How to make healthy financial choices every day, according to a financial psychologist

How reframing your emotions and changing your daily behavior can help you save money.

concept of spending money man with american money in wallet

Reframe and harness the power of your emotional decision-making process to create a healthier, more stable financial life.

Photo by Yulia Grigoryeva on Shutterstock
  • There is a psychological connection between your emotions and your spending habits. Many people live in a "reactionary" mode where they spend money in reaction to the day's events.
  • Living in "intention mode" can help you reframe daily financial decisions - "how will this get me closer to my future goals?"
  • Financial psychologist Dr. Tracy Thomas shares her tips for harnessing the power of emotion and intent to create a healthy, financially stable life.


How your emotions drive your financial habits

piggy bank drowning in water concept debt

Your feelings and emotions deeply affect your financial habits...learn how to control them for better financial decision-making.

Image by Lightspring on Shutterstock

Dr. Tracy Thomas is a psychologist and self-proclaimed emotional scientist who helps highly driven, emotionally sensitive people harness their emotional strength to live an elevated life.

"At one time," Thomas explains, "emotional-sensitivity was believed to be a weakness. However, new work into emotional sensitivity reveals that emotionally sensitive people aren't just overly-emotional, 'touchy' or 'hyper-sensitive'. Without knowing it, they actually possess an incredible gift of creativity, intelligence and intuition."

Your feelings deeply affect your financial habits.

When emotionally sensitive people combine their gifts with drive and motivation, it becomes an asset that can lead them to wealth, success, and happiness.

There is a psychological connection between your emotions and your spending habits. As human beings, our emotions drive most everything we do — and the choices we make with our money are deeply affected by how we interact and react to things that happen in our lives.

Reactionary spending

Living in reaction is something we do most of the time, according to Dr. Thomas. When we're in a reaction, we tend to create chaos. We aren't able to harness our emotional energy into creating positive investments and outcomes.

Living in reaction means that we're often simply reacting to our immediate situation, immediate wants, immediate "needs" with little thought to the needs of our future self.

The more reactive you are, the more you will simply "engage with life" instead of investing in building the life you truly desire.

Intentional spending

Acting with intention when it comes to your financial life doesn't mean removing all emotion from the situation at hand. In fact, you are just redirecting those emotions.

To act financially with intention, Dr. Tracy Thomas suggests that we consider what our future self would want us to invest in today. Making emotional choices doesn't have to be a bad thing - as long as those emotional choices live to serve you in the future instead of in the moment.

Living in a state of reactivity also creates distractions. We are sidetracked from our original, long-term goals and lose sight of what we really care about. Ridding your life of financial distractions can help you focus your energy on giving your future self what they desire most.

Changing the way we think about finances

glass jars filling with coins growing plant concept saving money

Reframe what it means to "save money" into something that is more positive by placing emotional meaning in your investments.

Photo by ShutterOK on Shutterstock

Most people, according to Dr. Thomas, are reactive by nature. We react to our immediate emotions, needs and desires - often putting our long-term goals at risk. The first step in changing the way you interact with money is recognizing that there are emotions and behaviors in your life that need to change.

Monitor your behavior: Am I going to be intentional or reactive today?

A big part of this change, Dr. Thomas says, is monitoring your daily behavior and really taking note of when you are reactive and when you are intentional.

From there, you will be able to identify healthy and detrimental behaviors that are affecting your ability to live a financially healthy lifestyle.

When you go to spend any of your money, Dr. Thomas suggests you ask yourself these kinds of questions:

  • Is this an intention? If so, what is my intent with this purchase?
  • Is this a reaction? If so, is this a valid reactionary expense or something I can avoid?
  • How will this purchase (or lack of purchase) bring me closer to my future goals?
  • Will this decision create my desired outcome?

Think about money as a motivation, not a restriction.

Thinking about money in terms of "savings" can feel restricting and often unmotivating. However, thinking about money in terms of "motivation" for your future goals (whether that be a house, a car, a trip, etc) can help you reframe what it means to "save money".

In your mind, no longer is "saving money" something you "have to do" - it's something you want to do. Saving money becomes a goal in itself, rather than something that feels like a burden or responsibility.

Refocus on what you are really invested in by adding meaning to your investments.

Reframing what it means to save money includes refocusing on what your investments are, both financially and emotionally.

If you are currently invested in a home in which you want to do major renovations, that can be a financial motivator. Saving money (to later spend on renovations) will increase the value of your home.

If you are currently investing in a trip for your family, this can be a great emotional motivation. Creating life-long memories and providing a fun vacation for your loved ones is a wonderful goal to keep in mind that will help pull yourself out of reactionary choices and help you think more rationally when it comes to saving money.

The importance of thinking about your savings on a deeper, emotional level

According to Brian Tracy, a leading sales, management, and business success advocate, one of the most important things we can do to better our financial choices is to become a life-long student of how to save money.

Investing is about more than just what's in your bank account - it's a way of life.

Dr. Tracy Thomas also believes that changing the way we view our savings (and money, in general) is about more than just making smarter decisions with the money we have - it's about changing the way we view money at all.

"Your savings goals are really your outcomes for your life. It's about creating something you really want." says Dr. Thomas. If you spend your life in a reactive process, savings tends to lack the powerful drive that successful, wealthy people give to it.

While impulsive, emotional purchases are key signs of bad spending habits, there is merit to pulling yourself out of that reactionary spending mode and still maintaining and emotional intelligence when it comes to your spending habits. Completely separating your emotions from your finances can only make things more difficult, as there are no motivating, impactful meanings behind your financial decision-making processes anymore.

The key is to take yourself out of emotional reactionary spending and still maintain an emotional motivator to creating a healthy financial life.

Thinking about your finances as a powerful and emotional driving force that will create a better life for yourself and the things that are important to you in your life (your business, your family, etc) can make things more cognitively clear when it comes to making day-to-day financial choices.

"The budget is not just a collection of numbers, but an expression of our values and aspirations." - Jacob Lew

COVID-19 amplified America’s devastating health gap. Can we bridge it?

The COVID-19 pandemic is making health disparities in the United States crystal clear. It is a clarion call for health care systems to double their efforts in vulnerable communities.

Willie Mae Daniels makes melted cheese sandwiches with her granddaughter, Karyah Davis, 6, after being laid off from her job as a food service cashier at the University of Miami on March 17, 2020.

Credit: Joe Raedle/Getty Images
Sponsored by Northwell Health
  • The COVID-19 pandemic has exacerbated America's health disparities, widening the divide between the haves and have nots.
  • Studies show disparities in wealth, race, and online access have disproportionately harmed underserved U.S. communities during the pandemic.
  • To begin curing this social aliment, health systems like Northwell Health are establishing relationships of trust in these communities so that the post-COVID world looks different than the pre-COVID one.
Keep reading Show less

Who is the highest selling artist from your state?

What’s Eminem doing in Missouri? Kanye West in Georgia? And Wiz Khalifa in, of all places, North Dakota?

Eminem may be 'from' Detroit, but he was born in Missouri
Culture & Religion

This is a mysterious map. Obviously about music, or more precisely musicians. But what’s Eminem doing in Missouri? Kanye West in Georgia? And Wiz Khalifa in, of all places, North Dakota? None of these musicians are from those states! Everyone knows that! Is this map that stupid, or just looking for a fight? Let’s pause a moment and consider our attention spans, shrinking faster than polar ice caps.

Keep reading Show less

Skyborne whales: The rise (and fall) of the airship

Can passenger airships make a triumphantly 'green' comeback?

R. Humphrey/Topical Press Agency/Getty Images
Technology & Innovation

Large airships were too sensitive to wind gusts and too sluggish to win against aeroplanes. But today, they have a chance to make a spectacular return.

Keep reading Show less

Vegans are more likely to suffer broken bones, study finds

Vegans and vegetarians often have nutrient deficiencies and lower BMI, which can increase the risk of fractures.

Credit: Jukov studi via Adobe Stock
Surprising Science
  • The study found that vegans were 43% more likely to suffer fractures than meat eaters.
  • Similar results were observed for vegetarians and fish eaters, though to a lesser extent.
  • It's possible to be healthy on a vegan diet, though it takes some strategic planning to compensate for the nutrients that a plant-based diet can't easily provide.
Keep reading Show less
Scroll down to load more…
Quantcast