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What This Online Financial Coach Wants You To Know About Emotional Decision Making

A foggy, flat, paved path surrounded by blossoming cherry trees. A metaphor for emotional decision making.

I don’t need to tell you how important decision making is to your life.  And I don’t need to tell you just HOW MANY choices you have to make and how overwhelming it can seem to be constantly needing to make the right choices.  And every choice you make, directly or indirectly is a financial choice, which only layers on the stakes and potential for failure.  It’s kind of a wonder we can make any decisions at all!  So let’s talk about why emotional decision making is damaging and what you can do instead.

Approximate read time: 7 minutes

You just have to figure out the correct choice

Maybe you got the same messaging I did as a kid… namely that our decisions should be totally unemotional and logical.   (eyeroll)  This black-and-white binary way of breaking up the world into good and bad choices is deeply simplistic and counterproductive.  

When we try to solve for good-or-bad, logical-or-emotional, black-or-white, we lose the ability to account for all the mess and beauty that is our lives.  Understanding the world only in terms of right-or-wrong is deeply juvenile, and also deeply emotional.

Sure, it’s easy to declare something right or wrong, but it’s superficial.  I don’t want my clients, you, or anyone to live a life so simplistic and frankly boring that you could reduce everything in your life to good or bad.

And once we declare a decision as good or bad, we tend to get emotional and defensive.  Why?  Because the correct way is the safe way.  And we’ve all gotten the message, at some level, that if you could just figure out the right answer and make perfect choices, you’d be safe.  But this lie of perfectionism is, again, deeply emotional, and deeply simplistic.

If you and I are trying to make a decision together and I know that my way is the correct (logical) way, whatever your way is will look unsafe and wrong to me.

There is a difference between emotional decision making and decision making that includes emotion.

What is emotional decision making?

Emotional decision making is incredibly fast.  It is reactive, and again, means we’re typically solving for just one thing.  That one correct way is the safe way, so then we get emotionally invested in the correct way to do things and cannot see other options.

Let’s listen to a conversation that our old friends Sam and Mo are having as they shop for a couch online:

The “right” couch is out there, they just have to find it, right?

Sam: Hey look, this one would fit great in the living room, and it’s in our price range.
Mo: Is it comfortable?

Sam: I don’t know, we could read reviews, or see if we can find it in a showroom.

Mo: Yeah let’s do that. It doesn’t matter how much it costs if it’s not comfortable, right?

Sam: Yeah, but if it’s not in our price range it doesn’t matter how comfortable it is because we’re not getting it, right?

Each partner is solving for one thing. Sam is solving for price, Mo is solving for comfort.

I imagine if you’re playing out the rest of this conversation in your head between these two fictional people it probably got pretty tense right away. Both of them think they are solving for the only right thing, and both can’t understand why the other can’t see reason.

But even if we aren’t in conversation with someone, the conflict between right and wrong persists, even if it’s just our conversations with ourselves.

Outcomes of emotional decision making

Besides just being lighting-fast, emotional decisions are typically present-focused rather than future-focused and heavily driven by strong emotions (anger, fear, hurt, resentment, disgust, etc)

Frequent emotional decision making means we live with a lot of regret because it is difficult to look at past choices and use those as a framework for future decisions.  All we can see is that we did not make the magically correct choice.

Emotional decision making also destroys connection and trust between you and anyone you’re trying to communicate with, but the biggest downfall of emotional decision making is that it reinforces to you that you cannot be trusted.

So what can you do instead?  

Include emotions in your decision making

Making decisions that include emotions leverages our emotions rather than shuts them out.  Emotions are tools and are critical to our decision making.  By using them instead of shutting them down, we can end up making better, more future-focused decisions.

Here’s an example from my own life.  As of this writing (June 2024) I’ve been without a pet for over a year.  But prior to that I had two elderly, special-needs pets in my life.  Daisy dog died June of 2022 and Tank the cat died March of 2023.  I miss them both every single day, but I have been hesitant to get another pet.    Why?  

Because my heart is still broken, and because taking on a pet means guaranteed heartbreak in the future, at least for me.  So after Tank died, I told those around me that I was not in the market for a new pet and probably wouldn’t be for quite some time.  I asked that folks not tell me about the cute kitten they saw at the rescue or the senior dog who needs a retirement home.  (I have a soft spot for senior animals and big dogs)

So I’m sure you can predict that not too long after that, one of my dearest friends asked if I could take an 18 month old mastiff who needed to be rehomed.  And then, the worst thing ever, she sent me pictures of the biggest ol’ pupper you’ve ever seen.  I was smitten.

What’s the emotional decision here?  Well I’m in the car and I’m out the door and don’t you dare tell anyone else about this dog!   This checks all the boxes of an emotional decision, right?  It’s fast, it’s motivated by a singular, deep emotion.

Let’s change things up a bit

Instead of trying to inject reason or whatever amounts to logic in that moment, let’s just add a competing emotion.

The first competing emotion that popped into my head was that I was still grieving, and was I really ready to love another dog?  

The second competing emotion was concern.  At the time I was prepping to move an hour away back to my home town to be close to my folks.  A mastiff, full grown or otherwise, would dramatically reduce my choices in rentals.  Or would I need to buy a home?  Am I remotely in the mood for a house search? (No, I am not)

As a result of adding in those competing emotions, ultimately I decided not to adopt the dog, but I’m happy to report that he’s found a lovely forever home and I chose to dip my toe back into the pet world by adopting a jumping spider.

Regal jumping spider named Rockette, belongs to Hanna Morrell, holistic financial coach.

Ok, back to decision making that includes emotion!

Outcomes of decision making that includes emotion

The first thing you may notice as you include competing emotions is that you slow down.  

Even without a full assessment of values, risks or other options, we can immediately  slow down decision making and add some complexity.  

One other thing about including competing emotions into our decision making is that it is not nearly as satisfying as emotional decision making.  We’re leveraging something called ambivalence, or being of two minds about something at the same time.  And while this means we aren’t taking quick action, we’re also increasing the likelihood that we will make better, future-focused decisions.

Including competing emotions into your decision making also increases self awareness, specifically self awareness WITHOUT shame or judgment.   Gentle, honest self awareness is critical for trusting ourselves and resilience.

Lastly, including competing emotions reinforces that we are not, in fact, evaluating you, we are evaluating the choice at hand (couch, dog, spider, whatever).

In conclusion

Telling ourselves we are solving for the logical or correct choice is profoundly simplistic, and counterintuitively emotional.  But including emotions into our decision making means we are using them as tools, but also slowing down and improving our decision making.  Decisions made with competing emotions aren’t as satisfying or fast, but do a better job of helping us be self-aware, resilient, and make better future-focused decisions.

Next recommended article: Financial Imposter Syndrome