The Psychology of Money: How Your Beliefs and Attitudes Affect Your Finances

We’ve put money at the core of society. Such thinking influences our thinking and way of living. However, our thoughts and feelings about money may substantially influence our financial decision making. The following research essay explores the psychology of money addressing how our attitudes influence our bank balance.

Our relationship with money

Our perception of our finances is shaped by various aspects including culture, family, religion as well as individual life situations. Money is an anchor for safety-seeking individuals and a mark of success amongst others. Our relationship with money can be categorized into four categories: This study led to discovery of four other personality types that were security seekers, spenders, avoiders and hoarders.

The role of emotions in financial decision-making

Our financial decisions are highly influenced by emotional aspects. For example, pressure may make us take rushed decision which would result in negative money outcomes. Nevertheless, positive emotions such as joy or gratitude may stimulate more cautious consumership.

The impact of cognitive biases on financial decision-making

Our Financial Decision are highly influential by emotional aspects. For instance, anxiety can make us rush into decisions we will regret later in terms of monetary value. Nevertheless, positive moods like joy and gratitude can initiate more cautious consumption.

Changing our money mindset

Financial decision are greatly influenced by emotional aspects. For instance, anxiety can force us into making rush decisions, that might result in economic failure. On the other hand, optimistic feelings including happiness can also lead towards conscious shopping.

Conclusion:

Our financial decisions are greatly affected by emotional aspects. For instance, anxiety may lead us to make impulsive decisions which will turn out expensive economically. Nevertheless, some positive emotions like happiness and appreciation can lead to conservative consumption.