MODULE 4:
Emotional and cultural
influences on financial
decisions
Everyone has situations where they know what they think they “should” do, but find themselves
doing something else instead – especially when it comes to money. For example, you may have
decided to save part of your tax refund to build an emergency fund. Instead, you use it to help a
family member pay down his medical debt, because not helping a family member pay off a debt
would go against the cultural norms you were raised with. Or, you may use it to splurge on
something you have wanted because you’ve been working hard and making this splurge for
yourself or family feels good.
Financial decisions, no matter how well intended, are never made in a vacuum. Many things
influence both our short- and long-term financial decisions. This module focuses on two
influences on financial decision-making: emotions and culture.
Emotional influences on financial decisions
When people talk about money, it’s not just about the numbers—what they are really discussing
is what money means to them. Attitudes and behaviors around money are wrapped up in
feelings around security, failure, family, love, and status. It’s important to observe your clients to
try to determine their emotional reactions to money and its meaning, and integrate their
emotions and feelings into your discussions about their finances. If someone is “upset or rattled