The emotional side of money


the furnace, for example, you may end up having to make a more costly repair or replacement in the long run. Listing your own pet hates when it comes to spending can show where your emotions may overrule your reason, leading to short-term and self-defeating thinking.

7 List your best and worst ex-penditures. Make a list of the five things you did with money last year that enhanced your life the most. Then make a separate list of your five worst mistakes–money decisions that were a setback or damaged your life. What were the reasons behind each of these decisions, good or bad? What lessons can you derive from them?

There’s no single right or wrong way to compile these two lists. One person’s brilliant choice may be another person’s disaster. For Susan, spending $3,000 on a week’s holiday in the Caribbean may have been just the break she needed to clear her head after a tough year at the office, energizing her to start looking for a better job upon her return to work. For Cynthia, the same holiday may have maxed out her credit card, speeding up a dangerous spiral into excessive debt that ruined any pleasure she might have taken from her days in the sun. Only you can define your best and worst uses of money.

8 Test your money self-discipline. You can also learn more about your money psychology by experimenting with short-term behavior changes. I am testing my own self-discipline through a simple but surprisingly tough challenge: for one year, I am forbidding myself to buy shirts. (I have 60 shirts of all kinds, and I love to get new ones.) In the past, I have tried other, similar experiments; for example, I once locked away my credit cards for a month, forcing myself to pay for everything in cash. I found that this act of self-discipline made me more aware of my own cash flow and forced me to re-evaluate what I spend.

Among other benefits, such limited acts of self-denial help you to appreciate more the good things you have and increase your self-confidence by demonstrating and strengthening your ability to determine what’s needless and do without it. Most important, they help you know yourself more intimately. What kinds of money behavior have the greatest hold over you? Which money habits are easy to change? Which changes really hurt? Above all, who is in control: you or your money? be

Fr
om You & Your Money: It’s More Than Just the Numbers by Alvin Hall with Karl Weber. Copyright © 2007 by Alvin Hall. Published by arrangement with Atria Books.


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