Finance Fingers

Decoding the Psychology of Personal Finance Judgment

In our daily lives, personal finance literacy (our knowledge, attitudes, and skills) plays a role in every purchase we make. It’s stealthily present when you’re debating that extra pump of vanilla syrup or contemplating the cosmic significance of a new pair of sneakers.  And in this world of financial decisions, there’s an element that often goes unnoticed but has a significant impact — judgment.

When we see someone buy the newest thing, our minds race to have an opinion about it. “They went all-in on that?” or “How much did that cost, a spaceship?” But hey, sometimes judgment is more friendly, and you find yourself thinking, “That’s surprisingly budget-friendly….ish.”

Navigating personal financial judgment is like walking a tightrope. Passing comments about someone’s spending can be misunderstood, so remembering that “it’s the thought that counts” becomes crucial. I’ve been there too, silently evaluating the spending choices of others and I have to remind myself that personal financial decisions are subjective and there’s no right or wrong; it just is.

Understanding the Psychology of Spending

Diving into why we judge others’ spending reveals an interesting perspective. Our views are often shaped by societal norms, personal values, and our own/ family’s financial experiences. These views are then put together into internal and subconscious judgments that live in our minds. Pyschologicalscience.org states that “Before we can finish blinking our eyes, we’ve already decided whether we want to hire, date, hate, or make friends with a person we’re encountering for the first time…. And all of this happens outside of our awareness, in the unconscious processes of the mind, research shows.” Trying to categorize spending as good or bad might come from a need to make sense of a world that feels chaotic as if this subconscious entity that exists within us isn’t chaotic enough.

Realizing that our views are subjective helps us approach spending with curiosity rather than judgment. People’s spending habits might be influenced by culture, personal goals, or tough times. Shifting from judgment to understanding the stories behind spending choices is key, even if they themselves admit their spending is a little everywhere.

Breaking the Myth of Normalcy in Money Matters

Just like there’s no “normal” in life, personal financial decisions don’t fit into a neat box either. Each person’s financial journey is unique, and shaped by different factors. Instead of comparing ourselves to an idea of what’s “normal,” appreciating the diversity of financial choices creates a healthier relationship with money itself. Not only does breaking the myth of normalcy improve your relationship with money but also helps with personal relationships with others.

Fostering Empathy in Personal Financial Decisions

To break free from judgment, we need to actively build empathy.  Everyone is figuring out personal finance in their own way, influenced by their circumstances. By understanding this, we can create a more supportive community that appreciates the richness and diversity within personal finance.

I will leave you with this last piece of wisdom: personal financial judgment is a complex interplay of thoughts influenced by society and personal biases. Embracing empathy, recognizing the diversity in financial journeys, and changing our internal dialogue allow us to navigate personal finance with a deeper understanding.

But don’t judge me on my “need” to buy socks every few months since they just happen to disappear.