Why Money is So Emotional

Money is emotional because we’re human. Humans are emotional creatures. You experience emotions in every area of your life, so why would money be an exception? But when left unexamined, your emotions have the potential to create financial chaos. So, why is money SO emotional?

Why Money is So Emotional

Because Science

Neuroscientist, Antonio Damasio, made a groundbreaking discovery: humans cannot make logical decisions. It’s literally and physically impossible. He studied individuals with stroke damage in the part of the brain where emotions are generated. They seemed normal; except they were not able to express or interpret emotions.

But Damasio found they all had something else in common: they couldn’t make decisions. These individuals described what they should do in logical terms. Yet they couldn’t make even simple decisions, like whether to have a chicken sandwich or a hamburger for lunch. Damasio discovered the moment of decision occurs in the same part of the brain that processes emotion.

Emotion Triggers Action

Most money experts will tell you, “If you want to change your financial results, you need to change your actions.” Then they will give you a checklist of “7 Simple Steps to Financial Freedom.” They’re partially right. If you take better actions with your money, you’ll get better results. But there’s the missing piece that Dr. Damasio discovered: emotion is the trigger for the action we take.

People take action for one of two reasons: to increase pleasure (positive emotions) or to decrease pain (negative emotions.) And although it seems like our emotions come out of nowhere, there’s a trigger for them, too.

Thoughts & Words Trigger Emotions

Emotions—both positive and negative ones—are a reaction to what is going on around us and inside of us. If you’re angry, it’s because either someone said something you don’t like or you’re thinking about a situation that’s upsetting to you. There’s an underlying reason, a trigger, for the emotions we feel. Words—either spoken aloud or thought in your head—precede your emotions.

Your thoughts form your words, and words give birth to your emotions. Your thoughts and words directly affect how you feel about your finances. Your feelings drive your decisions and the resulting actions of your money management. Now, here is the scary part. Sometimes those thoughts and words are embedded so deeply in your unconscious mind, that you’re completely unaware of them!


The other reason why money is so emotional is because it gets tangled up in our relationships. I tell my married clients, “Money is like the third person in your relationship.” Each person has their own relationship with money with their unique emotional baggage. You can see how complicated and messy this love triangle can be!

There are times when we do things we normally wouldn’t with money because of our relationship. If you’ve read my book, Money is Emotional: Prevent Your Heart from Hijacking Your Wallet, you already know my dysfunctional relationship with my former fiancé influenced me to make a pile of unwise money choices in my twenties.

Managing Your Emotions

They key to winning with money is understanding and managing our emotions, not trying to turn them off. You might think that people who are financially successful are behaving logically with their money, but they’re not. The key to their success is linking positive emotions with the right money behaviors, not turning themselves into emotionless robots! Developing emotional intelligence relative to your money leads to lasting Financial Dignity®.

Financial professionals, want to raise your Emotional Money IQ & help your clients? My CFP® Board-approved course, Foundations of Financial Dignity® will show you how! (CE credit for CFP’s)