Christian Financial Advice and Biblical Stewardship

Manage Your Money by Managing Your Emotions

  • Dr. Susan McCarthy Contributing Writer
  • 2006 12 Jun
Manage Your Money by Managing Your Emotions

The world of money and investments can sure seem daunting at times. Stocks, bonds, PE ratios, asset allocation, mutual funds - where does one begin? From the outside, this sophisticated, tough and masculine world of Wall Street appears to be all about competition and money, money, money. But imagine my surprise when I learned that it’s also about some of the most profound lessons in human compassion and frailty I have ever seen.

For over twenty one years now I’ve been a financial advisor with a major global financial services firm. And I have indeed learned a thing or two about money. Solving the financial problems that arise as my clients’ lives unfold is the work that I do. Through it, I’ve learned how money makes money, how to protect ourselves from economic catastrophe, how to measure risk and our tolerance for it, and how to balance a portfolio to meet a variety of needs. But of all the lessons my work has taught me, the most important doesn’t involve numbers at all. It doesn’t involve calculations or graphs or charts. My most important discovery about money is a simple one: the world of money is a world of emotion. Over and over, I’ve seen how it’s our emotions, and not the intricacies of investments themselves, that make financial decisions hard. And more times than I can count, I’ve seen how our emotional relationship to money gives it enormous teaching potential in our lives.

Whether we’re an individual or a family, we all tend to focus hardest on our money when there is some type of transition taking place in our lives. Think of the financial scramble that takes place as a child begins college, the confusion and anger of divorce, the abrupt change in cash flow that accompanies retirement. These are the types of transitions that are both financially challenging and emotionally charged. The best decisions we make during these kinds of stressful times are the ones that acknowledge our emotions and take them into account. And the potential rewards of acknowledging our emotions as we make financial decisions reach well beyond the financial!

So how does one get a handle on the "money emotions?" Begin by asking yourself these questions. If you were to find yourself at a party where everyone was considerably better off than you, how would you feel? Uncomfortable? At ease? What would you think of these people if all you knew about them was that they were fabulously wealthy? Does their money make them good people (better than you in fact)? Or is it the opposite? Are you suspicious of them and their riches?

Or what if the roles were reversed, if everyone at this party were very poor? What then would you think of them and how would you feel in their midst? In other words, how does your perception of another’s money color your thoughts about them? And more importantly, what does this attitude say about you and your own money?

This simple exercise is not designed to make us feel bad about ourselves. It’s only to make us more aware, more alert. Money courses its way through every aspect of our lives. Whether we care to admit it or not, our attitude towards money influences our choice of work, our childrearing, our health decisions, and our marriages. Money is a prism through which we can, if we choose, view our entire life, especially our emotional life. The world of money is filled with meaning.

And here is the best kept secret of all. One of the most surprising things I’ve learned in my years as a financial advisor is that there are spiritual lessons to be had in the complicated world of money. We may believe that money is the root of all evil but, in fact, it is not. Money is absolutely neutral, a simple tool. It’s what we choose to do with it that’s important. In my many years, I’ve seen clearly that money can tempt us to good every bit as easily as it does to evil. My close involvement with my clients has permitted me to witness as many inspiring stories of grace, compassion, and peace as the ugly ones of anger and greed.

The next time you have to make any kind of financial decision, step back from it for a moment and ask yourself what you feel. Fear? Of making a mistake perhaps or losing control. Power? That feeling of self-sufficiency that having money can bring. Or perhaps a feeling of superiority that can come with money. Expansiveness? That "share the wealth," "spread the joy," kind of feeling that accompanies good fortune. Gratitude for all of the blessings of your life?

You may be surprised at what you see when you acknowledge the emotional side of money. And whatever emotion it is will be an important one for you. The simple truth is that the emotions we feel when dealing with money are cornerstones of our lives. Examining them will make us better financial decision-makers to be sure. But it will also open the door to a deeper understanding of ourselves and alert us to potential gifts or stumbling blocks in our journey as God's stewards. And who knows where these discoveries will lead!

Look for more articles by Susan McCarthy in coming months about managing our emotions with our money.