How To Manage Your Emotions About Money

Category: Lifestyle

Whether it’s anger, anxiety, jealousy or extreme excitement, we have a whole rainbow of emotional reactions to our financial situations. Here is an outline of how you can take a step back and gain a calmer, clearer perspective



Whether it’s a little irritation that the supermarket ‘deal’ you’ve just seen is a blatant rip off compared to usual prices, or outright rage when someone cheats you, refuses to pay you or causes you to lose a serious amount of money, there are many moments in life when finances can spark anger.


The irony is that when we’re feeling angry, we tend to make knee-jerk decisions which cause us to lose time and money. For example, you might cut off all contact with someone who refuses to pay you rather than agree a gradual payment plan, or unwise investments. A great deal of solid psychological research supports the idea that we are more likely to take greater risks when angry than when we are calm.


Manage it: Anger is a very physiological response and you can help yourself to feel calm with two very simple techniques.


The first is a simple breathing exercise:

  1. Inhale for a count of four.
  2. Hold for a count of four.
  3. Exhale for a count of four.
  4. Wait for a count of four.
  5. Repeat until you feel calm again.


Another simple technique is top to toe body relaxation. Starting at your head and working down to your toes breath slowly and steadily and tense, then relax the muscles of your body.


After this, discussing the situation with a more calm and objective third party can help you gain valuable perspective before you act.




Anxiety is an extremely common emotion which many people feel in relation to finances, whether it is concern about their ongoing financial security or worry about how a particular investment is performing currently.

It is an unhelpful emotion as studies reveal that you are more likely to exaggerate risks when making financial decisions when you are feeling fearful and anxious. Another very common scenario is avoidance — whether that be avoidance of bills and letters about debt, or avoidance of discussing a poorly performing investment and taking action to address it.


In the initial grip of anxiety, the above breathing and relaxation technique can help. After that and ongoing, there are two key steps to take.


Firstly separate Fact and Fiction

It’s easy to let your thoughts spiral and to dramatize consequences when feeling anxious. Talk to someone, ideally your Serenity Financial Adviser and establish what the actual facts are as opposed to the worst case scenarios are which you have probably been envisioning.


Step two: Make a plan

Again, your adviser can help you hear to make a clear plan with step by step actions and timescales. This will help you to feel more in control and able to cope with the situation. For example, if you’re worried about job security, could you boost your savings in case layoffs happen.




Of course not all emotions about money are negative. If you win a large amount or gain an unexpected inheritance for example, it’s likely you’ll feel happy and excited. However, once again, our emotions can alter our usual sense of financial judgement. It’s very common for people winning large amounts of money, for example, to overestimate how much they have to spend and to end up in debt because we tend to spend more money when we are excited.


Two simple steps to managing your money if you’re feeling excited are as follows:


Set yourself spending limits, perhaps per week or month and leave yourself a cushion.


Put some money aside in a ‘big spend’ account, in case you have a particular event or item you want to buy. Don’t go over that limit if you want to treat yourself and that way, if you want to splash out you can do so safe in the knowledge that you won’t go over your limit without having to wait until a period of excitement is over.


Of course, helping you to manage your financial situation through the ups and downs of life is what we specialise in here at Serenity, so do contact your Serenity Financial Life Planner if you would like to talk.

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