Manage Your Money Emotions using Financial Literacy Book
It’s really true that people have a deep emotional connection with money matters. Our emotional relationships with money are what the National Financial Educators Council calls “financial psychology.” Just like going to a therapist or buying a self-help text to help deal with our emotions around interpersonal relationships, we can study a financial literacy book to help us control our emotional reaction to money.
We’re not all created equal when it comes to money emotions. Thinking about financial issues might leave different people feeling scared, worried, excited, restless, motivated, or stressed out. But regardless of what the emotions are, a personal finance book will urge us to keep those emotions in check before we make important money decisions.
Financial decisions should be made for the right reasons. That means we need to avoid hasty emotional reactions that may have negative outcomes. Financial literacy books caution us to use logic, rather than emotion, to guide important decisions about our money.
The most common emotions that become involved in our money decisions, the NFEC says, are fear and greed. If we constantly want more money, we become greedy and may take risky gambles that lead to disaster. On the other hand, unwarranted fear of losing money can get in the way of taking advantage of important opportunities. Learning how to identify our personal emotional connections with money and how those emotions affect our decisions is a key piece of the NFEC’s financial literacy lesson plans, books, and online resources.
To help lessen the risk of acting from an emotional standpoint, the NFEC recommends taking an online financial literacy quiz to assess your current level of financial knowledge. It’s important to have a high level of knowledge to guide all your decisions, especially investment decisions. They suggest stress-reducing activities like exercise, meditation, prayer, and deep breathing to help reduce the emotional impact money has on our individual psyches.