Emotional Intelligence in Personal Finance

Posted in Investment By Bajaj Markets-
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We have all come across individuals who have a robust financial status but somehow emotionally disconnected. On the other hand, we have also met individuals who don’t have a lot of money but have a very high emotional quotient.

As per several entrepreneurs and business leaders, most of us are trained to keep our financial success and emotional success separate. However, as time goes by, it is getting all the clearer that our dominant feelings determine the success level that we experience, both financially and emotionally.

Before we set sail on our journey to understand financial emotional intelligence, ask yourself, what does it really mean to you?

It is important that we live within our means, which in turn suggests that we must spend lesser than we make. This is exactly what most of us think and believe in. It’s good to be financially responsible but that is not equivalent to being financially emotionally intelligent.

Financial emotional intelligence is all about comprehending what exactly we feel about money and why do we feel it? Unless we determine what money means to us, we cannot take ideal personal finance decisions. Let’s try and understand this better.

What was it that you spent on right before reading this blog? Maybe you bought a latte for yourself. Maybe you bought a new phone or hired an employee for your company. Whatever the decision maybe, did you really stop and think how exactly did you feel when that transaction happened?

Whenever there is a monetary transaction, we inevitably make the decision emotionally before being all rational about it. It is extremely important to be self-aware. The belief or feeling that you have about money will lead you to a specific financial decision, whether that personal finance decision was a success or not.

EQ + IQ = FQ?

When your Emotional Intelligence Quotient is coupled with IQ, it can power up your Financial Intelligence Quotient.

  • You will not just look at numbers. You will be able to put them in context, understand the background, and use all information to recalibrate your approaches and goals for better financial planning.
  • You will be able to assess your liabilities and assets. It is crucial to know the difference between your wants and needs. Thus, avoiding buying liabilities that can affect your personal finance goals in the long-term is important.
  • With your financial emotional quotient, you will not only map your goals, but also commit and develop plans of action.
  • You will be able to take strategic decisions by realizing that small, unnecessary purchases keep piling on and may lead to huge repercussions.
  • You may set up auto-investing and auto-savings so that your retirement corpus looks good, and you have a cushion to rely on.

In order to manage your money better, do the following:

  1. Face your finance with lot of positivity and be confident about fulfilling your goals. It is important that you find your freedom from finance viewpoints that are constrictive. Avoid self-sabotaging at all costs when it comes to taking personal finance decisions.
  2. Focus on what can be controlled by you. This includes investing in stock market, mutual funds, in order to take better and logical financial decisions.


We all know and understand that working out on a regular basis helps us gain strength, endurance, and flexibility. Similarly, if you keep working on your financial intelligence, your financial well-being will also improve.

Now that you know how powerful your emotional decisions can be when it comes to money matters, think wisely before you take any decision associated with your personal finances.

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