Let me start by saying I'm not an expert in Finance. Be sure to seek professional assistance with questions and specific needs when getting your financial house in order.
The coverage of the emotional side of finance is actually found in the introduction of the Family Finance Workshop book, however it's a subject that needs more than just a brief mention.
So much of what we do in life evolves around our emotions.
Even our perceptions of things can be shaped by emotions. (See The Seven Habits of Highly Effective People)
It should be no surprise that in order for us to get our "house" in order (Isaiah 38:1). This isn't just a spiritual commandment, but also a temporal one as well.
As a widow of 16 years, I experienced with gratitude the preparations my husband had made in the event he should die. We had financial goals as a couple and were in the process of becoming debt free in an effort to be financially self reliant. We were also getting food storage, water storage and other items to be self reliant in the event of emergencies. The biggest piece of self reliance, however, came in that we were working as a couple on all of this. I wasn't leaving it up to my husband to take care of everything, and because of this, I knew exactly where we stood when his unexpected death occurred.
I've seen other widows with the opposite, widows where the communication was breaking down, where secrets were being kept, and where both spouses were not handling all of the finances. This can lead to more heartache and stress than what is needed.
For me, my parents were fantastic role models. They were frugal (my widowed Mother still is), and when my older brother was killed in 1990 by a drunk driver, I watched as they sat down to discuss together how arrangements for my brother's funeral were going to be paid.
Later, when my Mother had a mini-stroke, once Mom was home and her blood pressure stable, Dad insisted they pick out a cemetery and get the arrangements made for both of them. This was because my Father and Mother both didn't want the rest of the family to be saddled with decisions and expenses when the time came. As it happened, Dad was the first to go in 2006 from lung cancer. I drove Mom to the cemetery (by then my husband was buried in the same cemetery and I now have a plot with him) and the only needed funds were for the program for his service and the cost of opening and closing the grave. Everything else had been selected and paid for back in the 90's.
There are going to be times in everyone's lives when things are at a point where some action must be taken, however prearranged plans can help with the finances during a time when the emotions are all over the charts.
Along the same lines, saving money for a rainy day (or an emergency fund as will be referenced later), can assist in making sure small emergencies don't become bigger messes when trying to handle finances during stressful times.
The other part of emotions and finances is looking at what triggers spending, as well as what triggers saving. If spending needs to be cut, knowing where the emotional triggers are for spending will assist in staying away from temptation to accomplish the saving.
In the last decade, there have been studies made on emotions and finance, here are a few examples.
A different way of looking at it:
So, the assignment for today is:
Where do you spend money that isn't budgeted? Do you have a particular weakness at a specific store are type of store?
Mine are bookstores and iTunes. I'm getting better with both.