Numbers Vs Emotion in Money Decisions

One thing I truly love about reading y’all’s comments is they often make me think about things either in a new light or at a much deeper level than I had.  Here’s another great example, in Eric’s comment on my post Raiding Retirement - A Huge No-No:

… I would have to sit down and run the numbers - this isn’t an emotional decision, which I am afraid you have made it into …

I am all for running the numbers on most things, but there is one simple truth (for me, at least).  My emotions are tied to my money situation, and heavily influence my personal finance decisions.  For me, money equals security.  When I lived paycheck to paycheck, I lived with a fear in the back of my mind and in the pit of my stomach at all times.  What if the car broke down?  What if the gas (heating) bill came in higher than expected?  What if I got sick and had to miss work?

This feeling of fear and insecurity is why I am so anti-debt, and is the result of bad experience (and bad decisions).  When I was driving home on Decemeber 26, 2006 - knowing the trip was on a credit card and worried how to pay it - and heard of a better plan on the radio, it was of fifteen years of financial fear and frustration that motivated me to make such major behavioral changes my son wondered if I had joined some kind of cult.  These emotions also motivated me for fourteen long months to get out of debt.

These changes brought about another emotion that I had never associated with money: HOPE.  It’s another strong motivator, and one that drives me today.  HOPE that I will have a big enough emergency fund to cover whatever life throws at me.  HOPE that I will be able to retire comfortably, and not need to rely on VA disability or Social Security.  And best of all, HOPE that I can influence my son so he can truly have wealth and financial success in his adult life.

Money is a very emotional topic: for proof I point to the comments section of just about any personal finance blog where discussions often get heated (this one included).  Money - or lack of it - colors almost all of our daily decisions and touches our emotions.

I am sure there are folks who are able to make money decisions on a purely numbers basis instead of an emotional basis.  Obviously I am not one of them!  One of my favorite quotes is Dave Ramsey on the topic of saving up money for an emergency fund: “You will only save up money when it becomes VERY VERY IMPORTANT TO YOU!“  Guess what?  Eighteen months ago, getting out of debt and saving up money became VERY VERY IMPORTANT to me!

I can run the numbers for the most part … but for me money IS a very emotional thing, and the emotional component is what has kept me motivated to make major positive changes in my financial life.  Since this blog is about my experience with money and debt … it will have a strong emotional aspect to it.  Sometimes I will run numbers to back up a point I am trying to make, other times I will simply link to other people who are better at the numbers part of the money game.  But for me personally, money decisions are all about emotions and how well I will be able to sleep at night.

I will admit I am now curious.  Which is it for y’all, the readers?  Emotions or numbers?