July 20, 2016

Do You Understand Your Emotions About Money?

If you’ve ever felt a rush of excitement at making a big purchase or experienced feelings of shame at making a financial mistake, you know that our relationship with money isn’t completely rational. For most people, money comes with a lot of emotional and psychological baggage that affects the decisions we make. Psychologists call these emotions “money scripts” and have found that these unconscious beliefs can drive many positive and negative financial behaviors. Many of our money scripts come from our families and the way our parents handled and discussed their finances. It’s one of the reasons why we encourage our clients to talk to their kids about money and teach them good financial skills early in life. As adults, it’s also our responsibility to explore and understand our own feelings about money and how they drive our behavior. As financial professionals, we know that money is a very emotional subject. We have seen many instances where emotions drive negative actions. Emotional investing decisions can wreak havoc on long-term performance by leading to overconfidence when markets rally and panic when markets decline. Anxiety about the unknown can leave people feeling paralyzed with worry and unable to make financial decisions or […]