How Emotions Can Derail Your Finances

Your finances will be haunted until you exorcise your financial demons.

When it comes to financial literacy, most people assume that personal finance is strictly about numbers and calculations applied to money.

Truth is, finances have a lot more to do with emotions than most people believe.

These emotions often show themselves as "money demons," and how they guide you in your relationship to your money can determine whether you stay poor or create wealth. If you can conquer the money demons in your life, you will have gone a long way to taking charge of your finances.

The first step to finding whether or not you have financial demons is to understand your relationship to money. Until you are truthful about the emotions that influence you when it comes to money, you can't put into practice all the financial information you have gained.

If everyone took a purely rational approach to money and applied all their knowledge, there would be far fewer financial worries in the world, but for many this is not the case. If you're one who has financial worries, there is a good chance it is the result of a money demon haunting you.

Here are some common financial demons. See if they are hiding within you.

Complacency

When times are good and everything is going as planned, people often become complacent and believe that the good times will last forever. If money is tight, they figure the next raise or bonus will solve it.

The problem is that things don't always go according to plan, and there will be times when finances will be worse than expected. If you have failed to create an emergency fund, get the proper insurance for your needs. If you haven't made any preparations for the possibility that a financial emergency could occur, you may have the complacency demon within you.

Jealousy

Having all that you need is often not enough for those who look at what others have, and they see the situation as not fair. They want all the gadgets and toys that others have, even if they can't afford them.

Jealousy of what others have can quickly lead to spending money to keep up with the Joneses.

If you have ever felt that you were doing just fine with your money and then happened to look outside to see that the neighbors across the street just purchased a brand-new car, and you decide that you need one as well, the jealousy demon has you tight in his grip.

Entitlement

Some people believe that they deserve more than they have, and this feeling of entitlement gets them into trouble. It can often mean that they go into debt due to buying things that they believe they deserve even when they don't have the money to do so. If you find yourself in deep credit card debt or regularly purchasing things that you know you can't afford because you believe you deserve them, the entitlement demon is holding your hand every time you go shopping.

Procrastination

Not getting things done on time can be a recurring behavior in many different aspects of life, with a common one being finances. Most people realize that they need to keep their finances up to date but simply procrastinate on getting the things done that need to be done.

In doing so, they end up putting off vital money decisions, and this can have a negative financial impact on their overall finances. If you find that everything that has to do with money is late or is being done at the last minute, such as your taxes, then the procrastination demon has taken control.