Making decisions about money during times of high energy and emotions (good or bad) is dangerous.
I have made many bad money decisions while caught up in my emotions:
- sitting behind the wheel of a brand new car my wife and I had just finished test driving – yes, we bought it
- panicking about not allocating enough money and paying off our car with our line of credit – we ended up paying way more in interest over time
- creating my yearly budget shortly after overspending during Christmas – resulting in an overly strict budget nobody could follow
- buying a “must have” marketing program for my business because of a quick deadline – and finding out it wasn’t a fit after
- deciding on a product budget while planning an exciting and big launch – which required a lot of investment, and didn’t work
I made each of these decisions while caught up in the energy and emotion of the moment. Times of intense energy and heightened emotions have a huge impact on how you think about and react to an opportunity or situation, and can lead to bad decisions, especially when it comes to money.
This is why I have found January to be a horrible time for planning my money and crafting a yearly budget, for both my personal life and business, and why I think managing your money is best left for February.