How Understanding Your Money Emotions Can Transform Financial Decisions

Why Your Money Emotions Matter

Money is more than just a means of exchange—it’s deeply tied to our emotions, decisions, and even our sense of self-worth. According to Mary Clements Evans, a certified financial planner and author of Emotionally Invested: Outsmart Your Anxiety for Fearless Retirement Planning, understanding the emotional drivers behind your financial choices can be the key to smarter money management. Whether it’s fear of missing out (FOMO) or fear of running out (FORO), these emotional triggers often dictate how we save, spend, and invest.

Evans explains, “The smartest, most well-educated people make poor financial decisions because their money why is not in a good spot.” By identifying your “money why”—the underlying reason behind your financial actions—you can start making decisions that align with your long-term goals rather than impulsive emotional reactions.

FOMO vs. FORO: The Emotional Tug-of-War

Evans categorizes money emotions into two primary drivers: FOMO and FORO. People driven by FOMO are hyper-focused on the present, prioritizing immediate gratification like vacations, luxury purchases, or home renovations. On the other hand, FORO individuals are fixated on the future, often consumed by fears of not having enough for retirement or emergencies. While both mindsets have their merits, they can lead to financial imbalances if left unchecked.

“Most people have shades of both FOMO and FORO,” Evans notes. Recognizing which tendency dominates your financial behavior can help you strike a healthier balance between enjoying the present and securing the future.

The Shift in Retirement Planning

Retirement planning has undergone a seismic shift over the past few decades. Once dominated by employer-sponsored pensions, the responsibility for saving has largely shifted to individuals. Evans highlights how this transition has left many Americans overwhelmed and underprepared. “You’re busy doing your job, raising kids, maybe taking care of parents. And in your spare time, you’re supposed to have complete knowledge about the most complex system there is on earth,” she says.

With extended lifespans, saving for retirement is no longer about funding a few golden years—it’s about ensuring survival for potentially 20 or 30 years post-retirement. Evans emphasizes the importance of starting early and saving consistently, even if the goal feels daunting.

Removing Shame and Blame Around Money

One of Evans’ core messages is the need to eliminate shame and blame from financial conversations. “Shame doesn’t work,” she asserts. Many people, regardless of their income or education, feel guilt or embarrassment about their financial choices. This emotional baggage often prevents them from seeking help or making proactive changes.

Evans encourages individuals to focus on empowerment and education. “It’s never too late to become smarter savers and investors,” she says. By understanding your money why and addressing emotional barriers, you can take control of your financial future.

Finding the Right Financial Adviser

Navigating the world of financial advice can be tricky, especially given the lack of standardized qualifications in the industry. Evans recommends seeking advisers with reputable certifications, such as the Certified Financial Planner (CFP) designation, which requires rigorous training and ongoing education.

“The most important thing people need to realize is that in our industry, there are no standards,” Evans warns. Doing your homework and asking the right questions can help you find an adviser who aligns with your needs and values.

Final Takeaway: Empowerment Through Understanding

Evans’ ultimate goal is to help people feel empowered rather than overwhelmed by their finances. By identifying your money why, addressing emotional triggers, and seeking the right guidance, you can make decisions that lead to a more secure and fulfilling financial future.

As Evans puts it, “Removing shame and blame is a good thing. And it’s never too late to be empowered, become smarter savers and investors, so you can ultimately enjoy a more secure and worry-free retirement.”

Understanding your relationship with money isn’t just about numbers—it’s about emotions, habits, and the stories we tell ourselves. By taking the time to explore these deeper connections, you can transform your financial life for the better.