The Psychology of Money: Why Money Elicits Emotion

Stress. Happiness. Guilt. Pride.

Finances and money elicit so many emotions. Unfortunately for many of us, those emotions can be negative, like shame or fear, and keep us up at night.

To better understand the how and why behind these emotional responses to money, we tapped Rockland Trust's Financial Education Officer Julie Beckham. Julie’s knowledge and expertise can help you identify the emotions you’re feeling around your finances and use that information to develop a plan for meeting your financial goals.

How do my feelings about money impact my financial goals, money management and behavior?

Many people ask themselves: what is the impact of my emotional response to money?

“Most of those negative emotions, such as shame, fear or guilt, can keep us from taking action,” said Julie. “Those emotions can limit us, stripping our motivation to learn and take both big and small actions that have a significant impact on our financial future.”

Julie spoke with Jackie Cooper, President/Executive Director for Financial Education Associates in Boston, on episode five Huddle Up with a Financial Coach! of the No Shame In This Money Game podcast. In this interview, Jackie and Julie talk about the significance of little actions, like filling out 401(K) paperwork or creating a savings account for a particular financial goal.

These “little actions” can take a significant amount of energy because your mind may be consumed with fear of failure or worries about consistency. The “what ifs” add up to an obstacle that gets in the way of taking an action. Limiting beliefs can stop us from immediate action that leads to longer term gains.

Listen to Julie’s podcast series: No Shame in this Money Game >>

Where do these negative emotions come from?

While every person has their own relationship with money, Julie thinks that the reason many of us have negative emotions around money is because it is kept so secretive from the time we are young.

“We teach kids to be curious about the world around them, but shut down conversations around money,” Julie said.

In her work through the Ms. Money and the Coins program, Julie knows all too well that younger children often have positive emotions about finances and learning about money, including excitement, curiosity and eagerness.

We also have trouble communicating with our own parents, friends and others in our circles about finances. The stigma around financial conversations is persistent across all generations. It is important to remember that you are not alone in any negative emotions around money -- a recent National Foundation for Credit Counseling survey found that nearly 70% of U.S. adults report having financial worries.

What can I do once I recognize I have negative emotions around money?

Admitting that you have these thoughts and feelings about money is a great first step. Another important step is to open lines of communication wherever possible, with your partner, kids or even parents. Communication with those in your inner circle can lead to finding out new information or resources that may be useful as well.

Talking to a financial advisor is a great way to discuss your emotions about money and your financial goals. This person can help you work through an actionable plan to ensure that you are on track for the milestones and goals you want to reach, and taking those important small and big actions that will help you get there.

Rockland Trust helps thousands of people every year, who all have different experiences, thoughts and feelings about their finances. We are here to help you through the big things — buying your first home, starting a family or retiring — to the small things, like deciding if you want to buy those Red Sox tickets. Check out the Learning Center for expert advice designed to help you expertly navigate the financial parts of your life.