Emotions and Finances

finances emotions

The biggest, unexpected financial setbacks in my life have all been the result of letting my emotions get in the way while I took my eye off the financial ball. I think about that much more these days, now that I’m focused like a fiend on making sure I have enough for my retirement…even though I don’t plan to retire for another ten or fifteen years and I don’t plan ever to cease my creative work.

Still, I know better than to expect Social Security to be around in any reasonable amount to live off of by the time I do retire, so I believe it is prudent of me to have enough put away that I don’t have to depend on anyone else but myself.

Had I not let my emotions get in the way, I would now have double or maybe triple what I have stashed away. When my first marriage ended, I was desperate to get out of the legal bonds, enough so that I saw the loss I was taking as paying my ransom to go free. I didn’t regret it then and I don’t regret it now, though there are a few twinges, every now and then, when I think of how decisions I made under such stress will affect my retirement. At the time, retirement was a wistful dream that I didn’t think would ever happen, so giving up money in retirement was the easiest of all possibilities.

I’ve always had a knack for picking stocks and mutual funds, especially mutual funds, since my twenties. I had one particular mutual fund that did exceptionally well, tripling in value in a very short period of time. I still remember the day that I went home and announced that I was going to take ¾ of the value out and put it in something safer because I had a hunch.  That’s was all–just a hunch–that the market was about to drop.

My spouse didn’t really believe in an English major’s hunches and he talked me into delaying my decision to sell for a few more weeks. I watched.  I eyed the stock market,  uneasily, every day for the next three weeks. But nothing happened.

Finally, my intuition was screaming at me, “SELL IT NOW!”

And I would have.

But before I could sell it, on my break at work, I got the call from back home that my dad was being rushed to hospital for bypass surgery for a heart bypass. Not once in the next six weeks did I think about my mutual fund, even though I had plenty of time to research and take care of matters while I sat in the ICU waiting room and later by his bedside. It was the farthest thing from my mind. I let emotions take over.

Those were pre-smartphone days, and I wasn’t checking the internet or stock apps on a daily basis. By the time I stopped haunting hospitals and checked the status of that mutual fund, the value had dropped by 75%.

Years later, a week before a very emotional breakup with the new man in my life, I moved all of my riskier investments in my retirement fund to a more conservative account with the intent of re-investing in a different account later in the week.  Later in the week, my retirement and my finances were the last thing on my mind.

Again.

With my heart breaking, the last thing on my mind was money.  By the time I pulled myself together, I lost an opportunity I had been waiting for–one that could have put a quick 20K in my retirement fund. An opportunity I spent months researching and waiting for.

I’m grateful I didn’t lose any money as a result by failing to move on time. At least I had that.

Heartbreaks, accidents, death, and other major stresses happen in life. They always have; they always will.

And while we can’t always prepare for them or foresee them, it does help to keep in mind, when we’re going through them, not to let go of everything in our lives in favor of nursing of our emotional devastation. It doesn’t take long these days to watch our finances or even to have someone else help us watch them so that we don’t miss an opportunity or make a mistake while we’re walking through emotional molasses.

Sure, finances may be the last thing on your mind when emotions are turbulent, but it’s important not to take your eye completely off the financial ball because one day those finances will be important to having a life that has more joy, comfort, and ease.