Money is not a fixed entity. It is a complex of data points, challenges, and opportunities you encounter and have feelings about. Your decisions about money affect your emotions and behavior.
There are three factors you need to know about the psychology behind your relationship with money:
MORE IDEAS FROM The Psychology of Money: What You Need To Know To Have A (Relatively) Fearless Financial Life
All families have their own psychology of money: what they can talk about, who should be in control, how important money is.
You may have experienced subtle pressures to correct the injustices perpetrated or suffered by previous generations. You may feel internal pressure to go against the family money mentality, or you may the first in your family to succeed and may want to give back to the family while neglecting your own financial needs.
Mental health problems can have a significant effect on your finances.
The most important emotions about money to become aware of are fear, guilt, and shame. Without awareness, these emotions will interfere with your rational thinking.
Other emotions that influence your handling of money include envy, greed, and over-excitement.
Emotions can be useful. They tell you what matters to you.
Mild anxiety is motivating for example. Harness your emotions to attend to what you need to face.
Money is so much more than dollars and cents. Our relationship with money is emotional. Hopes and fears, guilt, and shame can all play a significant role in our financial life.
And those feelings can be tied to lots of things: our upbringing, our environment, and all the money messaging in the world and the media.
To us, being loved in a relationship is perhaps the highest ideal. It gives our lives meaning and purpose. Being loved validates our sense of self-esteem and soothes our fears of loneliness.
Our brains are also wired to fall in love. Dopamine provides a natural high and ecstatic feeling that can be as addictive as cocaine.
Anything important in our lives is emotional. Our relationships are emotional. So our money is emotional.
The problem is when we think money is all about math. We think questions like, "Should I buy a house?, or "Should I negotiate a higher salary?" is purely mathematical.
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