Can Emotional Intelligence Help you Manage your Money?

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Emotional intelligence is a vital skill, one that is rapidly growing in importance. More and more people are using its application in a variety of settings, ranging from workplace performance and leadership success. However, emotional intelligence is not simply for job seekers, leaders, or hiring managers. Nearly anyone can benefit from the advantages of emotional intelligence and apply it to a variety of purposes. While not typically associated with emotional intelligence, money management is a vital skill for everyone and can greatly benefit from this quality.

The Connection between Emotional Intelligence and Money Management

Emotional intelligence, largely introduced by Daniel Goleman, is the ability to perceive, understand, and manage the emotions of both oneself and others. This quality is mainly distinguished by two different categories, personal and social competence. Personal competence mainly deals with the ability to identify individual emotions and manage your own interactions. On the other hand, social competence determines the individual’s ability to understand moods, behaviors, and actions of those around you.

Given these qualities, it may be confusing to understand the connection between emotional intelligence and money management. However, there are a variety of ways in which a high EQ can help individuals make better choices and wisely manage their investments. The following are examples of how emotional intelligence can help anyone manage their money:

Self Awareness:
Self awareness is a major characteristic of emotionally intelligent individuals, which helps them perceive their own emotions as it arises. However, this skill goes deeper than identifying when you are mad or sad. Those with a high emotional intelligence are able to perceive needs, urges, and desires in relation to their behavior. For individuals who are struggling with money management, this skill can better help them understand how emotions play a role in their purchasing decisions.

Emotion Management:
Many times, we buy goods or items out of impulse or uncontrollable urges. These decisions put a strain on our wallet, leading to poor financial control and money management. However, individuals with emotional intelligence are not only able to stay aware of their emotions, they are also able to manage them. With emotion management, individuals can resist any hasty decisions and make better choices when it comes to spending and money.

Social Empathy:
Do you share finances with a significant other? Perhaps you’re a parent, responsible for teaching your children the importance of good money management? Regardless of your position, the topic of money management can be a difficult matter to discuss. However, with social awareness, a critical skill of emotional intelligence, individuals can accurately pick up on emotions of others and understand their decision making process.

Relationship Management:
On a regular basis, we deal with individuals who are in charge of managing and handling our money. Bankers, accountants, cashiers – there are a variety of parties whose interactions deal with the transaction of cash. However, if the individual is unable to maintain good relationships with these parties, the disadvantages may come out of the wallet. Emotional intelligence helps individuals manage their interactions with others and influence a favorable outcome. Not only will this help personal money management, it will foster a relationship with the parties in charge of our cash.

This guest post was submitted by Sara Fletcher who is interested in  emotional intelligence (EQ) and understanding how it affects her life. She loves to explore psychology, business, and sports in relation to the results of her eq test.

Photo Credit: articles.nydailynews.com

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