You already have what you need inside you to be better with your cash. Once you learn how to use emotional intelligence to manage your finances, you have more control over your money.
If your personal finances are currently out of control, or just not being managed as you’d like, it can make you feel inadequate and overwhelmed. That's why I'm here to teach you how to use emotional intelligence to manage your finances.
Many of us believe that we need a financial advisor or a serious injection of cash in order to get better with money. However, the reality is that you already have all the tools that you need to manage your finances better, you just need to start using them. Your first step is learning how to use emotional intelligence to manage your finances.
Emotional intelligence is all about the decisions you take and the way that you make those decisions. At its heart, it’s about being able to identify and manage your own emotions, as well as those of others. Poor emotional intelligence plays a big role in bad financial decisions, such as failing to save or impulse shopping. If you can harness your emotional intelligence, then you can change the way you manage your money in a big way.
Working with emotional intelligence when it comes to money management has three central ideas: knowing yourself, learning how to profit from your assets, and becoming familiar with the tips and tricks that enable you to control your liabilities.
Understanding your own emotions is a fundamental part of emotional intelligence and takes many forms:
• What do you really want from life? Clear, unambiguous goals that are true to who you really are contribute to better money management. Yet we often find it difficult to be honest, even with ourselves, about what our goals really are.
• How do you manage your money? The starting point is self-awareness, i.e. how you already manage your money. Do you use money management apps and neat spreadsheets or are you the type to spend until there's nothing left to spend? Think about the ways in which you aren’t entirely honest with yourself about consequences or motivation. Many of us find it all too easy to over-spend because we feel like treating ourselves, and because we believe we will be able to pay back what we owe eventually.
• Where are you going financially? Do you have a good idea of the direction you're going and why you’re going that way? Have you, for instance, got a goal to save enough for a major life event like your wedding and honeymoon, or buying your very first home?
The assets here are not your financial assets, but the thoughts and feelings that you have that will benefit you and put you in a stronger position when it comes to your finances. So, you may feel good about budgeting, or you may be naturally inclined towards frugality. Equally, you might have great entrepreneurial flair and are confident in taking a financial risk because of the possibility of high returns. By learning how to profit from these positive feelings and emotions, you can become more emotionally intelligent and be better with your money. Even millennials who are smart at saving can benefit from employing their emotional intelligence in this area of their life.
Liabilities come in many forms when it comes to our personal finances, and we all have them. It could be the way that you always impulse buy an expensive pair of shoes if you’ve had a bad day, or the fact that you don’t think further ahead than the next month when it comes to money (that's my personal failing). I saw a great ad for the Nationwide recently about impulse saving. Now that would't be a liability. Identifying your liabilities or failings is all part of the process of acquiring better emotional intelligence. It doesn't mean you have to beat yourself up, but just recognize your shortcomings so that you have the chance to change for the better. Learning how to shore those liabilities up so that they don’t hold you back will have a very positive impact on your finances in the long run.
We all have dreams. Sometimes we know they will never come true. Other times there is a real chance that we could achieve a dream – that beautiful house in the countryside or running our own business. I think there's a chance of that happening. Whatever your own dreams, try visualizing how it would feel to be there in that dream life. Visualizing is the key to achieving your goal. Good Luck!