\u201d she says. \u201cIt allowed me to move forward in a healthier way.\u201d<\/p>\n\n\n\n This article was written by NerdWallet and was originally published by the Associated Press.<\/em><\/p>\n\n\n\n More From NerdWallet<\/strong><\/p>\n\n\n\n Kimberly Palmer writes for NerdWallet. Email: kpalmer@nerdwallet.com. Twitter: @kimberlypalmer.<\/p>\n\n\n\n The article Why Managing Your Money Starts With Your Emotions originally appeared on NerdWallet.<\/p>\n","protected":false},"excerpt":{"rendered":"Money can trigger strong emotional reactions, which can lead to not-so-great decisions, like missing payments or overspending. A new wave of books urges people to explore their emotional connections to money in order to make better financial decisions. \u201cEighty-five or 90% of our money decisions are based on our emotions,\u201d says Bari Tessler, a financial […]","protected":false},"author":7,"featured_media":2837,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"no","_lmt_disable":"","attr_excerpt":["Money can trigger strong emotional reactions, which can lead to not-so-great decisions, like missing payments or overspending. 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