money and emotionsI suffer from migraines.

It is often difficult to determine what is causing a migraine. They are often caused by many triggers, and not the same ones each time.
It took me over 15 years to figure out what the cause of my migraines.
Recently I uncovered a “new” trigger – allergies.  I always knew that I had allergies. I also knew that they could play into my migraines. But I never acknowledged exactly how much they played a role in them.
By now you are wondering exactly what this has to do with money. Other than reducing the costs of my migraine medicine.
How you manage your money has a trigger of its own that can cause pain. 
This trigger is with us all the time but most of us do not acknowledge that it has an impact on our money.
This trigger is your emotions.
Because personal finance is personal means that your emotions will have an impact on your money
When I have had a rough day and still have to face the prospect of putting a meal on the table many times my emotions take over. Instead of the wise move to save money and eat at home, I choose to get take out or go out. 
Even if my dining out budget out for the month  My emotions take over and I can see no other option.
This is an emotional decision that impacts my finances.  Pile a bunch of these together and they can start to wreck havoc on your money!
Your big financial decisions affected by emotion can be even more detrimental to your finances than the weekly pizza run
Buying a car is one of those big purchases that has emotion swirling around.  You may motivated to drive a better car than a relative. Maybe you are sick of repairs. Or you feel the need for a new car because you want to look like a successful business owner.
Instead of figuring out exactly how much you can afford. Or better yet saving for a few months and paying cash you run out and buy the first shiny new car you like. 
This can throw your finances off for years. 
So how do you stay aware of and control your emotions when you it comes to your money?
I recommend four steps when your money and emotions are involved.

Allow Extra Time

Allow yourself extra time to make a decision.  This is especially important the bigger the decision is. 
During this time figure out how to make a good decision while still meeting your needs and/or wants. 
Ways that you can make better decisions include:
  • Creating a pros and cons list
  • Ask for advice from someone you trust
  • Sleep on it – it is amazing how decisions get easier after sleep.
Don’t rush into the decisions as this is when stress and other emotions can trump logic.  It is okay to say I need more time.

Ask Why You Are Doing It

 Ask yourself why you are doing something. 
This is a great question to get to the heart of what emotion might be driving your decision making process.  Sometimes it takes asking many whys before you arrive at the true problem. 
Keep drilling down and you can uncover some interesting motivators.
For example with the new car. Why do you want it? Is it because it has been four years? Then follow up that answer with “why is four years critical for a new car?” Then keep going till you have a solid answer.

What is Your Physical Reaction

Watch your physical reaction to events.  Your body is a great indicator that something is wrong or if you are being emotionally driven. 
If my heart is racing when making a decision I know to stop, calm down and figure out what is at the source of this reaction. 
It can also be a sudden mood change that triggers an alert that you might be deciding with your emotions.  Be aware of what your subconscious is trying to tell you through your body. 
Listen to your gut!

Emotions and Money are Here to Stay

You cannot remove emotion from your financial decisions.
You should not try to completely remove them as this leads to heartless decisions.  But you do need to know how your emotions are impacting your decision, so if necessary you can rein them in. 
Know what is motivating you and then make an educated decision.
Emotions drive many of our financial decisions.  Take the time to stop and understand what these emotions are. This will improve your financial decisions.