The Emotion of Money: how the way you save and plan affects your lifestyle

 In Blogs

When you’re trying to do your job, pay your bills, and run your life, you may rarely step back to ponder the fact that the way you feel about money has profound impact on your ability to save, plan for the future, and devise your lifestyle. Money is a useful tool for paying for stuff we need, and therefore more of it would be even more useful.

Our attitude to this most basic understanding is an emotional weight that influences behaviour, decisions, and ultimately our overall wellbeing. However you look at it, the complex relationship that lies between emotion and finance can either empower or hinder your life and how your future will play out, especially with regard to your retirement savings.

The broad range of underlying psychological influences

  • Experience and expectation
    Our emotional attachment to money is often rooted in personal experiences, cultural influences, and the expectations of the society we identify with. For some, money symbolises security and success, while for others it may evoke anxiety or fear depending on our early introduction to money and the attitude of the people around us. Through this we form emotional attachments, and sometimes we have to delve quite far back to unravel the original web of emotions that shape our financial decisions as we grow older.
  • Outlook and saving habits
    The emotional connection to money plays a pivotal role in shaping our saving habits. Individuals who view money positively, associating it with security and opportunity, are more likely to adopt disciplined saving behaviours. However, those with negative emotional associations may struggle with saving, leading to impulsive spending or avoidance of financial planning altogether.
  • Fear of loss
    Sometimes no matter how much money is involved, an individual can fear money because its loss would be so traumatic. This anxiety can be so paralysing that it hinders the ability to make rational financial decisions. Individuals who harbour financial fears may avoid confronting their financial situation, leading to a lack of planning for the future. This avoidance can result in missed opportunities for investment, retirement planning, and overall financial stability.
  • The wobbly balance of confidence and carelessness
    On the flip side, a positive emotional relationship with money can empower individuals to take control of their financial destiny. Those who sensibly view money as a tool for personal and financial growth are more likely to engage in proactive saving, investment, and strategic planning. However, too much confidence may lead to a gung-ho approach, indicating impractical tactics, carelessness, and wild spending. Individuals with a positive emotional connection to money are more likely to be resilient and therefore able to bounce back from setbacks and view challenges as opportunities for growth even in the face of economic uncertainties.
  • Taking a positive view of financial planning
    Emotional attitudes will influence the effectiveness of financial planning. Individuals who approach financial planning with a positive mindset are more likely to set realistic goals, create budgets, and adhere to long-term strategies. However, if you have developed an erratic attitude to spending and saving, you may find that your instability leads to a financial crisis – in effect no planning, impulsive purchases, unsuitable decisions, and ultimately poor retirement funding.

Making choices that directly affect the quality of your life

All your hopes and dreams of how you would like to live your life are wrapped up in how we choose to handle our money, how we look to invest or save, and how we balance reality or build castles in the air. Poor choices lead to continuing stress and anxiety, negatively influencing mental and physical wellbeing; in a nutshell, limiting your ability to enjoy life. On the contrary, a healthy emotional relationship with money can provide the foundation for a balanced and fulfilling lifestyle that allows you to pursue your interests and aspirations without the constant burden of financial worry.

Why professional guidance should become your most important decision

Nurturing a healthy emotional connection to money is a transformative step towards achieving a more prosperous and balanced life. And the best people to assist you to do just this, are your financial advisors who can provide strategies to overcome emotional obstacles, make informed decisions and create sustainable plans for the future.

Empfin Solutions – the team that keeps your team happy

We’re an Old Mutual franchise with our primary focus on the three main areas of concern in everybody’s financial planning:

  • Your Company Benefits – advising on, and servicing umbrella pension and provident funds.
  • Your Personal Financial Planning and Provision – Estate planning, Wealth Creation and Retirement Planning.
  • Your Assets – motor and household insurance.

Always striving to be a trusted partner in facilitating financial solutions for organisations and individuals, our dedicated team of fully accredited, experienced professionals have a passion for satisfying customer needs and providing a truly client-centric service.

Find out how you can benefit at: www.empfinsolutions.co.za

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