Everything you do, and every decision you make,is controlled by your emotions.
Even the strive to take a logical approach to life is an emotional desire.
Despite this, and even with the knowledge that you can never fully leave your emotions behind,
The best financial decisions are made when you are aware of your emotions; control them to a point,
and compensate for the effect they might be having on your decision making.
If you want a good deal, you have to be willing to walk away. If you let your emotions control your decision,
you are much more likely to pay more than you should. The salesperson — or anyone else with whom you negotiate —
will know right away if your emotions are controlling your decisions and will use this fact to their advantage.
Your emotions give your power away.
As humans are emotional creatures, its not always that person is always in loss while taking emotional decision, sometimes it turns out to be good too.Like Setting a Financial Goal to achieve 10 Lac rupees to buy a home for parents/Grand parents/himself , Now this decision will lead you to generate more income or save more religiously.
Well , I would still advise that always takes a mathematical approach for any financial decisions , Like say if you have 1 lac in PPF account and You have Home Loan of 1 Lac.
What emotions suggests that “One should be Debt Free”, So immediately Close your Loan account with PPF Money.
What Mathematics suggests that “ PPF earning – 9% Interest, Home Loan @ 8% + Getting Interest Rebate”
So what will be Good Decision in this case. So emotional decisions will always more cost associated with it.
We can’t fully separate emotions from our ability to make decisions. However, just by being aware of the effect they have can help mitigate the bad choices. How do you deal with your emotions when making financial decisions?
One Suggestion :
Beware of the retailors, they are experts at tugging on your emotions when it comes to paying big money
for a most of the things which you don’t required actullly. Step away from all big purchases for at LEAST
24 hrs,if not 2 weeks, and reconsider. You will find something else out there to spend money
which you otherwise spent earlier..