If you were to ask most people, they’d probably tell you that their emotions didn’t really have anything to do with their money. I would argue that you’d be surprised at how our emotions influence most all aspects of our financial lives.

Remember back to when you were dating, or if you’re still dating, and think of all the money you spent because you liked someone. Think of all the money you’ve spent on things because you were afraid of what someone might think of you. You might also remember a time when you didn’t buy into a particular investment because you were afraid that you might lose money.

I could continue with more and more scenarios like this, and I’m sure you can think of some yourself. We need to recognize that emotions are a big part of all our decisions, including our financial decisions.

We’re always told that we should leave our emotions out of these types of decisions, and because of this we sometimes think that we always do. This isn’t always true. Recognition of the presence of emotion is really the first step. If you can notice and determine what your emotional reaction is or would be, you’re then more able to take this reaction out of the decision.

Sometimes you have to ultimately rely on your gut feeling, but make sure you can recognize and separate your emotions from your money.

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