As financial planners, we are often taught to believe that money is about numbers, ratios, and rational choices. Yet, after years of sitting across the table from clients, it is clear to me that most financial decisions are far less about spreadsheets and far more about the stories, emotions, and identities tied up in money. What appears to be a purely transactional decision on the surface often reveals itself to be deeply personal once we dig a little deeper.
Divorce and the family home
One of the clearest examples emerges in divorce proceedings. From a financial standpoint, it may make perfect sense for a recently divorced person to sell the family home, split the proceeds, and start afresh. But homes are not just bricks and mortar. They are the places where children took their first steps, where birthdays were celebrated, and where families weathered storms together. To ask someone to sell the home is, in their eyes, to ask them to give up a part of their life’s story. For many, holding onto the house becomes an act of emotional preservation, even when the numbers prove that selling is the wiser choice.
The pressure to keep up appearances
Another situation that arises regularly is the decision to upgrade vehicles. The rational part of the mind may know that a reliable, affordable car is all that is needed. Yet many clients feel immense social pressure to keep up with colleagues, neighbours, or extended family. A car is no longer a transport solution—it becomes a symbol of status, success, or even self-worth. The decision to purchase a more expensive vehicle may look like a financial misstep on paper, but emotionally, it can feel like a way of keeping up with the Joneses, of fitting in, or of reassuring oneself of progress in life.
Elderly couples and the family home
In retirement planning, a similar attachment often presents itself. Elderly couples will sometimes resist moving out of their long-time family homes into retirement villages, even when they acknowledge privately that the home has become unmanageable. The thought of downsizing is experienced as a form of loss: not just of space, but of identity, independence, and cherished memories. Even though the move might reduce costs, improve safety, and ensure access to medical care, the decision is not merely financial—it is deeply personal.
Guilt and overspending on children
Parents, too, frequently let emotions dictate their financial choices. Guilt is a powerful motivator: whether from working long hours, a divorce, or a sense of personal inadequacy, many parents overspend on their children in ways that go far beyond what is necessary or sensible. Extravagant gifts, expensive schooling, or funding a lifestyle the family cannot afford are often justified as ‘for the children, when in truth they are attempts to appease parental guilt. These decisions may create temporary relief but can cause long-term strain on a family’s financial well-being.
Sentimental attachments to investments
In the investment world, sentimentality is often a culprit. Consider the case of a client who inherits a share portfolio from a parent. Rationally, the best course of action might be to diversify, sell outdated holdings, and realign the portfolio with long-term objectives. But to the inheritor, those shares are not simply financial assets—they are a living connection to a loved one – and selling them feels like betraying the memory of the parent. In such situations, financial advice needs to tread carefully, acknowledging the sentimental value while also educating on the financial risks of clinging to outdated or unsuitable assets.
There are countless other examples:
- Career changes: A professional clinging to a high-paying but unfulfilling job because leaving would mean disappointing family expectations.
- Small luxuries: A widowed retiree continuing to book annual overseas trips, not because they can afford it, but because travel was something they once shared with a spouse and feels integral to preserving that bond.
- Entrepreneurial pride: A business owner refusing to close or sell a failing company because it represents years of sacrifice, even though doing so would protect their retirement savings.
In each case, money is not just money—it is bound up in meaning, relationships, and self-identity.
Why this matters
Understanding that money decisions are emotional does not mean ignoring financial logic. Rather, it means recognising that good financial planning must account for both the head and the heart. Clients need to be guided through their emotional biases, not judged for them. A financial plan that disregards personal feelings may be technically correct, but it will likely fail in practice because people cannot live comfortably with decisions that ignore their emotional truths.
The role of a financial planner
This is where the role of a financial planner becomes critical. Too often, clients mistake financial advice for a transactional service—someone to sell them a product, set up a policy, or crunch some numbers. But real financial planning is about far more than that. It is about listening deeply, understanding the emotional drivers behind decisions, and providing guidance that balances personal meaning with financial reality. A financial planner must sometimes act as a coach, a counsellor, and even a mediator, helping clients process the emotions tied to their money.
The key takeaway is this: do not underestimate the emotional side of your financial life. When you find yourself making—or resisting—a financial decision, pause to ask: “What is really driving this choice? Is it the numbers, or is it something deeper?’ Be honest with yourself about the role of emotions like fear, guilt, pride, or nostalgia. Once you recognise them, you can work with your advisor to make choices that respect both your financial security and your emotional wellbeing.
Remember, at its core, money is a human story. Every rand carries meaning, every asset is linked to a memory, and every plan is shaped by hopes and fears for the future. A skilled financial planner understands this and works with you not only on what makes sense financially but also on what makes sense for you as a person. Numbers may tell part of the story, but emotions complete it—and acknowledging both is the only way to build a plan you can truly live with.
Have a great day.
Sue
