Skip to content

Financial Psychology…(aka, “Why We Do What We Do”)

April 27, 2011

It shouldn’t shock me but it does. Not everyone feels the same about money as I do. Weird, right?

I suppose the shock comes mostly from the fact that I almost always think I’m right. About everything. So when I’m in the middle of talking with someone about finances (which is more often than you’d think) and it dawns on me that we don’t see some point about finances the same, it gives me pause. I suppose that since we’re all raised in different situations, financially and otherwise, it is no wonder that there are so many different feelings and views about money.

I’ve been thinking a lot more lately about my financial feelings, preferences, and opinions. After a little dissection, here’s what I’ve come up with:

  1. Finances have the potential to cause me to feel anxiety. I don’t really feel anxiety about finances often, but the potential is there. I hate worrying about money, and I hate anticipating the possibility of worrying about money.
  2. Due to “thing number one” I have a tendency to make financial choices that will alleviate the possibility that I’ll have anything to worry about finances. Having more than I need, of anything, helps me not worry. Back in the old days, we kept one year of house payments in the bank. Just in case.
  3. Although “thing number two” is true, I don’t really have any desire to be rich. I don’t need to have a lot of everything. I just feel better having more than we need when it comes to needs. I don’t really need a lot of clothes, but I do like having more underwear than I need, just in case we don’t get to the wash on the normal day…
  4. I dislike monthly payments. I don’t like things hanging over my head. I’d rather pay a year’s worth of pre-school payments rather that make a monthly payment for the entire school year. We always pay our insurance every six months rather than making monthly payments.
  5. Having a reasonable house payment is a must. As much as I think your living space is vitally important to how you perceive the world, having a house payment that is a stretch is something I’v very uncomfortable with.
  6. I like saving money, but I like saving money for something. I don’t just like putting money in the bank so it can sit there. We have accounts for retirement, emergency, long-term purchases and possibilities, and short-term purchases and possibilities. We don’t have any stashes of money that have no goal. Money is for spending. Even if it is intended for a long-time future purchase.
  7. As much as I like saving, I like giving money away. It does two things (one is more selfish than the other). It helps others. And it makes me feel like we must be doing well financially if we can afford to give some away.
  8. I’m just fine with the thought of “going without” some things. For instance, we recently cut the cable out of our media lives. For a few days, I worried that we’d miss the regular TV shows that we were used to. But we really haven’t even noticed. I’ll often go into a store to purchase something that I’ve wanted, but then decide that I’d rather not spend the money because I don’t really need the whatever it is I went in for.
  9. On the other hand, if we’ve budgeted for something, I don’t mind spending the money. It doesn’t pain me to make our house payment. We have the money set aside each month, so I don’t mind sending it to where it goes.
  10. I like to check on our finances often, but I don’t like to make financial decisions often. I like that there are many things on auto-pilot. For instance, each year, around the time I get a modest raise, the percentage of our income that is sent into our retirement account increases by one percent. I don’t decide this each year. It just happens. If I had to re-decide to do this each year, I might not do it. But, without much thought, we’re to the point where we really are sending a significant amount to retirement.
  11. I’m enticed by electronic gadgets. Luckily I still feel like saving up for these things and my wife keeps be balanced (since she couldn’t care less about gadgets).
  12. I hate debt. The only debt we have is our house. We pay the credit card off each month.
  13. I like free stuff. That’s why we use our credit card. We get free money when we use it.
  14. As much as I like having money, I like being happy, so I try not to focus on finances too much. If I were working all of the time and had a ton of money, but didn’t see my family much, I would be very, very unhappy.

These are just some of the things that influence how we spend our money. I think it is a real blessing that my sweetheart feels about the same as I do about financial matters. That makes a lot of our financial decisions easy ones to make…

No comments yet

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: