Could emotional intelligence affect your finances? If you’ve ever gone out to buy milk and come home with a new car that’s probably the influence of emotional intelligence (EI), a force that guides many of our purchasing decisions.
EI measures emotional self-awareness and the ability to control it. Experts say higher emotional intelligence points to a better relationship with money and a greater sense of self-worth.
Emotion and money
If your view of money stems from negative emotions – like anxiety or fear – harmful financial habits may follow. These ideas usually develop early, when your parents may have shared their own ideas of money.
Regardless of your money view, your financial health plays an important role in your life. Money can provide freedom, security and safety. A lack of money can leave you feeling anxious or frustrated.
Improve EI
Recognizing money woes or admitting financial irresponsibility is the start of building better EI. Psychologists also recommend the following for improving EI:
- Don’t ignore hints of financial peril, like poor credit scores, calls from collections agencies or other signs.
- Don’t lapse back into unhealthy financial behavior. Patterns are still familiar and comfortable despite the damage they may cause.
- Do stay aware of charges, bank balances and other financial data that help you focus on your finances.
- Do create a plan with goals. This will help reduce the intensity of an emotional reaction to money.
Better EI equals better everything
Experts say that increasing EI helps you stay aware of your behaviors and helps you align those behaviors with your goals. Improving EI also can help you avoid buyer’s remorse today and achieve your financial goals tomorrow.
And that may leave your biggest decision as to whether you buy whole or skim milk.
The advice provided is for informational purposes only. Contact a financial advisor for additional guidance.