Behavior & Emotions Linked to Financial Management

Dec 21 , 2022 3 min

Money choices can have a massive effect on your day-to-day life. Financial decisions are a constant cause of conflict for nearly 73% of married couples, of which, almost half (47%) acknowledge that this tension has harmed their relationship dynamics, according to research by the Association of International Certified Professional Accountants AICPA. Financial management requires a certain level of self-awareness and introspection, meaning understanding your own spending habits and financial goals.  

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Key behavior linked to financial management is the ability to plan and budget effectively: setting clear financial goals, such as saving for a down payment on a home or building up a retirement fund, and then creating a budget that allows for regular contributions towards those goals. This would require discipline in order to ensure that necessary expenses are paid without overspending.

Other associated behavior includes avoiding unnecessary debt: dodging the temptation to overspend on credit cards or take out loans for items that are not essential to your daily life. If you have debt, it could be a good idea to learn the skills that will help you get yourself out of it. Crunch is a tool to help you start doing that.

Emotions also play a focal role in financial management; one of the key emotions is anxiety for some. Many people worry about their financial situation and may feel overwhelmed by the thought of managing their money. This anxiety can be especially amplified by the fact that the global economy is constantly evolving, which can make it difficult for you to feel secure in your financial decisions. Feelings of fear, also associated with managing your money, can often lead to making rash decisions. Also, feelings of greed can cause you to take on too much risk in the pursuit of higher returns.

Quick tips to follow as you get started with personal finance management: 

Be patient and save up for something in advance if you plan on buying it.

Be grateful, this will help you let go of the value you place on material belongings. 

Do not equate having fun with spending money; there are many ways to enjoy yourself without spending a lot of cash. 

Avoid impulsive buying, make sure you have the means before making purchases

Make informed decisions that are aligned with your long-term financial goals, rather than being based on harmful habits. Sit back, relax, and let Crunch take the lead!

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