It comes as no surprise that many of us have mixed feelings towards our finances. This is often because financial literacy is not commonly taught in schools. Once you start managing your personal finances independently, you may notice some emotional responses in relation to money. Managing money under ‘normal’ circumstances is already overwhelming as a beginner, and doing so in a pandemic may escalate anxiety in some of us.
The Emotional Psychology of Money
You may have noticed certain emotions are triggered depending on your financial situation—this can look like anxiety or stress around tax and holiday seasons. So how do we address and overcome our emotional psychology when it comes to money, especially during a pandemic?
Firstly, we need to address the reality of money in our lives and how it impacts us as emotional beings. In a podcast interview, Behavioral finance expert Michael Liersch advises us to accept that money is emotional. We can then address our financial wellbeing (or lack thereof) and slowly begin to normalize conversations around money in our lives.
Other than providing suggestions on how to efficiently spend money, Liersch stresses financial transparency and open communication about our finances with ourselves, loved ones and communities. If you find yourself at this stage of transparency or are intentionally working towards it, give yourself a pat on the back because you’re on the right track.
Overcoming Negative Emotions Around Money
If you’ve ever felt anxiety, uncertainty, shame or fear towards money, you are not alone. You may feel stuck in a paycheck-to-paycheck cycle or a debt cycle that does not allow you to move forward with your finances. Many of us struggle with the impacts of our finances and these emotions often show up during these cycles. Due to the pandemic, students working in artistic fields may also feel powerless due to its impact on their income.
Once you have accepted the reality of the pandemic and that you have an emotional relationship to money, you can begin noticing your emotional triggers. For instance, you may tend to spend more money on food or shopping when you are stressed or frustrated. Additionally, the lack of human connection many of us are experiencing during the pandemic may intensify these negative emotional tendencies we have around money. Learning to recognize your emotional triggers allows you to prepare yourself for when those emotions come up next. To disrupt this emotional pattern, consider and reevaluate your financial goals to remind yourself of actions you can take today to move closer to it. You can also incorporate this plan into your current emotional management practices, which may include meditation, physical activity or counselling.
Navigating Financially Uncertain Times
Its understandable to experience intensely good and bad days in the midst of a pandemic. There are days where you may feel better about your finances than others. Being action-oriented with your money is a good approach when you are feeling overwhelmed. Consider what steps you can take to get back on track or seek financial support where necessary and ensure your emergency fund is intact.
During this time, the lack of social activity is difficult for many of us. However, if you are able to, you may use this time to expand your knowledge on personal finance using resources like blogs and podcasts to support your financial wellbeing. It is completely understandable to feel unmotivated in this area of your life, but know that if you’re reading this, you’re already taking actions towards addressing your emotional relationship to your finances. If you are interested in more of this financial content or want to start engaging in it, the resource list below may be helpful to you.
If you found this article useful, check out these resources on managing financial wellbeing and behavioral finance during the pandemic: