How to Deal With the Emotional Side of Money

Lack of financial literacy costs Americans hundreds of billions of dollars every year. Financial literacy basically refers to the ability to understand how money works in your life. Although financial knowledge could help you use your money wisely, information alone doesn't necessarily translate to transformation.

While top financial experts and successful investors prioritize financial literacy, this approach doesn't always factor in the human side. That's why some people are not able to change their money habits.

In order to understand the root of your spending patterns, the first thing you need to do is accept that you make most of your decisions based on emotions. As such, you need to understand how your emotions drive your financial decisions.

Recognizing and noting down simple things like how you feel during different financial situations can help you reveal your money patterns. Think about how you feel when you get your tax refund or make a credit card payment. Some situations may make you feel elated, while others might make you anxious. Once you have enough information about your emotions that come into play during different money scenarios, you can try move on to practicing financial self-compassion.

Financial self-compassion is mindfully realizing that it is okay to make financial mistakes and learning to be easy on yourself despite making them. Creating a healthy relationship with money includes giving yourself credit for completed milestones as well as accepting your shortcomings.

Talking About Money is Difficult, But Know When to Ask for Help

Once you understand your relationship with money, you might be able to change your own habits. However, there are several situations where you might still need professional financial advice. Some of these situations include retirement planning, estate planning, complicated tax situations, and even divorce.

Unfortunately, most people don't like talking about their personal finances out of shame or fear of judgement. In society, money sometimes influences relationship dynamics and this could become a major barrier to making the best use of your money and creating a healthy financial well-being. Furthermore, there are some people who remain in denial about their financial condition, which is even more dangerous.

If you are scared of being judged when you open up about your financial stress, it might help to know that there are financial advisors who can help you focus on the future rather than dwell on your past mistakes. Although a lot of people are now seeking financial advice, you might not know where to find an advisor that you can rely on for the long term. Generally speaking, the right financial advisor will be able to create a safe space for you to understand your relationship with money, your personal aspirations, and your current financial stature in order to outline a comprehensive financial plan.

While advisors will attempt to understand your fears and emotions, they'll be careful to keep them out when creating your personalized financial roadmap. Ideally, you should look for a financial advisor who follows fiduciary standards since they are required to legally and ethically work in your best interests.

Certified advisors typically undergo 1,000 hours of coursework where they learn to connect with clients on an emotional level before delving into the nitty-gritty of interest rates, taxes, investing, and budgeting plans. The benefit of partnering with an in-house fiduciary financial advisor is their continued guidance through dynamic market changes while empowering you with financial knowledge every step of the way.

How to Connect with Financial Advisors

When seeking trusted financial advice, many people ask their friends and relatives about their experiences and often shortlist their options based on fees, reputation, and certifications.

If you prefer doing this online, the easiest way to save time and zero in on financial advisors who might actually be in sync with you is through the gateway offered by the New York-based billion dollar company SmartAsset.

SmartAsset is known for its award-winning services covering the entire spectrum of personal finance and their proprietary client-advisory matching tools. The firm's advisory services are headed by a dedicated concierge team that evaluates your responses to an online quiz about your goals and ambitions to find and connect you with up to three fiduciary advisors near you within minutes.

SmartAsset can also set up introductory calls with potential advisors so you can interview them and find out if any of them would be a good fit for your needs.

Match with a financial advisor today.