Your behavior determines your finances because we make so many money-related decisions for reasons beyond numbers and logic.

Take how we save and spend. These decisions can involve data, spreadsheets and formulas, but you also have to step back and ask yourself big questions, like how you want to spend your limited dollars, how much you want to save, and what you’ll do if one interferes with the other.

It’s one reason why behavioral finance exists. If we make choices that differ from what economists predict, we want to understand why. That’s how we’ve learned about loss aversion, mental accounting, and other quirks in how humans approach money.

But the field can only teach us so much because it focuses on patterns and generalities. If we really want to understand our choices with money, we have to look elsewhere. And that elsewhere is emotions.

They’re why we splurge on concert tickets or hate expensive Ubers or long to own a home. They tug us in specific financial directions, and if we ever want to tug back — that is, behave in ways that better align with our values and priorities — we need to understand how they work.

Read on to learn more about emotions, their role in our behavior, and how you can better understand your own.

Emotions bootcamp

Let’s start with an overview of how emotions work so we’re on the same page for what’s to come.

To be clear, I’m not trying to baby or talk down to you! I just know from personal experience how easy it is to misunderstand this topic, as therapy flipped my understanding of emotions upside down. So let’s review some not-so-basic basics.

Emotions 101

Emotions are a full-body experience because they show up as physical sensations in your body. This… still blows my mind. I always assumed I thought about how I should feel rather than decide based on a pang in my stomach or tension in my shoulders. But it makes sense. (After all, you feel your feelings)

Emotions 201

Different emotions have different physical sensations. At this point, you’re faced with the (annoying!) realization that you cannot choose whether you’re angry, jealous, or anxious. You feel whatever emotion(s) your body and brain conjure, whether you like it or not.

Emotions 301

Now you learn to focus on what you can control. You can work to identify what emotion(s) you’re feeling and decide what to do with that information.

Emotions 401+

This is the advanced analysis. You determine why you feel a certain way as well as the best path forward. You might take an action, or you might need to process the emotion by yourself — sometimes by working through past experiences that intensify the feeling.

Through all these lessons, we can put the value of emotions into context. They can be a nuisance sometimes. Okay, a lot of the time. But they’re also a subconscious form of data that can lead to more effective decisions.

Which brings us to the next question:

How can emotions improve our finances?

Short answer: In so many ways that there’s no short answer.

Long answer: Let me explain with a personal example.

I grew up lower class, and that’s made it hard for me to purchase expensive items in adulthood, even when I really want something and can afford it.

Now, before you exit out. I get it. This sounds more good than bad, and it sometimes is. But people who grow up lower class often feel extreme pressure to limit their spending into adulthood, which can become a real issue.

For example, I used to feel a throbbing in my stomach whenever I took out my credit card, and it often stopped me from making big purchases. As I learned about emotions, I came to understand that sensation as fear, not to be confused with the dull ache and spiraling thoughts I associate with anxiety.

Once I could name the fear, I could decode it. I recognized it as an alarm bell that my body strategically developed in childhood to hoard money and keep me safe.

Then I could work through it. That fear had been stored in my body for years, so I journaled to process the emotion and wring some of it out of me like water from a cloth.

It’s made me less fearful to spend.

But if I still feel it, I now know how to handle it. I name the emotion to dull it, thank my body for how it created this reaction to protect me, and remind myself that it no longer serves me. If I’m still struggling, I at least understand where the emotion comes from, which helps me push through it.

Here’s what I want you to take away from this example:

• This is one of the biggest ways I’ve improved my relationship with money, which shows just how powerful emotional work can be.
• But this experience is hyper-specific to me. Just like how your emotional responses are unique to you.
• That’s why anyone who’s interested in finance should learn how to work through their emotions.

How can we better understand our emotions?

Therapy.

I know many people are skeptical—I get it, I was too. I think one reason is because we only explain therapy in very specific ways that only resonate with certain types of people.

But what if I said therapy is a way to take a masterclass on yourself? Or the single greatest biohack on earth? Or weight lifting for your brain?

Or let me try a different way. The cave of our mind can feel vast, and many parts are too dark to explore alone. They require an expert, a therapist who’s trained to navigate the terrain of the psyche: Our slippery slopes, steep emotional inclines, passages made narrow by our worldview, and blockades we previously considered dead ends. Therapists also have tools to clear out cobwebs, mold, or skeletons. Better yet, they teach us how to use them so we can eventually explore on our own.

Let me tell you that it is so liberating to reach that point.

Now, while therapy is the best option, it’s also incredibly expensive. That’s why we need to offer support for those who can’t afford it, as well as why the personal finance community should advocate for emotional literacy just as much as financial literacy.

Which brings me to:

Self-help resources

If therapy isn’t accessible, here’s what I recommend as a starter kit:

• Emotion Wheel: This tool is a great first step to identify and name emotions. Just search for one.
• Atlas of the Heart by Brené Brown: A well-written and researched dictionary to identify and differentiate between emotions. I also recommend her Unlocking Us podcast.
• The Body Keeps the Score by Bessel van der Kolk: A science-driven look at how the body stores trauma and emotion.
• What My Bones Know by Stephanie Foo: A memoir that offers a more accessible, story-focused take on trauma and emotional healing.

I hope you now see why emotions are so important, especially in conversations about money. It’s why I’ll continue to explore them in this blog, and if you want to join along, drop your email in the below form!