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Financial awareness: the application of emotional intelligence in finance

"Lack of money is never a problem. Lack of money is simply a symptom of what is going on inside you".
T. Harv Eker

It is said that money does not buy happiness, but it does buy food, houses, transport, leisure and it is used to organise future projects. Therefore, earning or losing it can make a big difference in life and, consequently, in our happiness. Western society has programmed us to live "the dream" with all its elements and details but, at the same time, it has taught us not to talk about money. It is something that is not done: what we are supposed to do is simply to pursue more and more.

Today, many of our concerns are related to work and finance as capitalism has built our lives on a system where bartering hardly works anymore, where everything costs money, where without money we cannot afford to survive and where it seems that you are more the more you have.. The current trend of consumerism has its raison d'être in the possession and accumulation of things and does not only affect the most active consumers. We do not buy just out of necessity or survival: we are bombarded with advertisements and, thanks to the Internet, buying and consuming things is convenient, quick and easy and increasingly accessible.

However, what not all of us are aware of is that money has a much greater value than its monetary value: it is a reflection of emotions and, if there are economic problems, we can say that money is the effect and not the cause.. Problems on the outside come from problems on the inside. Relationships, food, health, sport, work, sex... are all aspects of life where problems give us information about our relationship with ourselves. There are really no problems, but there is something to solve, but we look at the problem and not the cause, so we don't give it a solution.

Only the desire to learn can lead to sustainable change over time. When we see clearly, we can decide. When we observe what happens, we can decide. Money says a lot about our relationship with ourselves, our desires, needs, fears and more. When we explore our relationship with money, we discover more about ourselves. When we analyse our relationship with money without judgement, we can gain important information about ourselves and how we live our lives..

The good news is that we can create a freer and healthier relationship with money.. Like everything else that prevents us from evolving, we need to explore, to know ourselves and to detect those situations or factors that can negatively affect the decision-making process related to money. This work can help us to better understand not only the financial situations we perpetuate, but ourselves. Understanding why we save most of what we earn and do not allow ourselves to enjoy money or life, or why we spend absurd amounts on things we do not need, can give us a lot of information about ourselves that can help us understand, accept and improve ourselves.

Until we are aware of what is wrong, we cannot change the current situation. Consciousness is the ability to recognise and perceive reality; it is what differentiates us from animals and machines. Being conscious is the path that opens the door to knowing who we are and from there to access true transformation. Only when we know how we are, what conditions us and what drives us, can we take actions that lead us to change what we are not comfortable with.. It is about recognising and perhaps not changing, but transforming.

A key element of emotional intelligence is to be constantly aware of our feelings and emotions in order to keep them under control and understand how they affect us on a daily basis. When we let an emotional reaction cloud the decision-making process, perception becomes distorted. As a result, we make mistakes we would not otherwise make.

It is not a question of knowing a lot about economics, being a mathematical genius or knowing all financial products in detail. If we want to fix our finances, let's start by looking at what's inside us. Let's start by understanding our brain preferences, temperament and competencies and then we can successfully manage our relationship with money.. Using scientific, psychological and medical studies we can look into our natural patterns and tendencies and take actions that will last over time and lead us to change what we are not comfortable with.

Next week: The different parts of the brain and their role in decision-making.

This text may be reproduced provided that PROA Comunicación is credited as the original source.


Rocío Ledesma del Fresno

Summa Cum Laude graduate in Business Administration and Management with a Minor in Economics from The American University of Paris, she has also completed a Master in Finance at Icade. She recently completed a Master in Emotional Intelligence at the Hune Institute.

For 25 years she was Director of the Innovation and Product Departments at Banif and Andbank. She is currently Manager at Dextra Corporate Advisorsindependent boutique of M&A and corporate, and director of Navis Capital Desarrollo, SGEIC, an alternative investment fund manager registered with the CNMV. She is also a member of the association WA4STEAMan international community of women business angels seeking to expand the female presence in STEAM fields by providing not only capital, but also by becoming a strategic partner for future leaders.

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