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Psychology of Money - Heart Matters


4. Thoughts, Feelings and Behavior

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Many of us assume that we are born with hundreds of emotions that don’t change much over our lives.  Therefore, we must have hundreds of nervous system circuits for the hundred or so emotions we have words for… Right?
There’s little evidence that we have more than two or three emotions at birth.  Beyond fear, anger and love, we may not have any emotions in us at all.
If that’s true, then why do I have so many feelings, and why do so many of them affect how I manage money?  That doesn’t sound right.
Let’s examine a very common emotion – fear.  You open your mailbox and see a stack of letters on top of your junk mail, what do you feel?
Well, I’m certainly not afraid of the mail.
Of course you’re not.  Like most people, the mail itself does not paralyze you with fear.  Now say, as you’re rifling through the mail, you find a notice from the company that holds your student loan.  You may wonder, “Why would they be sending me a bill?  It can’t be time to repay my loan already!”  After calling your lender and learning about your borrower responsibilities, you discover some alarming news – this loan is like few others!  Not only are you responsible for repayment for the next 10 years, but the loan company, the loan guarantor and the federal government all have extraordinary ways—like taking your tax refunds-- of requiring you to repay it.
Okay, now I’m a little worried.
Imagine you get the mail again and you see another notice from your lender.  How do you feel?
Nervous, worried, maybe a little fearful.
And what caused you to feel fearful, the letter itself or the way you feel about the letter?
Well, the letter is just a letter right?  It must be how I felt about the letter that makes me fearful.
Exactly.  It’s what psychologists Stanley Schachter and Jerome E. Singer demonstrated in the 1960s.  It’s not what happens to us that makes us feel a certain way; it’s our perceptions of what happens to us that create our feelings.  The way we “see” an event determines how we feel about it.
All right Smarty Pants, you’ve got some explaining to do... 
Let’s say you got another letter in the mail and it was from your mom.  Your mom always puts a little money in her letters to you if she can spare it.  Do you respond the same way—have the same reactions, the same feelings-- about getting a letter from  your mom as you do from your lender?  They're both letters, right?
Right.  But I feel happy when I get a letter from my mom and worried when I get a letter from my lender.
Could you change how you feel or react to getting a letter from your lender?
I guess so.  I am happy to get a letter from my mom even if there’s no money in it.  When I get a letter from my lender, I can say to myself, “Oh my student loan payment must be due.  I have set aside the money I need to pay it so I am in good shape.”
Yep, you got it.
A letter is just a letter.
Exactly.  Your perception of the situation or "stuff" makes you feel a certain way.  But nothing made you feel any way; you chose to feel a certain way.  Happy when your mom sends money and happy when she doesn’t. In control of your student loan payment when it arrives even though it means money out of your pocket.
But, how can that be?  My feelings hit me immediately after something happens to me.  I don’t remember choosing anything.
Well, as we mature, we get so good at interpreting and anticipating events and people, we develop habits in the ways we think.  And, like all habits, we do mental habits in milliseconds. 
But, wouldn’t everybody feel some strong negative emotion after receiving a bill that seriously strains their budget?
Not necessarily.  It’s your thought, belief, opinion or expectation about the bill that causes your feeling of fear.  Maybe you could think about it this way: Could different people look at the bill differently?  Could they have different thoughts about the bill and different feelings about it?
Well, my dad would look at it as a new challenge.  “It looks like I’ll be working overtime to get this one paid off,” he’d say.  My sister, who’s in financial trouble, would say that she’d have to get another credit card to start charging.  My friend Marie would start calling her friends to get their advice.  She probably would avoid opening another letter from her lender.  She might even just toss the next bill.
Okay, although we can only guess, what three different emotions might these different people be feeling when confronted by the same event – seeing the lender letter?
Since my dad sees things like that as a challenge, he might actually enjoy seeing it.  My sister, she’d get mad,and then find a way to fight back by trying to “beat the system” by maxing out her credit cards through retail therapy.  Marie, well, I’m not sure, she seems to feel so afraid she does nothing but avoid taking responsibility for her debt.
Their decisions to feel a certain way, which is based on beliefs about the bill, comes on very rapidly and without much conscious thought.  That’s what I mean by a “mental habit.”  Some psychologists call such automatic thinking “self-talk.” 
Is that why we talk about our feelings in the wrong way?
What do you mean?
Well, we don’t say, “I decided to feel a certain way.”  We say things like:
• This hot weather makes me feel grumpy.
• She makes me mad.
• Getting stuff on sale is fun and makes me happy.
• When I get a letter from a bill collector, I don’t open it because it makes me feel like a loser.
You’ve got it.  Because we use this language, we start to believe that feelings are caused by events, that we have no control over.  So, how we feel, is caused by the event.  What we need to do is rewire our brains and mental habits to think: our own perception of the event causes us to be in a certain mood.  Not the event itself!  We have a choice over how we react to it! It’s not what happens to us but what we think about what happens to us that makes us feel a certain way.
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