The Index Card

Emotional Financial Planning

What is emotional financial planning? When I do not have a handle on my emotional life, my financial life suffers. My mother died two years ago and my financial life turned into a disaster. I had some expenses tied to travel that were difficult to cover but that isn’t why my financial life suffered. It suffered because my emotions were all I could deal with. Paying bills and keeping track of a budget were impossible tasks I pushed down the to-do list over and over until it got so bad I had to do something. And what I had to do was pay a lot of late fees and make phone calls asking for extensions and feel generally miserable about my inability to handle being an adult.

But you know what, sometimes I am not perfect. For a few months after the death of my mom, I chose tending my emotional life over my financial life. I can’t go back and change it. Most of the people and companies I contacted in the aftermath were sympathetic and did everything in their power to help me right my financial ship. A very nice man at a credit card company I will not name even figured out a way to waive some pretty hefty late fees. I can’t say enough about how kind people were, how genuinely sorry they were for my loss and how much time and energy they expended helping me untangle the mess I had made.

I made some expensive mistakes, but I learned an invaluable lesson. While I was reeling from the loss of someone I loved, strangers did what they could to help me. I felt a little less alone and that helped me pull myself together enough to start putting my financial house back in order.

And that is when I realized how closely tied my financial and emotional lives are. And it made me think about how I handle money when I am emotionally upset. I realized I am an emotional spender. If I feel sad or upset or stressed, I spend more money. When my emotions are scrambled, I am more willing to be talked into take-out. I don’t take time to make lists. I just rush through the store hoping I am remembering everything my family needs. Usually I forget half of what I was supposed to get but end up spending way more money than if I had made a list.

Messy emotions are expensive (at least for me). I recently went over the past 5 years of  my financial life. As an isolated social experiment, I checked my personal calendar along side the bank and credit card statements. And there I found ample proof that when my personal calendar showed I had overbooked myself, my bank and credit card statements showed my spending increased. When my calendar showed a steady parade of activities, my spending settled down right alongside it. That data helped me realize my need to implement some sort of emotional financial planning.

I think I have some good information here to help me get a handle on my financial life going forward. Overextending myself has real world financial repercussions. Saying ‘no’ to certain commitments can save my sanity as well as my money. It’s not enough to budget my money, I have to budget my time because when I overspend my time I invariably overspend my money.  And then both my financial and emotional lives are a mess. 

I can do better.

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