Being Emotional With Money: OK to Mix Emotions and Finance?

This is an excerpt from Dollar Scholar, the Money magazine where editor Julia Glum teaches you the modern money lessons you need to know. Don’t miss the next issue! Subscribe to money.com/subscribe and join our community of 160,000+ experts.


I can’t tell you how many hours I cried The Notebook in the mid-2000s.

A slumber party for a high school girl group. We ordered pizza and gossiped about who liked who (and who liked who) until someone had to put the DVD on. Clinging to a box of Kleenex, we sat in front of the TV, devouring Noah and Allie’s love story. By the end, we were crying so hard we could barely hear the dialogue.

As an adult, emotions are difficult – and often filled with guilt. Even in personal finance there are personal finance “rules” to never let yourself get emotional about money because it can lead to incomplete decisions.

But, as shown by my Notebook tears, I’m a very emotional person… and I don’t think that’s a bad thing.

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Is it okay to be emotional about my money?

According to Lindsay Bryan-Podvin, financial therapist and author of The financial solution, the answer is yes. In an email interview, he stressed that money and emotions don’t have to be kept separate.

In fact, “examining how your emotions play out in your relationship with money can help guide you to more appropriate and wise financial decisions,” he says.

When experts advise not to mix money and emotions, their main recommendation is to avoid making long-term financial decisions based on short-term emotions that may fade away. in the future.

Say I check my 401(k), worry about it going down due to stock market volatility and forcefully withdrawing all my money, incurring huge penalties/taxes and jeopardizing my retirement. Basically, I know the plot doesn’t make sense – but it doesn’t register because I’m scared.

Emotions influence all of our choices, says Jorge Barraza, a professor of consumer psychology at the University of Southern California. They are never absent, so it does me no good to label things as emotional decisions.

As he sees it, emotions are simple information that our brains use to make choices. And “feelings” are not always an obstacle to doing the right thing.

Imagine reading an article about how the Supreme Court overturned Roe v. Wade, I the famous abortion case, in June. As a woman who values ​​people’s ability to choose when to get pregnant, I am outraged — and I channel that outrage by donating to organizations like Planned Parenthood.

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If it wasn’t for my anger, I probably wouldn’t have done that. My feelings were a “go-to signal” that allowed me to make financial decisions with confidence to give to causes I believe in, Barraza said.

Uncertainty, he added, can also be useful: a red flag that something else is going on. My hesitation may have been a warning bell before clicking “Submit” on the UberEats checkout page where I put $30 worth of Wendy’s in my cart.

“Financially, when we worry about a decision, it’s probably because it’s too risky,” Barazza said.

As such, Bryan-Podvin says she encourages clients to think about financial and emotional “harmony,” or making sure their savings, spending, and spending are aligned with their values. (She recommends doing this using an app like Upwise or just keeping a journal.)

“While there is not much we can do to change inflation or stock prices, what we can do is use our understanding and awareness of our own emotions around finances to find a sense of control,” he said.

On that note, Buffie Purselle, author of Crawl Before You Ball: Breaking the Cycle of Generational PovertyI recommend building emotional expenses into my budget.

Spending $7 at Starbucks or going to Target after a hard day helps me feel better, so there’s no need to cut it – but I should put it in an emergency fund.

“We need to clarify the term ‘rain fund,'” he said. “People always think it means [you save for when] Your car broke down, but it could mean you’re sad, someone in your family died, you broke up with your boyfriend or girlfriend, or you didn’t get that promotion at work.”

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The bottom line

Contrary to popular belief, it’s okay to mix emotions and money. If I am careful, I can use my emotions to inform financial decisions.

“When we separate our emotions from finances, we can help reduce anxious or panicky decisions, but we also free up the power of our emotions to positively impact our lives. -money,” Bryan-Podvin said.