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How Money Affects Our Emotions Thumbnail

How Money Affects Our Emotions

For those we are fortunate enough to work with, you may see my team and me as your financial group, money manager, financial planner, and maybe your money guru.  

All those titles fit, and I hope you agree that we are very good at our work. You may not realize that in addition to what we're known for, that makes all those other things possible. We work with you to help control your emotions about your money and the use of it. As Anthony, who heads up our analytics, among other things, often reminds me, “It’s not what we help you do; it’s what we keep you from doing” that is most valuable. 

Each week, in a meeting or over the phone with a client, we are asked everything from the benign: 

  • I want to get out of the market; this (you fill in the blank) is different. 

To the aggressive: 

  • I want to put all my money in the market, a certain stock, or cryptocurrency. 

To the conspiracy-driven: 

  • Should I convert all my money to gold bars and keep them in my basement? 

I hope you're smiling right now and not thinking I have broken our confidentiality agreement. No names were used to protect the innocent. 

The questions we are asked by you need to be answered logically and respectfully. In each of those examples, we will talk about why making one of these decisions is not in their best interest. Anthony, once again, is correct. One of the things that brings you value is our willingness to question your request in order to ensure your financial journey will be as smooth and with as few regrets as possible.   

Today, I want to give you some ideas on what it can be like to feel emotionally, so the next time you begin to feel anxious, depressed, or worried about your money, you will have some tools to help you understand what is taking place and how to better cope with these concerns. 

I just finished a book where money was referred to as a gateway. A gateway to helping others, to creating memories, and to living the life we choose. 

Money also buys groceries, pays utility bills, and covers our rent or mortgage. Money is not just a neutral medium of exchange; it also has a powerful impact on our emotions, our well-being, and our relationships. 

The Psychology of Money 

Money can evoke different emotions depending on how we perceive it, how we use it, and how we compare it with others. Money can trigger: 

  • Happiness: Money can make us happy when we feel that we have enough of it to meet our needs and wants, when we spend it on meaningful experiences or causes, or when we share it with others. 
  • Anxiety: Money can cause us anxiety when we worry about not having enough of it, when we face financial difficulties or uncertainties, or when we feel pressured to keep up with others. 
  • Guilt: Money can induce guilt when we feel that we have too much of it, when we spend it on frivolous things, or when we do not use it wisely or generously. 
  • Pride: Money can boost our pride when we earn it through hard work or achievement, when we manage it well, or when we use it to improve our status or reputation. 
  • Envy: Money can spark envy when we compare ourselves with others who have more of it, when we feel that they don't deserve it, or when we covet what they have. 

The Effects of Money on Our Well-Being 

Money can affect our well-being in positive or negative ways, depending on how we balance its benefits and costs. Some of the effects of money on our well-being are: 

  • Satisfaction: Money can increase our satisfaction when it helps us fulfill our basic needs, such as food, shelter, health, and security, as well as our higher needs, such as autonomy, competence, and relatedness. 
  • Happiness: Money can enhance our happiness when it allows us to pursue our passions, hobbies, and interests, to have positive experiences and memories, and to express our values and identity. 
  • Stress: Money can reduce our stress when it provides us with a sense of control, stability, and security and when it enables us to cope with challenges and emergencies. 
  • Depression: Money can contribute to our depression when it creates a sense of inadequacy, inferiority, or hopelessness and when it isolates us from others or prevents us from fulfilling our potential. 

The Influence of Money on Our Relationships 

Money can influence our relationships in constructive or destructive ways, depending on how we communicate and cooperate with others about it. Some of the ways that money can influence our relationships are: 

  • Trust: Money can foster trust when we are honest and transparent about our financial situation, goals, and preferences, and when we respect and support each other's choices and needs. 
  • Love: Money can strengthen love when we use it to show our affection, appreciation, and commitment and when we share it with our partner or family in a fair and equitable way. 
  • Conflict: Money can cause conflict when we have different values, beliefs, or expectations about it, when we disagree or argue about how to spend, save, or invest it, or when we hide or lie about it. 
  • Resentment: Money can generate resentment when we feel that our partner or family is taking advantage of us, exploiting us, or controlling us with money, or when we feel that they are not contributing enough or spending too much. 

Some Tips for Managing Money and Emotions:

  • Start with a budget. One of the first steps to managing your money and the emotions surrounding it is to create a budget that reflects your income, expenses, savings, and goals. A budget can help you track your spending habits, identify areas where you can save or invest, and plan for the future3. 
  • Get comfortable being uncomfortable. A budget is not a fixed and rigid plan you must follow strictly. It is a flexible and adaptable tool that you can adjust according to your changing needs and circumstances. Sometimes, you may have to make difficult or uncomfortable decisions about your money, such as cutting back on some expenses, taking on extra work, or asking for help. These decisions may trigger negative emotions, such as anxiety, guilt, or shame, but they are also opportunities to learn and grow3. 
  • Ask questions and understand your finances. Money can be a complex and confusing topic, especially if you are not familiar with the terms and concepts involved. If you feel overwhelmed or intimidated by money matters, do not hesitate to ask questions and seek advice from experts, such as financial planners, accountants, or counselors. You can also educate yourself by reading books, articles, blogs, or podcasts about money management. The more you understand your finances, the more confident and empowered you will feel3 6. 
  • Check in and update your goals. Money is not an end but a means to it. It is important to have a clear and realistic vision of what you want to achieve with your money, whether buying a home, starting a business, traveling the world, or retiring comfortably. Goals can motivate you to save and invest your money wisely and celebrate your progress and achievements. However, your goals may change depending on your life stage, circumstances, and preferences. Therefore, it is essential to review and update your goals regularly and to adjust your budget accordingly3. 
  • Use money to enhance your happiness. Money can increase your happiness when you use it in ways that align with your values, interests, and personality. Research has shown that spending money on experiences, such as traveling, learning, or socializing, can bring more happiness than spending money on material things, such as clothes, gadgets, or furniture. Similarly, spending money on others, such as donating to a cause, giving a gift, or treating a friend, can boost your happiness more than spending money on yourself. Moreover, spending money on things that improve your well-being, such as health, education, or hobbies, can also enhance your happiness1 2 5. 
  • Communicate and cooperate with others about money. Money can influence your relationships in positive or negative ways, depending on how you communicate and cooperate with others about it. Money can foster trust, love, and harmony when you are honest and transparent about your financial situation, goals, and preferences, and when you respect and support each other's choices and needs. Money can also cause conflict, resentment, and stress when you have different values, beliefs, or expectations about money, when you disagree or argue about how to spend, save, or invest it, or when you hide or lie about it. Therefore, it is important to have open and respectful conversations about money with your partner, family, or friends and to find a balance between your individual and shared financial interests2 4. 


Money is not just a material object; it is also a psychological and social phenomenon that affects our emotions, our well-being, and our relationships. Money can be a source of joy or sorrow, of harmony or discord, of growth or decline, depending on how we perceive it, how we use it, and how we compare it with others.  

It is important to be aware of the emotional impact of money on us and others and to use it wisely and responsibly in a way that enhances our happiness and well-being and fosters our trust and love. 

Like the doctor says, eat better, exercise, and get more sleep, and you should be fine. Easy to say, hard to do. If you are like me, you do better when you have a trusted advisor who is available to answer your questions. You do better when you have a coach trained to guide you when things need some work. You do better when you are fortunate enough to have that person who has your best interests in mind, who wants to make sure you succeed, and who just listens to what you have to say. 

Reach out to us. We can get you headed down a road that will work for you. If you are already heading down that road, let’s see if there is an even better path. 

Go ahead and have the doughnut, but maybe keep it to only one. I hope your holiday season is peaceful and you are able to enjoy it just the way you want. 

Warmest regards, 




1. How emotions play a role in money management - Financial insights for ... 

2. Why Are We So Emotional about Money? - Harvard Business Review 

3. Why Managing Your Money Starts With Your Emotions 

4. 7 Tips About Money and Emotions | Psychology Today 

5. Money Stress: How to Avoid It and Manage It - Psych Central 

6. Organizing your finances - Mind