Money and our Emotions

We all have emotional baggage tied to our money issues. Shame, embarrassment, pride, guilt, confusion, fear, apathy. All of these emotions are very personal and can have a big impact on how we approach our money. In a lot of cases, our emotional baggage can cause us to act in ways that, to an outsider, might seem very strange.

I bring this up because I’m currently facing a 1st-world money problem. My current car is a 1998 Honda Civic. I’ve had it since I was 17, when my extremely generous grandparents gave it to me as a birthday present. It had only 12,000 miles on it at the time. And they just gave it to me, no strings attached.

It’s now 11 years later and that car is at 137,000 miles and starting to fade. It really should be able to last a lot longer, but being young and stupid I didn’t take great care of it those first few years and I’m paying for it now. It’s needed a lot of repairs recently, and I’ve been looking into replacing it. My wife and I have saved and we have the money available to buy a moderately priced used car.

So here’s my “problem”. My Nana, the same woman who gave me the Civic I’m still driving today, just turned 90. She’s now very close to making the decision that she shouldn’t be driving anymore. And she has a Subaru station wagon with 50,000 miles on it that she’s thinking about offering to me, no strings attached.

Objectively, this is really just amazingly good fortune. I have a near-term need for a new car and we’ve been looking for something a little more family friendly. Rather than having to shell out several thousand dollars and invest the time to shop around, we have an amazingly generous offer from my Nana, who just wants to help out someone she loves.

So what’s the problem? My emotional baggage. My very first reaction when I heard the offer was guilt. Not gratitude. Not relief. Not excitement. Just guilt. For whatever reason, I’ve been more aware recently of the things that I’ve had handed to me in my lifetime, and while I’m extremely grateful for them, there’s also a part of me that feels like a child. After all, if I’m an adult, I shouldn’t need to have these things handed to me. I should be able to take care of myself, and part of taking care of myself is doing what most everyone else does when they need to replace their car: buy one.

The problem here is that this isn’t a rational, objective evaluation of the facts. The facts are that my wife and I have been responsible and we do have the money to replace our car with a cash purchase. But we also have a family member who needs to get rid of her car and would like to offer it to someone she loves. And if we accept, that frees up a big chunk of money for us that can be used for another purpose, such as the future purchase of a home or the replacement for my wife’s car that we’ll probably need in a few years. Accepting my Nana’s generous offer would fulfill her desire to do something nice for someone she loves and would allow us to put our money to other goals. It’s really a win-win.

We all have emotions that come into play when we deal with money. It’s important to understand what our emotions are and how they might bias our actions. If we can separate our emotions out, we’re much more likely to make decisions that positively impact our financial future.

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1 Comment... Read it below or add one of your own
  • Matt Becker February 18, 2013

    Hey Joel. No official offer yet, just a discussion. I’ll definitely let you know the conclusion though. Thanks for reading!

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