We came home from a weekend away to find a puddle of water in front of the fridge. Opening the door, I unscrewed my coconut milk and it smelled a bit off.

The food in the freezer was cold, but completely unthawed. Great! Bags full of groceries for the week and company coming for dinner in a couple hours. No place to keep things chilled. Even worse – no ice for cocktails!

My Emotions Took Charge

I immediately went into emotional panic overdrive. I called my neighbors – did they have room for the freezer food? Going through the fridge, nose on high alert, was anything salvageable?

I looked at the dinner menu and discerned on how to make it happen. We could have called our guests and cancelled or gone out to dinner – but I wanted to cook, and we needed to eat this food.

We divided up the cold, but unfrozen, food amongst the neighbors, and I frantically asked my husband to go buy a cooler and dry ice. “Just get a good, big one,” I exclaimed as I started unpacking bags and prepping our evening meal.

He came home with a large, heavy duty cooler, which pretty much cost as much as a new refrigerator. I forgot to have him get a bag of ice (for cocktails), so back out he went. Is it starting to sound like a crazy evening to you?

In Hindsight

Our dinner and evening with friends turned out lovely. When all was said and done, and we had some time to step back, I began to think about how my emotions hijacked my financial decision-making process. Was running out and buying a big, expensive cooler the best way to deal with our situation?

The repair person couldn’t come look at it for a week, and who knew how long it would take to fix it (if it is repairable). We needed to come up with a creative solution. We didn’t need a lot of space, just keeping day to day stuff cool.

Creativity Kicked In

I posted our first world problem on Facebook and a boating buddy offered to lend us his large cooler. Or, we could use the non-working freezer as a fridge. We could freeze containers of water at our neighbors and alternate them daily. We got resourceful and figured it out.

This impulsive purchase wouldn’t have a huge impact on our life. We actually took the very large and expensive cooler back, exchanging it for a smaller one that better suited our weekend day trips and summer grocery store runs.

Keep Your Emotions Out of Financial Matters

However, there are bigger financial decisions that get made under emotional duress. It would be better to not let the limbic brain (emotional) get the better of us – especially when the consequences are irreversible or have long-term impact.

Here are 3 steps I think will help you toward making better financial decisions.

Ponder Your Situation Carefully

Acknowledge that this is how are brains are hard wired – to reflex instead of reflect. Understanding that anxiety clouds our thoughts and judgement when we are stressed and how it hijacks our rational thinking is the first step.

When it comes to money, fear and greed are emotions easily triggered. Listening to the pundits talking about the stock market? “OMG – the sky is falling! I need to get out!”

Thinking about when to take Social Security? “The government may go broke – I need to take it ASAP!” or “I haven’t saved enough for my golden years – I need to get in on this new investment.” These are all emotionally charged decisions that have huge long-term implications.

Pause Before Making a Crucial Decision

Catch yourself entering into an emotionally charged situation with financial implications. When you are faced with financial decisions, from an unanticipated purchase to a major life event, take five and think twice.

It may be a few minutes or an hour. Take a couple deep breaths or a walk to clear your head before heading to the store or hitting the purchase button.

Halt and examine your current state of being. Are you hungry, angry, lonely, or tired? These will impact your financial decisions.

You may need a “time out” adjustment period after a divorce, a death, or a job shift. There are no financial decisions that need to be made when you are emotionally charged.

Process and Plan Your Steps

You can be proactive in many areas of your financial life. The larger the financial decision, the more your emotions will want to take over. But there is a lot at stake.

It is imperative that you tap into the pre-frontal cortex, the rational – foresight, hindsight, and ultimately insight – area of your brain. Take time to chart your course, lay out your options, educate yourself about implications, and balance out the emotional and rational parts of your brain.

If warranted, get competent, collaborative, fiduciary advice. Find someone who will walk alongside you, recognizing and validating the emotions, but bringing in the rational side to help you discern your options.

Good financial decisions will be aligned with what is important to you and leave you feeling at peace and in unison with those around you.

It took a faulty fridge to remind me of how easily we can get off track with our emotions. I was also able to reflect on my gratitude for good neighbors, friends, and working appliances.

How often do you allow your emotions to dictate your financial decisions? Do you have a procedure to navigate through the emotional overflow and into the rational part of your brain? What strategies work for you? Please share with our community.

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