How do we relate to money?  This is an important question that needs clear answers because it directly relates to how we manage money.

Money holds a different status in one’s emotional life. For one person it brings pleasure, for another, it could mean power. The child in us wants to get immediate pleasure, and splurging money is the only way out.

For many people, money is a restricted resource. Having money or not having money sets the course of our life. The moment we step over those lines the problems start. This article probes the important emotions that are associated with money and how it affects money management.

The important emotions money evokes in us.

Money and the lack of money are two ends of the spectrum. Money, per se, evokes unbridled happiness, and the lack of money evokes fear, anxiety, and insecurity. Money is also deeply connected to humiliation. Many people who are undergoing financial difficulties might feel that they are failures in life. This loss of face or shame can trigger disastrous emotions. For example, people who are in great debt tend to ignore their growing bills and collection notices and leave them unopened for fear of facing up to this humiliation.

This leads them to take recourse to alcohol or some other intoxicants to hide their negative feelings and failures.

How do we understand the psychological aspects of money?

We have to understand these emotions that are associated with money. We should be able to identify who we are imitating in our attitudes towards money, Is it our parent or is it a friend whom you look up to, or is it someone who has made his riches the hard way? This self-understanding will help you to be aware of why you want money. Some people want money so that they can achieve status in society, and for some, it is a sense of security.

Psychologically, money is linked to defensive mechanisms in man. Shopping is a defensive mechanism used to comfort ourselves. Taking an insurance policy is a defensive mechanism that creates the emotion of security. Similarly, investing our money in business or banks provides the emotional security that we are looking for. All these emotions are associated with the way we want our life to be.

In some societies, traditionally men handle money and all-important family decision are taken by them.

This gives them the power over someone else’s life and this could lead to unhealthy relationships where people get controlled and are prone to abuse. This behavior is unhealthy.

The psychological emotions let loose by money are also very important in money management. We have to understand this facet of life. Ben Soifer provides consultation on investments that you could benefit from.