The Emotional Rollercoaster
of Our Financial Choices

Introduction

Recently, a 24-year-old girl cried after coming back from Coldplay concert as she felt FOMO! 

Have you ever wondered why some people seem naturally inclined to save a large portion of their income, while others, despite earning well, constantly find themselves short on cash? 

Often, the answer lies NOT just in financial planning, but in the deep-seated emotional connections we have with our money. Our feelings frequently dictate our spending and saving habits, shaping our financial lives in profound ways. 

Let's explore the diverse ways in which our emotions influence our finances and how we can strive for a healthier balance.

Why do some people emphasize SAVING v/s others emphasizing SPENDING?

People have vastly different relationships with money, leading to contrasting financial behaviors. 

Some prioritize saving, driven by a strong need for security. This mindset often stems from past experiences, such as family financial instability, where money is viewed as a safety net. Even small expenditures can trigger anxiety about not saving or investing enough. 

Conversely, others prioritize spending, finding joy and freedom in immediate purchases and experiences. For these individuals, money is tied to happiness and living in the moment.

These contrasting mindsets are often rooted in fundamental emotions, such as security and freedom. Furthermore, our upbringing plays a crucial role in shaping our financial tendencies. Childhood experiences and parental attitudes towards money can have a lasting impact on our financial habits as adults. 

Ultimately, individuals fall along a spectrum, with different priorities guiding their financial decisions.

Emotional drivers for money

Our financial choices are deeply intertwined with our feelings. The emotions we associate with money significantly drive our spending and saving habits, often on a subconscious level. For some, spending might offer a temporary boost of happiness, while for others, saving provides a sense of security. 

However, these emotional drivers can create imbalances. 

Excessive spending can lead to financial stress in the long run, while excessive saving might mean missing out on enjoyable life experiences. Recognizing these emotional connections is a crucial first step toward managing our financial behavior effectively.

FOMO (Fear of Missing Out)

A powerful emotional driver in today's society is FOMO, the fear of missing out. Social media plays a significant role in amplifying this feeling. 

Seeing others showcase their experiences and possessions can create pressure to spend to keep up. This can easily lead to spending beyond our means on non-essential items simply to avoid feeling excluded or left behind. This pressure to fit in can negatively impact our finances and increase stress levels.

Conclusion

Our relationship with money is deeply personal, shaped by our emotions, upbringing, and societal pressures like FOMO. Whether we tend towards saving or spending, understanding our emotional connection with money is vital for achieving a balanced and healthy financial life. 

• To take charge of our spending and emotional relationship with money, it's helpful to be mindful of our emotions before making significant purchases and to identify the triggers for impulsive spending. 

• Setting personal boundaries against FOMO and reducing the influence of social media can also be beneficial. 

• Furthermore, diversifying our sources of happiness beyond just spending or saving can lead to a more balanced life. 

Ultimately, our financial habits reflect our personal stories and beliefs about money, and we can shape a more intentional and fulfilling financial future by understanding and managing our emotions.