Written By Kelley Holland
How do you make decisions? Are you a linear, “if A, then B, and that’s it” person? Or do you intuit your way to a choice, gathering pros and cons in a seemingly random sequence? The answer may have a lot to do with you how you manage your finances.
Apparently, people who are less analytical and logic-driven – so-called affective decision makers – are much more likely to feel that the world of money and finance is “not them,” according to a recently published study. They view finance as a cool, highly rational, impersonal thing, and they shy away.
“People say, ‘Yeah, I can do it, I just don’t want to,” said Aner Sela, an associate professor of marketing at the University of Florida and a co-author of the study. “It feels so cold and unemotional.”
Sela says he even recognizes these feelings in himself. He knows a fair bit about money and finance, but “financial decision making still has that flavor of going to the dentist.” To be clear, there is absolutely nothing wrong with non-linear thinking itself. I’ve worked with plenty of highly successful clients who don’t follow an obviously logical path when they make decisions.
But if you ignore your finances – for whatever reason – that can create big problems down the road. If you shove that 401(k) paperwork in a drawer instead of signing up to contribute, eventually you’ll find yourself behind when it comes to building a retirement nest egg. If you ignore the bills piling up, you’ll put a big dent in your credit score.
Even worse, you can wind up in a vicious cycle. If you find yourself in these situations, they can feel so unpleasant in and of themselves that you become even more reluctant to take charge. Obviously, there’s a problem here. But there is a way to get around it.
The key is to reframe how we think about money.
A lot of financial marketing and advertising portrays money as this abstract but powerful thing that’s kind of “out there.” You get the feeling that people who are financially successful are tough, resolute, disciplined – and it can be intimidating.
But at the end of the day, money is just a tool. It is a thing you can use to get you the life you want. And tools are something we’re all familiar with, right? All of us use phones, cars, computers, and so much more to make our lives better.
The thing with tools is, when we use them we are in charge. We have a mission – to get to work, to write a paper for school, to contact a loved one – and we use a tool to make it happen. You can use the same approach with money.
Take a deep breath, give yourself a minute, and consider what your mission is, or put another way, what you want your life to look like.
Now, everyone’s mission will be different. I may really want a future filled with travel and adventure while you may dream of owning a home big enough to hold kids and grandkids for extended visits. And so on.
But once you have a vision of what you want, then you have something to move toward. And money is a tool you can use to make that happen.
So the next time you are confronted with money tasks, try this: take a deep breath, remind yourself of your mission, and put yourself in charge of the moment. Think how you can make your money work for you. You’ll be surprised how far you can go.