You might think that your emotional state of mind is more the subject matter for a therapist to discuss rather than a financial advisor but my experience tells me otherwise. Your feelings have a huge impact on how you spend, save and invest. Those activities in turn shape your financial future. Do your feelings have dollar signs attached to them? You better believe they do.
When we’re giddy, we can spend too freely without really thinking it through. We can also take unwarranted risks with our investments if we feel on top of the world. Conversely, if we feel down and out, we might try to spend our way out of it or invest in something “exciting” in order to give ourselves a little jolt. Does any of this resonate with you? It does with me because I’ve been guilty of all the above and paid the price for it.
How To Stop Medicating With Money
In my experience the easiest way to quarantine this problem is to implement these four steps:
1. Admit The Truth
In order to solve a problem we have to recognize it first. I suggest you take the time to jot down a few instances when you tried to use money to change how you were feeling or when you used money differently because you were feeling a certain way. Write down what you did and what the result was. This is a hard habit to break and you have a much higher likelihood of ending this cycle if you understand how devastatingly expensive it can be.
2. Talk and Write About Your Feelings
People “act out” their feelings with money because they don’t express them in other ways. Change that by writing down your feelings and talking about them too. Once you do you’ll feel that urge to medicate with money dissipate quickly.
3. Create A Financial Plan
Once you go through the effort of creating a financial plan that includes a budget, you’ll be far less likely to deviate from the path just because it tickles your fancy to do so. The reason? Your plan gives you perspective. You can easily see how a money mistake you make today impacts your future. As a result you will be far less likely to do it.
4. Accountability
Having accountability is what puts the cork in the bottle. It’s pretty easy to do silly things when nobody is watching. But if you have a mentor or partner to check in with, it’s going to be a lot harder to do something dumb. I’ve had an accountability partner for more than 10 years. I haven’t been immune from making mistakes. But I make a lot fewer thanks to my commitment to checking in before making major financial decisions.
The holidays are just about here. That gives rise to all kinds of feelings and they change quickly. That opens the door for all kinds of money mishaps to happen unless you neutralize and keep your feelings out of the money equation.
Are you going to use any of these tools? Have you ever tripped yourself up with a money decision because of your feelings at the time? What happened? How did you remedy the situation?
Mark says
November 22, 2014 at 10:26 AMI admit I have a pizza problem, and consequently a minor money problem. It just makes me feel so much better when I’m having a bad day, so I have historically justified the expense. While this may not be a serious problem, accountability partners are huge! If I tell me wife I’m only going to get pizza x number of times in a month (or spend x number of $ on it) , it’s a lot easier to stick to that plan.
Neal Frankle, CFP ® says
November 30, 2014 at 12:12 AMAwesome Mark! Do you tell her? Does it work? For me, it’s better to work with a buddy than my wife. But it doesn’t really matter. What matters is that we have accountability. Thanks!
Financial Samurai says
November 19, 2009 at 5:56 AMNeal – Thanks for sharing! I have to imagine that the older we men get, the more pressure we have from others to portray a solid state of leadership and poise.
It’s hard for manly men to cry. The only times I cry is during sports actually….. not when my team loses to a last second miracle 3 ball, but when I see inspirational stories of people who’ve overcome disability to play again. I feel better afterwards, it’s rejuvenating! Just don’t tell anybody.
You’re right. Writing is cathartic!
Neal says
November 19, 2009 at 7:41 AMYour secret is safe with me Sam. Now… pass the Kleenex…
Neal Frankle says
November 18, 2009 at 9:19 PMFirst, thanks everyone. I get the feeling that just by your comments, you are makng it “ok” for others to spend some time not being “ok” so I really appreciate it.
Rob #5 – I have to admit you make an excellent point and I can see how faith could work in the way you’ve described. My personal experience however is much different.
My relationship w/G-d was helped me, maybe for the first time in my life, to be much more present. It has also given me more strength to believe that things pass.
That’s been my experience anyway.
Justin, thanks for airing this out. You are a very bright young man (I happen to know this personally) and you’ll figure it out.
My experience is that writing about it and sharing is the first step in that process. Bravo!
Debra says
November 18, 2009 at 7:47 PMGreat post.
We would not have any great literature or poetry if everyone buried their feelings. It’s a shame that Americans think you should take pills if you’re not happy all the time.
Abigail says
November 18, 2009 at 7:18 PMI’ve struggled with depression for most of my life, so I’m acutely aware of how not-okay it is in this society to be… well… not okay.
At this point, I’ve gotten sick of most of the social edicts around happiness. It’s kind of freeing.
If I feel down, I don’t try to buy my way out of it. I just do something comforting, like curl up on the couch and watch TV or read. I accept that, that day, I probably won’t be very happy.
Of course, if the unhappiness is severe or goes on too long, then I have to examine it and figure out how to cope.
But if we could all just accept that there’s a difference between sad and not-happy… I think a lot of time, energy, sanity and money would be saved.
Rob Bennett says
November 18, 2009 at 11:16 AMI think this is in part a God issue. If you believe in God, your focus is not on happiness in the here and now. So you don’t worry so much about acknowledging that you are not entirely happy in the here and now.
Paradoxically, being able to admit to yourself that you are not entirely happy often generates the insights you need to becomehappy. But not making happiness the goal, it becomes easier to achieve happiness. It is by giving up your life that you are able to find it.
Rob
Justin says
November 18, 2009 at 9:38 AMThis is often a struggle for me. Right now I Have a job that pays decently, I am practically in charge of my daily activities at work, my only boss is really the owner, and he has trust in what I do, All sounds great right? Well, I am a Marketing Manager, I do marketing for a company in an industry i really just don’t care to much about. My job relys greatly on a marketing budget, i don’t care how good you are, its hard to be competitive and market a retail store with little to no budget when competition is spending like there is no tomorrow.
I go home and say, I want a new job, but just think about how many people out there have no jobs…
So, I started to do something to fix the situation, A friend of mine came to me and asked him to help with his startup company, doing internet marketing. Its something I normally enjoy, and think it is a great opportunity. However, It has added a lot of stress to my life right now and only made things harder. Working full time, then coming home and working even more appears to simply be to much for me. Another large part of my dilemma is confidence and training. I went to college and have my degree in Marketing, I trained for 6 months with a marketing agency as an intern. I have now been doing marketing for Power Sports for about a year. All great experience, but i have never really been an apprentice, never been a marketing assistant, never really learned marketing and internet marketing on the job. Everything I do daily right now, is done because that is all I know, I dont have anyone for guidance, and at this early stage in my career, it is something I miss greatly. Do I need it? I dont know, would it be a nice cushion? Yes!
If this post is a bit off subject, it is at the least my way of helping deal with the troubling aspects of life, for me, right now.
Susan D. says
November 18, 2009 at 7:38 AMWhat a wonderfull and thoughtful concept. Imagine…people dealing with their problems instead of taking a pill to fix life’s consequences. I become so weary of seeing people on rafts of medications to make them happy. When did we loose our ability to cope? So many people are diagnosed with mental illness when maybe it is really just the highs and lows of living life. Life’s experiences, the good and the bad make people rich and insightful. Dulling the pain only makes you weak.
Joel says
November 18, 2009 at 7:17 AMA really compelling post. That’s why I like this blog so much — it’s so much beyond just “Here is what you should do with your money.”
I wonder if the “I should be happy all the time, but I’m not, so something is wrong with me” mentality is uniquely American. Maybe it’s no accident that the word that captures being kind of blue/lethargic is French: “Ennui.”
I don’t mean to imply Europeans have all of the answers, but it does seem like Americans put a lot of emphasis on being trouble-free, when clearly that’s an impossible goal.
Also, I’m sure you know that one of the primary tenets of Buddhism is “Life is suffering.” So if you accept that, maybe you can accept feeling down, and then go from there.
Ken says
November 18, 2009 at 5:15 AMI think someone has to admit they have a problem before they can address it. Finding an outlet for problems or difficulties is important. If you don’t admit a problem, it won’t go away. We all need to get help when we need it. Deciding not to can postpone recovery and learning a new way to cope with or address a problem. We all need support and help with things in our lives.