How does Emotional Intelligence Influence Decision Making in Women?

“It is very important to understand that emotional intelligence is not the opposite of intelligence, it is not the triumph of heart over head - it is the unique intersection of both." - David Caruso

Insights from a Certified Money Coach:

Let’s talk about emotional intelligence (EQ) - the not-so-secret sauce to navigating relationships, both personal and professional.

But what if I told you that your EQ also has a direct impact on your financial decision-making?

That’s right - your emotions and how well you manage them play a huge role in how you handle your money.

For women over 40, juggling careers, families and the pressures of being the first in the family to break through financial ceilings, mastering emotional intelligence is key to achieving financial success.

In this post, we’ll dive into how emotional intelligence affects your money choices, how to identify emotional triggers that might be sabotaging your finances, and actionable steps you can take to make more confident, grounded decisions about your money.

What is Emotional Intelligence and Why Does it Matter?

At its core, emotional intelligence is the ability to recognise, understand and manage your emotions, as well as the emotions of others.

This skill is crucial for everything from navigating relationships at work to raising kids.

But when it comes to money? EQ is the game-changer.

Let’s face it: Money is HUGELY emotional.

Whether you’re feeling anxious about retirement savings, getting started with investing, frustrated by debt, or excited about an upcoming vacation splurge, your emotions are constantly influencing your financial decisions. Being aware of this - and learning to manage your emotions - can mean the difference between financial peace of mind and a constant state of worry.

How Emotions Can Influence Financial Decisions

Your emotions shape the way you spend, save, and invest.

The good news is that once you recognise this connection, you can start to make smarter, more intentional financial choices.

Here are some common emotional patterns that influence financial decisions:

Fear of Scarcity

Many women, especially those who didn’t grow up with wealth or financial stability, have a deep-rooted fear of running out of money.

This "scarcity mindset" can lead to financial hoarding (over-saving and under-investing), hesitance to spend even on necessary things, or paralysing indecision about financial moves like investing.

Scenario:

You’ve been offered a new job with a higher salary, but you’re hesitant to leave your current, secure role. Even though this new position offers better pay and growth potential, your fear of the unknown is holding you back.

Solution:

This is where emotional intelligence kicks in. Recognise that the fear you feel is normal but not necessarily rational. Acknowledge it, but don’t let it stop you from making decisions that could lead to financial growth. Journaling about your fears, talking to a mentor, or seeking guidance from a money coach can help you navigate these feelings.

Impulse Spending as a Stress Relief

We’ve all been there - online shopping after a long day at work because it just feels good.

For professional women managing careers and families, the weight of responsibility can be overwhelming, leading to impulse purchases as a form of stress relief.

This emotional spending can sneakily derail your financial plans if you’re not careful.

Scenario:

You’ve had a rough week at work, so you decide to treat yourself to an expensive weekend getaway. You know it’s not in your budget, but the thought of a little escape feels worth it - until your credit card bill arrives.

Solution:

Emotional intelligence helps you understand why you’re making these choices. Next time you feel the urge to splurge, pause and ask yourself: “Is this purchase going to solve my stress long-term, or is it a quick fix?” Instead of impulse shopping, consider alternative ways to manage stress - exercise, meditation, or even a cheaper "treat" that doesn’t bust your budget. A money coach can help you create strategies to navigate these emotions without sacrificing your financial goals.

Avoiding Tough Conversations

Money can be a tough subject, especially in relationships.

Whether it’s with a partner, a business colleague, or even your kids, avoiding those tough conversations about money often leads to poor financial decisions.

Many women tend to delay important discussions about budgeting, spending, and saving because they don’t want to “rock the boat” or cause conflict.

Scenario:

You and your partner have different views on money. You’re a saver; they’re a spender. Rather than addressing the issue head-on, you’ve been quietly covering their spending habits with your savings. The result? Resentment, anxiety, and a growing financial imbalance.

Solution:

Emotional intelligence helps you manage difficult conversations with empathy and clarity. Instead of letting emotions fester, set up a time to talk about your financial goals and differences. Be open, listen actively, and set shared goals you both agree on. In some cases, working with a financial mediator, such as a money coach, can help facilitate these conversations and create a financial plan that works for both of you.

Ways to Improve Your Emotional Intelligence Around Money

Now that you know how emotions can influence your financial decisions, let’s talk about how to level up your emotional intelligence to improve your money management.

Identify Your Money Triggers

Do you feel anxious when checking your bank account?

Does talking about money with your partner make you uncomfortable?

These are emotional triggers.

The more aware you are of what sparks negative emotions around money, the better you’ll be at managing them.

Take note of when you feel stressed, angry, or overwhelmed about money.

Is it when bills are due?

After a major purchase?

Understanding these triggers is the first step toward building emotional resilience.

Challenge Negative Beliefs

If you’ve always believed that “money is hard to come by” or “I’ll never get out of debt,” it’s time to challenge those beliefs.

These limiting beliefs often stem from childhood or past experiences, but they don’t define your future.

Write down your negative money beliefs, then write a positive alternative.

For example:  

- “Money is hard to come by” becomes “Money flows to me through my skills and efforts.”  

- “I’ll never get out of debt” becomes “I am actively working toward financial freedom.”

Affirmations are SUPER powerful tools in reshaping your money mindset. Use them! Often!!

Practice Delayed Gratification

Impulse spending often happens because we want instant relief from stress or a boost of happiness.

But emotional intelligence means thinking long-term.

Instead of giving in to the impulse, delay your gratification.

Give yourself 24 hours before making any significant purchase.

This helps you make a more rational decision.

Set Healthy Boundaries

Whether it’s with a partner, children, or even yourself, setting financial boundaries is a must.

If you’re often the one to “pick up the tab” or cover for a partner’s spending, it’s time to establish limits.

Clear communication is essential here.

Set boundaries on what you’re willing to spend and stick to them.

If it feels difficult, remind yourself that setting boundaries is an act of self-care - it’s about protecting your financial health.

Practical Steps for Financial Growth Using EQ

So, how can you actually put all of this into practice?

Here are some practical steps you can take to make financially savvy decisions by leveraging your emotional intelligence:

Automate Your Savings

One of the easiest ways to reduce the emotional toll of financial decisions is by automating them.

It's the classic "set and forget".

Set up automatic transfers to your savings and investment accounts.

This eliminates the emotional friction of deciding whether or not to save each month.

Create a Financial Check-In Routine

Make checking in on your finances a regular, non-emotional habit.

Once a week, sit down for 30 minutes to review your budget, savings, and spending.

This will help you stay on top of your financial goals without letting emotions drive your decisions.

Link the event with something nice - like the time of the week you take yourself out to a sunny spot for a nice pot of tea or splurge on a coffee in your favourite café - that way you'll be more inclined to follow through on it from week to week, so that the habit sticks!

Work With a Money Coach

If you’re struggling with emotional spending or navigating financial decisions with a partner, working with a money coach can help.

A coach provides an objective, non-judgmental space to work through your money emotions, develop a plan, and hold you accountable.

Plus, a coach can help you spot emotional patterns that might be sabotaging your financial growth and give you tools to overcome them.

Real-Life Examples of Emotional Intelligence in Action

Let’s explore a few scenarios where improving emotional intelligence can lead to better financial outcomes.

Scenario 1: Overcoming the Fear of Investing

You’ve always avoided investing because it feels risky and intimidating. You fear losing money, so you stick to saving in a low-interest account. After working on your emotional intelligence, you realise that this fear is rooted in a scarcity mindset. You start small, investing in low-risk index funds, and gradually build confidence. A year later, you’re proud of the financial growth you’ve achieved.

Scenario 2: Navigating a Financial Conversation With Your Partner

You’ve been avoiding a tough conversation with your partner about their spending habits. After learning about emotional intelligence, you decide to address the issue calmly and with empathy. You sit down together, share your concerns, and create a joint financial plan. Your relationship improves, and you both feel more in control of your finances.

Take Control of Your Financial Future

Emotional intelligence isn’t just about understanding your feelings - it’s about using that understanding to make better, more empowered decisions.

By building your EQ, you can overcome emotional spending, challenge limiting beliefs and make confident choices that align with your financial goals.

And if you’re ready to take your financial journey to the next level, why not work with a money coach?

Book a call and we can share a virtual cup of tea and see if we would be a good fit for each other.

Together, we can rewrite your money story, help you navigate your emotions and create a future where you feel in control and financially empowered.

Are you ready to make smarter, emotionally intelligent financial decisions?

Let’s get started!

While you’re here, be sure to snag my free workbook, Map the Gap.

It’s designed to make money goal setting a breeze - so easy and effective that it’s perfect for building into your regular routine. Even if you’re just dipping a perfectly polished toe into the world of Money Coaching, you’ll find it simple to dive in and get started. Trust me, the results will be so fabulous you’ll be amazed!

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