Money is undeniably one of the most important aspects of our career and work-life. This post and the featured video discuss this central point 👇🏽
How is your relationship with money?
Some of us are thrifty, some of us are spendthrifts. Some of us shell out liberally on certain things (say – travel, books, education) but are reluctant to spend on something else (say – consumables, gadgets, clothes). In fact, what we spend our money on reveals a lot about us.
In this short video, accounting practitioner and author Robert A. Belle shares this –
Analyzing my expenses helped me to understand that I had an emotional pattern where when I’m struggling or celebrating, I binge on chocolate.
Our relationship with money represents our relationship with life. The accounting of my own chocolate behavior told me the story of my own denial.
He recommends three steps to understand our relationship with money, and the emotions behind our monetary habits. Do watch and reflect (~ 8 mins).
Behavioral Finance & More…
Put simply, behavioral finance studies how we behave with our finances, our mental models of money and everything around it. It tries to explain how our own biases affect our handling of the finances. Sometimes we refrain from buying certain things, but at the same time we spend freely on a few other things. Allow me to share my own experience – despite working for over 2 decades in the software industry, I still cannot think of splurging on an iPhone (I justify this as not wasting money on depreciating assets :P). On the other hand, I spend freely on travel, books, courses etc.
One more example – for several decades the education in India has been highly affordable, and to a large extent student debts were unheard of (though this is changing rapidly). Thus, psychologically it is often difficult for Indians (especially the older generation) to comprehend steep fees for the educational courses.
Speaking of courses, here is a wonderful, free course on behavioural finance (5-6 hours) on Coursera – Behavioral Finance (Duke University), do check it out. And if you’re really intrigued, here is a famous book – Psychology Of Money that you can explore, read.
Also see: Does money bring happiness?
I don’t understand money/finances much myself, and I’m learning about it. If you know any more resources that you’d highly recommend – please add them in the comments here. 🙂
The featured image used in this post is by Frantisek Krejci from Pixabay, and I’m using it here with gratitude.