Personal Finance Advice

Managing your money is not all about how much money you make. There are plenty of people who make impressive amounts of money, but who do not manage their money well at all. Think of all the instances of famous celebrities who once made absurd amounts of money but then wound up with nothing to show for it; it’s not about how much money you make, it’s about what you do with that money when you get it.

Managing personal finances has a lot to do with managing your emotions. It can be said that a large portion of managing money has to do with psychology as opposed to financial savvy, although a combination of the two can set the stage for effectively managing money.

Think about it; even if you were not taught the very basic fundamentals of managing your money, some things make so much sense that even the most novice money manager can’t claim to not understand. Don’t spend more money than you make. Pay your bills before the due date. These are the fundamentals that are so easy to grasp that it becomes obvious that understanding these concepts isn’t the issue with the vast majority of people. Instead, it is the emotion behind the way they manage their money that becomes their financial downfall.

Do any of these statements ever run through your head?

“I should go ahead and splurge on this because I deserve it.”

“I’ll show that company a thing or two about charging me those fees! I’ll just stop paying!”

“Of course there’s money in my account. My debit card works.”

“People will respect me more if they think I have a lot of money, so I need to wear expensive things and drive an expensive car.”

Human emotions are incredibly powerful. Sometimes, the emotional response to a situation can throw logic right out the window. This is why you talk yourself into buying something that you really can’t afford to buy or make irrational decisions on how to manage your money. When your emotions get triggered, it may be quite difficult to listen to the logical side of you that understands that spending money frivolously doesn’t solve problems. Whether it’s jealousy, boredom, or some other emotion that drives your spending and money management, you have to learn to reel in your emotions and look at your money in the most logical way possible.

The next time you get the urge to impulsively buy something because you feel as though you deserve whatever the item is, step back. If you can’t afford the item right now, then frankly you don’t deserve it. Do you really want to deprive yourself in the future just so you can momentarily enjoy an impulse purchase now? When you view the situation logically, it makes a lot of sense to put your wallet away.

It isn’t easy to put your emotions in check, especially if you are a highly emotional buyer. It may take practice to recognize when your emotions are driving how you manage your money. If you can master your emotions as they pertain to your financial management, however, it will be well worth it and chances are good that you will notice a lot less stress in your life overall.