Finance psychology is the study of the mind towards saving, spending, and investing decisions. Financial decisions are tied down in mind and significantly impact an individual’s psychological health and wellness. Therefore, it is an area of concern affecting several individuals. Let us brush over some of the practices to adopt in personal finance psychology and the relationship between money and our mind.
Emotions play a huge role
The emotions tied to money include guilt, shame, and envy. So, it is worth taking care of these emotions to avoid rational thinking. Shame is the most common emotion associated with cash. It is considered a reason for people avoiding what they know they should do. Some of the conventional shameful versions related to money are avoiding thinking about finances and not doing what you are supposed to be doing, like saving for retirement. Others include spending too much money or buying items when feeling unhappy and do not need the things.
Shame works well with avoidance, and for this reason, an individual may find themselves procrastinating on financial issues, which ends up costing them so much. Other emotions tied to finances are envy and greed, among others.
Family and childhood influences
We are all aware every family has a different view of money. Psychology is diverse, ranging from which gender should handle money and finances. Furthermore, they are always stories in a family concerning finances that are part of the family’s identity. Sometimes when you become successful, you may want to ignore your own financial needs and give back to your family. Nevertheless, it is an issue to address.
Mental health and illness
Health studies show that one in every three Americans is likely to suffer from mental illness. The various diseases include bipolar disorder, depression, and alcohol use disorder. Any individual experiencing any mental illness cannot be able to manage any finances. Therefore, for these individuals, delegating financial management is the best course of action.
How to deal with money emotions
It is not wrong to have emotions. It only shows you are alive. The key to dealing with emotions is self-awareness once you know what should be tackled at a particular time. It is the only way of dealing with emotions. For example, once you identify how to handle family relations regarding finances, it can influence your relationship with money.
The above mentioned are some factors that bring about psychological issues in regard to finance. It is best to address each case at its level to avoid having mental breakdowns and financial matters, as these are some of the contributors.