Why Is Money So Emotional?

While our finances can stress us out, there are ways to take control

Anyone who has ever lost sleep over credit card bills or stock market shake-ups knows that money is so much more than just a set of numbers on a screen. Money, or a lack of it, can be fraught with emotions that—in some cases—lead to health issues including anxiety and depression.

A 2022 survey on money and mental health from Bankrate and Psych Central showed that a large number of Americans experience financial worries. Among those polled, 42% say concerns about finances are having a negative impact on their mental well-being. Between the aftershocks of a global health pandemic and the daily struggles sparked by sky-high inflation, it’s more than understandable. 

Other factors could be at work, too. People have emotional attachments to their money because of growing up in poverty (or wealth), experiencing a job loss, or a variety of other issues that don’t always surface without deliberate self-reflection. Because we are not always aware of the internal causes of our money issues, breaking through the emotional challenges surrounding them can be difficult.  But it’s not impossible. It just requires taking the time—and making the effort—to identify the emotional triggers that can sabotage your financial life. Ideally, that awareness can lead to positive behavioral changes that lead to a less-stressful future when it comes to handling money.

Launch A Path To Progress

We all have different experiences with money that led us to where we are now. If you’re wondering what yours are, the free MoneyType quiz¹ developed by Jennifer Leigh Selig, PhD is a great place to start. The good news is that with some guidance, you have the power and ability to change. Here are some strategies to help in overcoming the negative emotions that can sideline our financial progress: 

Know where you are: A study from budgeting app Mint shows that 65% of Americans don’t know how much money they spent last month. That can be a problem when you want to set yourself up for financial success in the future. So, if you are among the 35% of Americans who regularly track your spending, congrats! If not, grab your financial statements and dive in. (And, if you need some help with this, check out the next session of FinanceFixx¹, a new coaching program from HerMoney’s Jean Chatzky.) Make sure to take a hard look at all checking and saving account records, credit card bills, and the other ways you spend including ATM withdrawals, Venmo, Paypal, etc. Hopefully the number is less than the amount you earned. If not, it’s time to make adjustments. That could mean less take-out in favor of more meals at home. Or, reducing the number of subscription services you have (the average American has 24!) Clearly, there’s room to trim.

Know exactly where you’re headed: Financial counselors and therapists emphasize how important it is to not deal in hypotheticals. That means you should make sure to get it all down on paper or in a digital spreadsheet—everything from your current financial status to the specific goals you want to achieve. 

Build a budget: Creating a budget for your money can help take the emotion out of your spending and savings habits. In fact, people who actively use a budget often save more than those who don’t. If the ‘B’ word sends shivers down your spine, think of it as a roadmap to where you want to be in the future. And make it easy on yourself. Use the budgeting tools built in to our online and mobile banking platforms, or go online and type in ‘budget apps’ to see which type of tracking system may work best for you. But make no mistake, you need a budget.

Put a plan in place: Once you have a budget and you know where your money needs to go, set your finances on autopilot as much as possible. That could mean making automatic monthly debt payments (think your mortgage or car loan) or having automatic transfers deducted from your checking account every few weeks into an emergency fund such as a high-yield savings account at your credit union. One of Jean Chatzky’s favorite money rules is: “If you can’t see it and you can’t touch it, you won’t spend it.”

Schedule regular check-ins: As with any challenging subject, getting better with money takes practice. During a weekly check-in, you can review your online bill payments, go over your expenses, reconcile your checkbook or deal with sticky issues you’ve been avoiding. Set a timer for 30 minutes and continue working on money matters until the buzzer goes off. When you get the hang of it and find it only takes a few minutes to make sure everything is in order, you can cut your check-ins back to every two weeks.

Seek assistance: Finally, remember there’s no need to struggle through a challenging situation alone. Help is available for those who need it. The Association for Financial Counseling & Planned Education² and the Financial Therapy Association³ have searchable directories of practitioners. Some have a background in psychology or counseling while others are from the financial advice space. Many should offer a free initial consultation to see if you are a good fit.