When I was a freshman in college, there was a group of girls in my dorm from well-to-do families. They carried Louis Vuitton purses to parties, scribbled offhand notes on Crane & Co. stationery and wrapped plush pashmina shawls around their shoulders before strolling to class in the morning.
My M.O. was more beaten-up messenger bag and Abercrombie & Fitch hoodie. I would have killed for a Louis Vuitton bag.
So during my junior year abroad in France, I did something dumb. I went to the flagship store and splurged on the cheapest purse they had: a teeny-tiny $150 clutch.
I knew that $150 could have scored me a train ticket and hostel stay in Budapest, a wine-tasting tour in Tuscany or a Croatian cruise. But, instead, I opted for a bag the size of my circa-2003 cellphone. I remember walking out of the shop feeling a mix of exhilaration, guilt, and regret.
I’m generally pretty pragmatic and frugal, so I was surprised that I let my emotions hijack a money decision. But financial experts assure me I’m in good company. As it turns out, negative emotions influence our fiscal behavior more frequently—and more deeply—than we may suspect.
“Research has found that negative emotions hit us with an intensity that’s two-and-a-half times as strong as positive emotions because they are signaling a disturbance you should tend to,” says Maggie Baker, Ph.D., author of “Crazy About Money: How Emotions Confuse Our Money Choices and What to Do About It.”
The good news is that once you’ve identified those negative feelings, you can use that knowledge to help get back on the right financial path. “They can motivate you to rectify a problem, and come up with creative solutions,” says CFP® Amy Jo Lauber, president of Lauber Financial Planning and author of “Living Inspired and Financially Empowered.”
Ready to confront these bad feelings head-on, uncovering their roots? With the help of Baker and Lauber, we’re shedding some light on how to interpret what your emotions are trying to tell you—to help you then reboot your mindset.