Don’t lose your head
Managing money starts with your emotions
Money can trigger strong emotional reactions, which can lead to not-so-great decisions. A raft of new books urges savers to explore their emotional connections to money in order to make better financial decisions.
“Eighty-five or 90% of our money decisions are based on our emotions,” says Bari Tessler, a financial therapist in Boulder, Colorado, and author of “The
Art of Money Workbook,” out this month.
1 Consider your own money story
When Los Angelesbased author and producer Rebecca Walker started soliciting stories for her essay collection “Women Talk Money: Breaking the Taboo,” she discovered that many people felt shame for having money, guilt over having more than their parents, and regret over earlier financial decisions.
Walker encourages readers to explore their own money stories — those experiences that influenced how they think about money. “I want them to find at least one story that they’re holding onto about money, one memory or fundamental idea that has been shaping their lives about abundance or scarcity, and go from there. How do you want to change that story now?” 2 Reflect on recent money experiences In her book,
Tessler encourages readers to think about their last three money interactions. “When you were checking out at the grocery store or exchanging money for goods or services in some other way, what emotions popped up?” she asks.
Shame, anger, fear, guilt, joy, sadness and happiness are common reactions. “Maybe it’s reminding you of a past money mistake you made. Let’s bring some awareness and understanding to it,” she says. In
her book, “Finance for the People,” Los Angeles-based financial educator and musician Paco de Leon suggests creating a list of strategies that help you calm down and using them before making a big financial decision. She lists ideas like going for a walk or reading a book.
3 Find calming techniques 4 Forgive past mistakes
Self-compassion is a powerful tool, says Michael G. Thomas Jr., an Athens, Georgia-based financial counselor and founder of Modom Solutions, a financial coaching platform. Forgiving ourselves for past mistakes can help us move forward. In her book, Walker writes about forgiving herself for earlier choices to splurge on purchases instead of learning how to invest. “I let go of the idea that I did this terrible thing and extended compassion to myself, which was liberating,” she says.
This article was provided to The Associated Press by the personal finance website NerdWallet. Want to suggest a personal finance topic that Quick Fix can address? Email apmoney@ap.org.