Money has no emotions but is the reason for all kinds of emotions! Though not many people would talk about it especially if it is related to their own money, there is no denying the fact that money is the single most important factor in our lives today. There are clichéd sayings ‘money cannot buy you happiness’ or ‘money is the root of all evil’. They only emphasize the extent of our emotional association with money proving that money permeates everything that we cherish in life.

Our reaction to money and money matters is a response to our past experiences with money. These influences may not be very obvious, but might have been deeply ingrained in our sub-conscious mind, as seen by the stories of some people as mentioned below. These influences tend to make us react in a peculiar way. Many a times, it might be detrimental to our well being and creates blind spots which do not let us see what we actually need. We might commit ourselves to the same pattern repeatedly without realizing it.

Arup and Anay retired at about the same time at similar positions in a company. Arup decided to put all his retirement money into safe instruments. His portfolio could not beat inflation and he is fast running out of funds. Anay on the other hand, used multiple instruments and was able to beat inflation and has a decent amount to live on. Arup had a troubled past where he had lost money in the stock market as well as in the teak plantation schemes. He found it difficult to trust anything but fixed income instruments from banks and post-offices for his retirement savings.

Vinita Garg, who works for an MNC firm, kept accumulating all new financial products that came into the market. Every time she visited her Bank she was offered a brilliant new product which would make her wealthy!  Why did she end up buying things that she did not need? Because she did not know what she needed. She was in denial of her own financial illiteracy. As a child she was given whatever she wanted but was never allowed to talk to her parents about money. As a result she knew she needed to create wealth to live in comfort, but had no practical knowledge about money. She should have tried to educate herself so that next time she would not add to her junk.

Vinayak Pai’s parents always invested in bank FD’s and postal schemes. They managed to educate their three children and have them married. Vinayak has two kids and he is using the same strategy as his parents. He has grand plans for his children. He does not realize that the circumstances have changed drastically since the time of their parents. Now those products will not be suitable to meet his requirements. He needs to remove his blinders to see the correct path.

Anant Devan was very highly placed in a manufacturing company in a niche sector. He was made redundant when the promoters decided to exit the business. Having skills in that niche sector, he found it extremely difficult to get re-employed at the same level. He spent six agonizing months at home. Redundancy being unheard of in those days, he could not let his father, who was not keeping well, know about his situation. The responsibilities of his wife who was a home-maker and two school-going kids and dependent parents, continued. He finally agreed to take up a job in a different sector in a different city. Luckily for him, things worked out well over the years. But he still cannot get over keeping huge money in his savings bank account.

Rakesh Kumar received pocket money since class five. The amount used to be quite nominal and he had complete freedom to use the money the way he liked. The only rule was that he needed to give his mother a written account of how he spent the money. That was his first grounding in personal finance. On entering college, he received a small lumpsum which he was instructed to invest under his fathers’ guidance. After a couple of years, he started managing that fund on his own. So he has a very comfortable equation with money and till date manages his finances meticulously and has even created a small fortune at a very young age!

It takes time and effort to recognize our money emotions. It takes constant alertness on our part to ensure that our blind spots do not lead us to incorrect decisions. If we understand our own psyche with respect to money we will be much better in dealing with our financial affairs. If we do not know our relationship with money, we are being blind to our abilities and opportunities to create wealth!