Being aware of the emotional drivers behind our financial behaviours could help us make better financial decisions and achieve financial well-being.
Financial well-being as a goal has gained popularity in recent years. The economic prosperity of the past three decades has enabled many people to improve their financial conditions significantly. But rather than being at peace with it, the improved financial conditions have brought on added stress, which people find difficult to manage… because they are incapable and unprepared for it.
A pervasive reason for this widespread lack of financial literacy is that we have never been taught about money and basic financial matters or skills at home, community, school, or college, which are the primary sources of knowledge and education for most of us. Like arts and sports, basic financial education must be incorporated into our formal education curriculum.
Being financially literate might bring a sufficient degree of proficiency in basic money matters such as income, budgeting, spending, saving, investing, or sharing with others. However, financial literacy doesn’t always lead to financial well-being; in other words, financial well-being cannot be achieved through financial literacy alone.
To understand ‘financial well-being’ clearly, it would be more instructive to begin with ‘what it is not?’ than with ‘what it is?’ Financial well-being is not about having a high income to achieve a healthy lifestyle. It is also not about acquiring huge wealth so that you, your children, and your grandchildren will never have to worry about money again. It is also not about maintaining a lifestyle equal to or better than your parents, siblings, or other close family members or friends. It is, or should be, more than that.
Is it about being happy? Money’s relation to happiness is ambiguous. Some people can be content and at peace without much income or wealth. Some other people, despite earning millions, could be so miserable that they might have contemplated suicide at one time or another, or even attempted one: suicide by people with extreme wealth is not uncommon.
So, what is our relationship with money? Money matters are too personal for most of us to discuss with others, even with our close ones. Surveys suggest people are more willing to talk about their sexual matters than their money matters.
This behavioural pattern has a religious connotation, as most religions consider the pursuit of wealth a sin. People with parents who value such religious beliefs might have inherited those beliefs from their parents. The fear of being overwhelmed by emotions while discussing money matters could also restrain people from discussing it.
Shame, guilt, fear, and anger are major emotions that money could trigger in a person. However, it will do us good to inculcate a willingness to be open and transparent about our money matters. Various studies have found a strong correlation between financial stress and a person’s mental and physical health.
There are enough examples around us of money’s power to wretch relationships. Money could be traced back as the prime motivator behind many of the crimes we read in daily newspapers. So, money matters for our overall well-being at the individual and the larger societal level.
Financial well-being means effectively managing our money and feeling in control and secure about our financial situation. It is not about how much we have or what we do with it. Instead, it is about how we feel about it. The financial psychotherapist Vicky Reynal, in her book ‘Money on Your Mind’ calls it ‘Financial Emotional Awareness’.
Our relationship with money could be widely different from others but it determines how we manage our money and how we feel about our financial situation. How our parents dealt with money, the financial conditions at home during our early upbringing, and our emotional connection with our primary caregivers significantly influence our relationship with money.
You might feel ‘shame’ if you earn much less than your siblings or close friends. You might try to catch up with them by overspending, but rather than catching up, you get into a debt trap. If you possess inherited wealth, you might feel guilty about undeserving of the wealth or having much more than others without effort. This guilt might cause you to hide the wealth, spend it away recklessly, or become socially isolated, none of which is in your best interest.
The fear of having insufficient money to meet basic needs might engulf those who have grown up in impoverished conditions. Such people might horde money and be miserly, despite now being in a better and more secure financial condition. People who were emotionally deprived by their primary caregivers when young would feel anger at being unfairly treated and that anger can be expressed in adulthood through reckless overspending, addictive shopping, or even stealing.
People might carry hard feelings from childhood if they grew up with high-earning, career-focused parents who were less involved in their children’s lives when young. Such people might self-sabotage their careers or avoid high-earning opportunities fearing that they might neglect their children, just like their parents did.
The emotional drivers behind these financial behaviours lie largely in the unconscious; therefore, we are mostly unaware of their harmful nature. Hoarding might be mistaken for saving, overspending might be mistaken for self-care, and guilt might be mistaken for generosity.
Making better financial decisions and achieving financial well-being requires a better understanding of our choices and rationally choosing one in our best interest. No one intentionally chooses against their best interests. Poor decisions happen when we are not in control of our financial situation because of being waylaid by our emotions, mostly unknowingly.
All the emotions associated with money discussed here are uncomfortable, whether it is shame, guilt, fear, or anger. According to Vicky Reynal in ‘Money on Your Mind’, we are more prone to act on our uncomfortable feelings rather than sit them out, leading to poor financial decisions.
We are not our emotions. Most importantly, we are not our negative emotions and the worrisome thoughts such emotions generate. Emotions are transient. We don’t have to act on each of our emotions. Convincing ourselves that it is normal for us as humans to feel and have such emotions would be comforting and could go a long way in restraining some of our impulsive financial behaviours.
But, sometimes, the emotional experience might be so intense that we get engulfed by it and find it hard to stay in control. Anger is most likely to create such situations. Venting anger (on others) might feel comforting at that moment but comes with awful consequences later.
Our job is to prevent our emotions from endangering our well-being. Firstly, we must be aware of our feelings as they arise: an emotionally mature person is always attuned to his feelings. Next, we need to cope with them. Once we have done that, we could rationally evaluate the merits and demerits of each of our choices and choose one that is in our best interest.
However, choosing one also means we are letting go of other choices. There is always a trade-off to be made. The one we choose doesn’t necessarily have to be the most efficient, productive, or lucrative one, rather, it should be the one we are at peace with. Letting go of a part of the expected return for more peace would only add to our financial and overall well-being.
Every emotion comes with automatic responses, especially fear and anger. Such impulses to act are never in our best interest, we must restrain them to pursue our greater goal of financial well-being, and for that, the underlying emotion behind the impulse must be subdued. Quick-fix strategies that suppress or soothe uncomfortable emotions might provide short-term relief but don’t help fulfil our greater goal. Subduing uncomfortable or negative emotions permanently could only be done through the power of understanding – why we feel the way we feel.
People who were emotionally deprived in early childhood might carry hard feelings from their childhood into adulthood. They might try to compensate for their childhood emotional loss through materialistic gains by indulging in overspending. Those who had lost significant amounts of money by investing in fraudulent investment schemes might harbour mistrust towards all emerging investment opportunities, even genuine ones that might be in their best interest, even if decades have passed since the former unfortunate incident.
A person who grew up with highly critical parents might have low self-esteem. This might cause them to feel guilty if better financial conditions ensue in adulthood. Negative unresolved feelings from childhood make them feel unworthy of their increased fortune. Despite the better financial situation, such people live under increased financial stress that negatively impacts their careers, health, and relationships.
You deserve a better life. Don’t let your past experiences or other people make you think otherwise. Once we have gained clarity on our relationship with money through financial emotional awareness, we can work on changing our deleterious financial behaviours through better financial decisions.
Don’t run away from difficult feelings. Attempting internal transformation through external materialistic means will only leave us disappointed. Difficult feelings can be effectively dealt with only internally. Be aware of it as it arises; examine it, and then address it. This is a painful process but beneficial also.
Whenever a painful situation arises, we are inclined to adopt a ‘flight-or-fight’ mode. Most of our unhealthy financial behaviours are attempts to divert attention from the difficult situation. Pain is inevitable. How we deal with pain determines whether the pain will lead to progress or suffering.
Indulging in unhealthy financial behaviours to ease the pain might have short-term soothing benefits. But as the pain has never been properly dealt with, it metamorphoses into suffering. Now the pain will resurface recurringly, and each time it does so, we indulge in the same unhealthy financial behaviour, which over time makes our financial position more and more precarious. But by reflecting and learning from the pain, we can use it for progress.
It is our distorted perception of pain that causes us to indulge in all sorts of unhealthy financial behaviours. In a difficult situation, instead of feeling the pain of facing reality, we are inclined to distract ourselves through pleasure because it makes us feel good. Pleasure is an indulgence. It doesn’t change our situation for the better. But our pain could do that.
What is required of us is a better perspective of pain and tolerating situations that are likely to be painful. By reframing pain as a stepping stone towards progress, we could have a healthy relationship with it. We could then reflect on the pain and use the insights gained to make better financial decisions.
Greed, the insatiable desire for money, is one of our many unhealthy relationships with money potent enough to endanger our financial well-being. As the insatiable desire is never satisfied, regardless of how much we have, we are mostly anxious and are unable to relax or enjoy life. Not all desire for money is greed. Sometimes it could be our aspirations to provide better economic conditions for our family and children, which is a good desire for money.
Greed is a bad form of desire for money. The desire becomes greed when the pursuit of wealth never ceases and gets out of control, despite being in a better financial position. When there is no lack of money, we create fictitious lack from our imagination to rationalise our greedy financial behaviours.
It is usually an internal emptiness or deficiency that we aim to resolve through our greed. People deprived of attention, love, care, and attachments in childhood would try to make up for those losses in adulthood through extrinsic gains such as money.
Some parents give love or attention to their children only when they do certain things or achieve something. Such parents try to find emotional fulfilment in their children’s behaviour, achievement, and success. People with such parents might consider wealth as a means to gain love or attention.
You are not your parents. You are not responsible for their emotional well-being. Your life is not a vehicle to fulfil your parent’s unmet needs.
Things could change for the better once greed’s damaging effects on our well-being are brought to our attention. Striving for internal transformation or fulfilment through money will only leave us disappointed. The disappointment gradually evolves into a disgruntled feeling that harms our lives, work, and relationships.
Realising greed’s damaging effects and being willing to sit with and reflect on our uncomfortable feelings could purge greed from our minds, and thus, improve our financial well-being.
A content life doesn’t originate from having more. It stems from making the best use of what we already have. Last week, how many pages did you read of that book you bought five years ago, because you always wanted to read it? Very unlikely because you didn’t have time. But you found time to browse for the next bestseller to read.
Did you talk with your wife today about anything outside household chores or children? Did you connect with your children about anything outside their daily chores, school, or studies? Maybe you have, but it will only be a fraction of the time you spent chasing for more.
Prepare for a huge disappointment if you are chasing something under the expectation that this ‘something’ will add something more to your life. If you are discontent with what you have now, you will never be content when you get that ‘more’ you are chasing.
The same goes for financial well-being. It is not about having more, but making the best use of what you already have, by setting realistic goals, being aware of your choices, and making decisions in your best interests from a rational level, not from an emotional level.
Rather than thinking, can I ‘have more or do more’ to achieve financial well-being, shift the perspective to, can I ‘have less or do less’ so that I feel more secure and in control of my financial situation?
This doesn’t mean that money and wealth are irrelevant. Apart from meeting our essential needs, money significantly influences our living conditions, opportunities available to us, and the safety and security under which our children grow up. But money is a means to an end. Only when money is intrinsically valued, that is, when we tie up our happiness, love, peace, and self-worth to our money, does it start to mangle with our well-being.
Our generosity with money – giving or sharing money with others – has more complex dynamics than greed or spending. Religions and societies have always favoured and encouraged generosity, unlike greed, which is abhorred by both. Our feeling of love and empathy towards fellow beings is the driving force behind our generosity.
That’s how it should be. But that’s not how it always is. There could be other positive or negative motives behind our generous financial behaviours, some of which we are unaware of. Giving or sharing activates the ‘feel-good’ region of our brain. Therefore, rather than being purely altruistic, our generosity might be concealing our selfish motive to feel good.
Society exists for human well-being. However, what we usually see nowadays is humans sacrificing their well-being for societal approval: to fit in and be taken seriously by society. Generosity is one-way people try to achieve it. Here, beneath our generosity hides our sinister intention to use other people for our selfish gains.
Employers might show financial generosity towards their employees to prevent employees from leaving the company. Such tendencies to use generosity to avoid separation could also be found within family arrangements. People feeling guilt about their greed might try to compensate for it through generosity.
If we had wronged someone in the past about which we regret now, we might attempt to rectify those wrongs through generosity. Sometimes such generosity to compensate for regret might not even be directed at the person we have wronged: that opportunity might not exist now. Any generous act done with selfish interest, whether we are conscious of it or not, does not improve our financial well-being.
In some cases, generous financial behaviours might have sinister intentions. Malicious intentions such as bondage and coercion are examples. Bondage means I give money to you, so you remain subservient to me. Coercion means I give money or spend money for you, but you do what I want you to do.
For our generous financial behaviour to contribute to our financial well-being, it should be devoid of all selfish and malicious intentions. The intention should purely be altruistic: an act done just for the receiver’s benefit. Also, generosity should originate from an inner feeling of abundance. Instead, it is often used to resolve an inner feeling of emptiness through an expectation of gratitude.
Even if done with the best intentions, using the power over money to control other people is another unhealthy financial behaviour. Trying to control other people through money is an encroachment on their autonomy. People cherish their autonomy, so once they feel it is being threatened, they might react indignantly, which often has deleterious consequences.
In relationships, the level of intimacy between partners determines their willingness to spend or give money to each other. In marriages, the attitude would be like: if you deprive me of love and intimacy, I will be parsimonious with you. Lack of trust in relationships could lead to withholding of money.
Control is considered unhealthy even if done to cause positive behavioural changes in another person, such as restraining their overspending habit. Those who exercise controlling behaviours are those who wield power over money or other financial resources, and they usually justify their actions as being cautious or protective. However, their controlling behaviours might be masquerades to resolve internal deficiencies, such as feeling powerless, helpless, or hopeless: they intend to feel powerful through their controlling financial behaviours.
No extrinsic financial behaviours could correct our internal shortcomings. Parents might restrict their children’s access to money to express their anger or disappointment over something the children did (or didn’t). Sometimes using power over money to control others might have cruel intentions and go to such extremes as limiting a person’s overall economic situation. Sadistic intentions such as humiliating, belittling, or isolating others could also be driving controlling financial behaviours.
Controlling access to financial resources impairs relationships whether done with good or bad intentions, as it encroaches on a person’s autonomy, freedom, and self-worth. If we carry good intentions, rather than controlling access to money, a more appropriate method would be to be vigilant and express our displeasure over the beneficiary’s unhealthy financial habits.
Most of our money matters are private and don’t need to be shared or discussed with others. But some aren’t, and it is worth knowing what is private and what isn’t. People resort to lies and deceptions to hide certain of their unhealthy financial behaviours and their harmful aftereffects. Many are inclined to hide financial behaviours considered bad or dishonest by society.
People keep money secrets largely due to the fear of the negative consequences likely to be unleashed once the secret information is made public. Hidden credit cards, debt-fuelled spending, hidden savings, speculative investments, gambling, and lending without consent are generally observed money secrets.
Most money secrets begin as tiny transgressions, which the perpetrators hope to rectify soon. However, as time passes, rather than diminishing, the small transgressions have ballooned such that publicising them now might invite damaging, punitive consequences.
Perennial stress and isolation are money secrets’ aftereffects. They destroy trust in relationships. The possibility of hurting the feelings of our close ones is also a driving factor behind the decision to keep money secrets. But this is ludicrous because the isolation and distance that money secrets breed only harm the close relationships that we are protective of.
In other words, our protective intentions to keep money secrets are ineffective in purpose – they are more likely to be harmful than protective. Like all other unhealthy financial behaviours that we saw earlier, there are serious emotional factors underlying our tendency to lie and deceive to hide money matters: envy, guilt, and shame, all play spoilsport in varying permutations.
People desire themselves to be perceived as successful by society. If they consider their present status as unsuccessful, the associated shame will compel them to project an image of success through overspending. That might get them into serious debt, which had to be kept under wraps to maintain their illusory success.
People with gambling addiction might maintain secret savings to finance their secret indulgence to avoid the societal disrepute associated with gambling. If your financial means far exceeds that of your peers, the guilt of having more than others, and the fear of the possibility of being rejected by peers, might compel you to lie about your true financial situation.
Although it might feel uncomfortable and counterintuitive at first instinct, transparency is the best antidote to the harms of money secrets – both for you and others. You don’t have to be transparent about all your money matters simultaneously. The first progressive step is acknowledging the insidious nature of money secrets, and later, we could work on gradually revealing the secret. This way we could at least regulate its adverse effect on others.
Stealing is another damaging financial behaviour. Stealing is taking what isn’t ours, or the urge to take. Even if one has never stolen so far in his life, carrying the desire to steal itself damages our well-being. Some are addicted to stealing and can’t resist the impulse to steal, even if they don’t derive any economic benefit from it.
Economic hardship is the leading cause of most of the stealing incidents. Some steal for the sheer thrill it provides – they feel alive when they do it. Maybe an excruciating boredom compelled those people to seek thrill in such noxious ways. However, an inclination to steal has been observed even among financially well-off people: they don’t crave worldly pleasures; they are neither addicted nor bored.
According to Vicky Reynal, the financial psychotherapist, these people seek redemption, rebellion, or retaliation through stealing. A person might steal or greatly desire to steal if he feels guilty about being financially better off than his peers. Unconsciously, he intends to get caught and punished, thus, achieving redemption from the sin of being financially well-off.
Stealing might be chosen to rebel against parents or other authorities who exert unwarranted power and control over others. People might resort to stealing if they believe they were unfairly treated in the past and are thus entitled to more than they have now. This feeling of entitlement originates from the anger at being unfairly treated.
Envy becomes a driving factor when a person steals from another, whom they are envious of, thereby diminishing the other person’s perceived wealth. Stealing could also be used to gain attention because it is so painful when no one pays attention to you, specifically when you are among many people.
Children of parents, who are emotionally distant or less engaging with their children, might steal to gain their parent’s attention. Lack of attention is so painful for those who don’t know how to deal with distressing feelings that they prefer negative attention over no attention at all. People who feel incredibly unwanted or with poor self-esteem feel some kind of pride in their stealing behaviour, and occasionally, they feel powerful among their peers.
Underneath all these harmful behaviours and their motivation lies a tendency to act out in a self-harming way because of our difficulty or inability to regulate or deal with our difficult emotions.
Everyone aspires to a better life, for which a steady and secure financial position is essential. However, instead of making the right financial choices and achieving financial well-being, we usually indulge in damaging financial behaviours causing much financial stress. Despite the best intentions, we get into precarious financial positions that limit our opportunities for a better future.
Why do we do this to ourselves?
Some are unaware of the damaging effects of their financial behaviours. Those who are aware of it and desperately desire to do something about it, however, don’t have any control over their unhealthy financial behaviours and, consequently, remain a mere spectator to their deteriorating financial conditions.
Anyone with a rudimentary education could easily achieve financial literacy. Therefore, blaming the lack of financial literacy for our damaging financial behaviours is unconvincing. The problem is that many are unwilling to take that small effort, because, unconsciously, they don’t want things to get better for them.
To overwhelm financial self-sabotage (financial behaviours that interfere with our success and well-being), firstly, we need to acknowledge, or at least entertain the possibility, that our actions (or inactions) might not be doing the right for us. In the book ‘Money on Your Mind’, Vicky Reynal, a leading financial psychotherapist, states three pre-dominant feelings that drive self-sabotage: guilt and shame; anger and resentment; and fear. In most situations, more than one feeling is at play.
You are likely to feel guilty about your financial success if you come from a religious or familial background where money is considered dirty or evil. You might mismanage your money through overspending or poor investment choices to free yourself from the emotional discomfort that follows financial success. Self-sabotage might be adopted to rebel against controlling, manipulative parents who always impose their will on you.
The anger and resentment bred and accumulated from such unhealthy relationships might find external expression in self-sabotage, a form of revenge for the unfair treatment. But you are wrong because self-sabotage is the worst form of revenge. If you are adamant about revenge, choose its best form: massive success.
Fear of separation, retaliation, and abandonment could compel us to choose the path of self-sabotage. Due to the fear of separation from their parents, people indulge in self-sabotaging financial behaviour to always stay financially dependent on their parents.
You fear some form of retaliation if you become more financially successful than your father or your tribe’s other senior members, and thus, try to avoid such situations through self-sabotage. If most people in your familiar and close relationships believe money is evil or dirty, you fear your financial success might cause them to abandon you.
Money is not evil because we are stressed about it or find it damaging to our health and relationships: it just means we don’t know how to deal with it. The first step in effectively dealing with money matters is developing financial emotional awareness – how we feel about and behave with money. Money is influential in the sense that just mere exposure to money is found to bring about a marked change in people’s behaviour, mostly in a negative way.
Financial emotional awareness reveals the uncomfortable feelings and motives behind most unhealthy financial behaviours. Financial well-being is not about having enough money to meet our financial needs or ensuring a promising retirement corpus. Financial well-being is feeling secure and in control of our financial situation, which, unfortunately, most aren’t.
Deciphering the emotional underpinnings behind our financial behaviours could help us achieve financial well-being. Shame, anger, guilt, and greed are the leading uncomfortable emotions or desires propelling much of our financial behaviours. However, such behaviours only result in misery and endanger our financial security and well-being.
For a desire for positive change to arise within us, we must first acknowledge that what we are doing with our money might not be right for us. We could then reflect on our unhealthy financial behaviour – whether underspending, overspending, greed, stealing, or hiding – to decipher the feelings and desires driving those behaviours.
Changing financial behaviours for the better means changing our attitudes towards money. What psychological factors prevent us from letting go of our unhealthy financial behaviours?
Avoiding or dodging the pain associated with the difficult feelings that arise within us is the only psychological benefit we derive from our damaging financial behaviours. Being open to sit with our uncomfortable feelings instead of acting them out could greatly diminish the attractiveness of our damaging financial behaviours.
Pain could be a harbinger for self-expansion. Whether we know it or not, we are dodging our progress when we dodge pain. The pain we experience conceals insights that could contribute to our well-being.
Pain surfaces when we face a situation about which we hold wrong beliefs. By resisting or dodging pain, we choose to hold onto our wrong beliefs. Resisting pain might provide an ego boost or temporary relief. But this way the pain accumulates in our minds and brings misery, gradually diminishing our well-being. To improve our well-being, the pain should be healed.
Pain happens when difficult feelings such as anger, anxiety, fear, shame, guilt, and envy arise within us: there may or may not be a trigger. Suppression, Expression, and Escape are the most common methods to deal with our difficult feelings. According to the psychiatrist, spiritual teacher, and author David Hawkins, all three methods are ineffective and are, at the same time, harmful to our long-term well-being by allowing negative feelings to accumulate within us.
Through suppression, we hold onto negative feelings that eventually cause us to be withdrawn, isolated, dull, and boring. It could hamper our creativity and imagination.
Through expression, we vent our difficult feelings on others or project them onto the outer world. When we express difficult feelings, the thoughts are like this: they are the cause; they are the problem, it’s them, it’s always them. The method of expression to deal with difficult feelings is also chosen when the difficult feelings can no longer be suppressed as we have reached the limit of our mental capacity to hold negative feelings.
The third and final route, the escape route, to deal with negative feelings is ubiquitous and conspicuous. The entire entertainment and pleasure industry feeds on it. We indulge in wide-ranging activities to take our mind off the negative emotions. Watching movies, drinking alcohol, taking drugs, social media addiction, overworking, too much socialising, too much reading, and excessive parenting are a few examples.
The renowned psychiatrist David Hawkins proposes a radically simple method for effectively dealing with difficult feelings and significantly improving well-being. It is called ‘Letting Go: The Path of Surrender’ which he details in his book by the same name:
Letting go involves being aware of a feeling, letting it come up, staying with it, and letting it run its course without wanting to make it different or do anything about it… It means simply to let the feeling be there and to focus on letting out the energy behind it…
Drop judgements and see it as just a feeling… The technique is to be with the feeling and surrender all efforts to modify it in any way… Let go of wanting to resist the feeling… It is resistance that keeps the feeling going…
A feeling that is not resisted will disappear as the energy behind it dissipates…
The ‘letting go’ method by David Hawkins resonates with the ‘financial emotional awareness’ and the ‘ability and willingness to sit out our uncomfortable feelings’ method suggested by the financial psychotherapist Vicky Reynal.
You deserve a wonderful life. You don’t have to earn it – it is your birthright. You have all the innate capacity for that within you. But what stands between you and that wonderful life is the wrong beliefs and negative feelings that past experiences might have instilled in you.
Money and wealth have a significant role in fulfilling that wonderful life. Money and Wealth are good. It opens opportunities for personal growth, good health, healthy relationships, and overall well-being. Money affords many enjoyments in life. Enjoying money is good. It is indulgence that is bad.
Through financial emotional awareness, understanding our relationship with money, being willing to sit with our uncomfortable feelings, using the ‘letting go’ method, and changing our attitude towards money we all can live the wonderful, fulfilling life that we rightly deserve.
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