finances, money, spending, aarp, girlfriend
Gracia Lam
Gracia Lam
Money

Are Your Feelings Sabotaging Your Finances?

The first step is to identify them.

It’s the week before your period—prime time for PMS. The person you’ve been dating breaks up with you out of nowhere. Now you’re even more on edge. You’re angry. You’re sad. And you’re hungry. (Why are we always so hungry?!) So, what do you do? Well, maybe you shop. All of these emotions—anger, sadness and hunger—all driven by your hormones (and exacerbated by your now ex) have created a perfect storm for your finances and proven to make you spend more money.

First, let’s talk about the hormones. It's not that you can draw a straight line to spending more, because you’re having your period. It’s a little more circuitous than that. When your estrogen and progesterone levels drop right before your cycle, it can create a breeding ground for negativity. When you’re feeling sad (down, moody, however you want to describe it), your brain encourages you to buy just about anything to make you happy again. When you’re feeling angry, you become more hopeful or confident, and you’re more likely to take risks with your money. That can lead to spending impulsively as well.As for hunger, which is triggered by the hormone ghrelin, there’s a part of your brain that’s particularly active: the reward pathway. When you eat, your brain rewards you with the feel-good hormone dopamine. Hunger can simply make us want more stuff — more of everything. This is why our mothers always told us never to shop on an empty stomach. It’s also why when you’re shopping hungry at Costco and you have a sample, you simply want more — not just more of what you buy, but more of everything. It’s why when you’re loading up on Ziploc baggies and paper towels, stopping by the crab salad can lead to coming home with a tent. Even if you don’t camp (true story).

The fact that money is emotional is something I dig into in my new book,Women with Money: The Judgment-Free Guide to Creating the Joyful, Less Stressed, Purposeful (and, Yes, Rich) Life You Deserve,”because unless we get a handle on our emotions, it’s tough to use our money as effectively as we should be. Here’s how to manage:

Identify the trigger. The first step to keeping your feelings from sabotaging your finances is to identify them. Are you angry? Scared? Guilty? As they all have the ability to impact our behavior with money, we’re going to consider them all triggers. A quick 101 on emotions, feelings and moods: Emotions are immediate physical responses — in the brain and the body — to what’s happening in the moment. Emotions bring on feelings, which are our mental and physical reactions to emotions. Emotions are fleeting, feelings last longer — but not as long as moods, which are based on things beyond emotions and feelings, such as the weather, the light, our health and our sleep.

Give yourself permission to feel, but not act. Acknowledge the feeling and tell yourself it’s OK to feel this way. We’ve been told to think logically about money and take emotions out of it. Now we know this isn’t possible. (It’s not just that our hormones hold us back, it’s also the way we’re wired. Researchers have used MRIs to look at our brains in the process of making choices about money by flashing images of things we want and charting the activity in our heads. So when you see those turquoise waters and 1,000-calorie piña coladas, the pleasure center in your brain lights up. And when you book the ticket, again, you get a rush of that feel-good dopamine. The problem is, if you ask people to wait for the reward, it’s very difficult to bring about the same sort of brain reaction. And things that are far off in the future — like owning a home in the Bahamas for your retirement — don’t light up your brain at all.)

What we can do is take a look at the underlying need that we’re meeting with our financial strategies, and then see whether it’s a healthy strategy to meet that need. For example, let’s say the Bahamas trip is really out of budget, and what you’re looking for is comfort from your friend. A girls’ night in could accomplish the same thing for much less (and you can budget for more wine).

Slow it down.Remember the difference between emotions, feelings and moods is largely based on time. And it’s the emotions that drive us to act. So once you become aware of the fact that your emotional brain is driving many — if not most — of your behaviors, then you can build in a little time between the emotion and the action. And the fact that the emotion will have subsided during that time will often result in not taking the action at all.

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finances, money, spending, aarp, girlfriend
Gracia Lam