The Most Dangerous Time for Your Money

The most dangerous time for your money

Do you know the most dangerous time for your money? The time when you’re most likely to make decisions that will literally cost you cold hard cash? It’s simple: whenever you’re emotional.

Grace under pressure?

Stress is a huge trigger. Most of us are not poster children for “grace under pressure”. We may continue on and function pretty well, but when we get stressed we just don’t think as clearly as we otherwise might. Especially if it’s long term stress, which is often accompanied by a lack of sleep — another thing that makes thinking clearly difficult.

Stress can come in many forms. It could be health-related, have to do with relationship issues, or come from job pressures. It can even come from irritating things that happen over and over again, such as a car breaking down repeatedly. Ironically, it’s often due to money troubles. All of those things can lead to poor decisions.

Poor decisions

We may spend more than we ought to, because we want to make a problem go away. This is especially true in the case of emergencies, where we don’t feel like we have any other choice. (We forget that there are usually other options.) We may also spend money because we’re tired, or because we want to cheer ourselves up.

Other emotional triggers

The poor decisions can come from other kinds of emotion too. Fear and greed are big ones. When we’re fearful or greedy, we’re also vulnerable to being taken advantage of, and to being blinded from the truth. Basically, just as with stress, we either don’t stop to think things through or ignore red flags because our emotions have got the better of us. All of that can cause us to lose money.

Avoiding the danger zone

So what can you do to avoid overspending or losing money due to emotional situations?

Just being aware that it can happened will help. Forewarned is forearmed. Sticking to the 24 hour rule is a good idea, too. That’s where you wait at least 24 hours before making any big decisions; giving you time to clear your head, think more rationally, and investigate options.

It also helps to actively plan out what you might do during common situations, and to prepare. For example, do you have an emergency fund? Do you have savings for car repairs? Medical and other insurance? If not, start to get your financial house in order today. Speaking of houses, if you own a home, even a list of reliable repair people that you’ve taken the time to vet now (when you don’t need them) can help you avoid being fleeced when you do.

Your money doesn’t have to be in danger. Do what you can to avoid the danger zone, and you’ll be better off for it. You’ll also end up with more cash in your pocket than you otherwise might.


  • I always ensure that I don’t use emotion as a way to part my hard earned cash

  • Emotion and money can be a good combination, or can be a wealth-damaging combination. One bit of advice I received growing up is, don’t make an important money decision at night, when tired and more prone to emotion over logic. Make it the next day, when refreshed.

    I know second-hand of one couple where both people were working, and doing quite well in their respective careers. They had a life built around relying on both incomes, though there were able to save. Then, she had a baby and become overcome with emotion.

    She first quit her job, leaving them running negative on savings. Then, she badgered her husband for a bigger house with a yard for their new arrival. Well, not surprisingly, they got caught up in the real estate crisis. They could have acted with logic instead of emotion, and could have realized that she needed to keep working, or maybe move to a smaller place if she did quit. Certainly not move to a bigger place with more space.

    • Wow, that’s a sad story. I’m curious about the case(s) where money & emotion can be a good combo. (All that comes to mind is finding a stack of cash and getting excited about it!)

  • I am absolutely guilty with this. I tend to spend a lot when I am too depressed and don’t think cleverly or frugally of my spending.

  • Money and emotion get linked so quickly, and unhinging them can be extremely difficult! I find it’s important to have a money buddy – someone you can discuss these issues with, who won’t be impacted by your emotional state. More than one of us have sent good money after bad in a tough situation and come to regret it.

    The 24 hour rule is great. To help avoid late-night emotional spending decisions, write them down and read them over in the morning. You’ll likely find they don’t make much sense after you’ve had your coffee!

  • I experienced it sometimes that when I am depressed and stressed I tend to buy things to be happy. This is a real danger for my savings, good thoughts.