How to Manage Your Emotions to Make Smarter Financial Choices

April 22, 2024
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The best time to start was yesterday; the second best time is now. When it comes to money, let’s be real—it’s as much about our hearts and minds as it is about our wallets. Many of us feel the pinch of financial pressure, but did you know that the first step towards managing your finances better is simply understanding the role emotions play? Whether you’re making ends meet or ready to start your financial freedom journey, recognizing the emotional ties to your money can change the game. 

Understanding the emotions behind the money

Money isn’t just dollars and cents; it’s security, freedom, and sometimes a bit of worry. Feeling stressed or anxious about money is normal. But let’s not let those feelings steer your financial decision. Recognizing that these emotions are natural is key to taking back control. Remember, your bank balance doesn’t measure your value. 

Changing the way you see money

Start Where You Are

Let’s keep it real about where you’re at financially. No judgments, just the facts. Be honest with yourself. What does financial independence mean for you, and what will it take to get there?

Set Achievable Goals

Wealth doesn’t happen overnight (unless you win a lottery!). Saving a fortune takes time, and it may seem overwhelming. Breaking it down into smaller, more manageable goals will make it easier to reach

Make a Budget That Makes Sense for You

Budgeting is about more than just cutting out all the fun. It’s about figuring out what really matters to you and making sure you can afford those joys without the guilt.

Spot Emotional Spending Traps

Have you ever found yourself buying things when you’re stressed or bored? Keeping track of when and why you spend can help you avoid those traps and find better coping methods. Knowing what primary and secondary necessities are can help you prioritize your spending habits. Giving yourself enough time to make major financial decisions can result in better outcomes.

Tools to make managing money easier

Automate to Accumulate

Setting up automatic savings can make your life a lot easier. It’s like making your future self a priority without even thinking about it. Even saving a small amount of money each week can make a big difference. For example, if you save just one dollar a day, which is only $30 per month, you’ll end the year with $360 in savings. And if you save $2 or $5 a day, you’ll have even more saved up by the end of the year, which could be up to $600. So, it’s worth it to start saving each week! Joola is designed specifically for this! Create a group where you can save money by yourself or with friends and set aside $ monthly. 

Learn as You Go

The more you know, the better you’ll feel about your decisions. There are tons of resources, from podcasts to blogs about money management. If you need help figuring out where to start, some books we enjoy are The Simple Ways to Wealth, Broke Millennial, Rich AF, and I Will Teach You To Be Rich.

Chat with a pro or tap into your community

Sometimes, a little expert advice can go a long way. Don’t shy away from chatting with a financial advisor if you feel stuck. Or, find a community that can help motivate you and give you advice. Saving money can feel like a tedious and mundane task. It requires a lot of effort to stay consistent. However, it can be easier if you have a group of friends who are also trying to save money. Just like gym buddies, having financial accountability partners can help you stay motivated. You can use an app like Joola to share accountability with your friends and motivate each other to save more money.

It’s never too late to start

Transforming your finances is a journey, and like any good road trip, it’s all about the playlist and the pit stops—you learn, adjust, and keep moving forward. Knowing that your journey is unique, understanding your emotions around money, and finding ways to manage them can make a difference. So, why not start today? Taking control of your financial future is not just possible; it will feel great.