MONEY IS EMOTIONAL: WHY EMOTIONAL INTELLIGENCE MATTERS
- Derek Hagen
- Jul 31
- 3 min read
❝An emotionally intellgent person can be compared to a captain who uses the compass of the boat wisely.❞ -Hugo Alberts
Have you ever made a money decision you knew wasn’t ideal… but you made it anyway?
Maybe you splurged out of frustration. Or put off something important because it felt overwhelming. Or maybe you heard good advice but just weren’t ready to act on it.
You’re not alone. That’s not a logic problem. That’s an emotional problem.
Let’s say a financial advisor gives you the perfect plan. All the numbers make sense. But something still doesn’t sit right. Maybe you feel vulnerable, or ashamed, or just stuck.
If that emotional layer goes unacknowledged, the plan often gets ignored.
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It’s not because the advice was wrong. It’s because emotions shape our financial behavior even when we don’t realize it.
WHAT YOU CAN ACTUALLY CONTROL
A lot of life is outside your control. But not everything. There are four key areas that are in your hands, and they’re especially important when it comes to money and emotions:
Attention: What you choose to focus on. There’s a lot of noise. Mindfulness can help you tune in to what really matters.
Mindset: How you interpret things. Scarcity or abundance? Fixed or growth? Blame or curiosity?
Motivation: Why you’re doing what you’re doing. Sometimes it’s buried but it can be brought to light.
Action: What you choose to do next. That’s always yours to decide.
These four are like emotional intelligence in motion. They help you understand what you’re feeling and respond with intention, not impulse.
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Resilience is the ability to bounce back (or grow) from stress and adversity. The ability to maintain physical, mental, and emotional well-being in the face of setbacks. Learn more about how resilient you are. |
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SO... WHAT ARE EMOTIONS?
Most of us weren’t taught how to understand emotions, especially when it comes to money. We were taught to be “smart” with money, not “in tune” with it.
But the truth is that emotions are part of every financial decision you make.
One way to think about emotions is this: They’re what happens in your body, wrapped in a story.
When your mind senses a threat (real or imagined), your body reacts. You tense up, avoid action, or lash out. If you slow down, you might notice what’s really happening.
Here’s a quick guide to what emotions are often signaling:
Anger — A sense that your rights were violated
Guilt — That you violated someone else’s rights
Sadness — That you lost something important
Fear — That something bad is happening now
Anxiety — That something bad might happen soon
Embarrassment — A fear of not measuring up to others
When you can name the emotion, you’re already starting to shift it. Or, if you prefer rhymes, if you can name it, you can tame it.
EMOTIONAL INTELLIGENCE IN EVERYDAY LIFE
So what does it mean to build emotional intelligence?
To be clear, EQ is not about being cheerful all the time. It’s not about avoiding conflict or pretending things don’t bother you.
Instead, it’s about recognizing emotion as useful. As data. As something that, when you pay attention to it, can help you make clearer, wiser choices.
There are four key emotional intelligence skills:
Self-Awareness — Noticing your own feelings
Empathy — Noticing what others are feeling
Self-Regulation — Handling your reactions in healthy ways
Relational Skill — Using emotion to improve how you connect, decide, and relate
These skills aren’t just useful in therapy or conflict. They show up in budgeting, spending, investing, conversations with your partner, career choices, and more.
Money doesn’t happen in a vacuum.
It happens in relationships. In daily habits. In emotional patterns.
And when you learn to notice what’s going on underneath the surface, you’re better equipped to handle what’s on the surface too.
You get one life; live intentionally.
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REFERENCES AND INFLUENCES
Feldman Barrett, Lisa: How Emotions Are Made
Klontz, Brad, Rick Kahler & Ted Klontz: Facilitating Financial Health
Reivich, Karen & Andrew Shatte: The Resilience Factor
