Thinking, feeling, and acting are interrelated processes that shape our behaviour, and they often become so habitual in our busy lives that we are no longer mindful of them. We lose control of being intentional about the direction our lives are taking – and this often shows up in our finances.
Therefore, it is important to be aware of our thoughts and feelings and how they influence our actions, especially concerning financial behaviour.
Essentially, thinking refers to the cognitive process of processing information and making decisions. It involves analysing and evaluating information to reach conclusions and make decisions. Feeling refers to the emotional experiences and reactions triggered by events or thoughts. Our actions are shaped by our beliefs, values, and emotions, as well as our thoughts and decisions.
In many cases, our thoughts and feelings can interact in a cycle. For example, a person may have negative thoughts about their financial situation, which can trigger stress and anxiety. These feelings may lead them to act impulsively and make poor financial decisions. On the other hand, a person with a positive mindset and emotions may be more likely to make sound financial decisions. All three of these are shaped by our various intelligences.
Intelligences are the various capacities or abilities we have to process information, understand and interact with the world around us, and solve problems. There are different theories of intelligence, but one of the most widely recognised is Howard Gardner’s theory of multiple intelligences, which proposes that there are eight distinct types of intelligence.
- Linguistic intelligence: ability to use language effectively.
- Logical-mathematical intelligence: ability to solve problems and think logically.
- Spatial intelligence: ability to perceive and manipulate visual information.
- Bodily-kinesthetic intelligence: ability to control one’s body movements and handle objects skillfully.
- Interpersonal intelligence: ability to understand and interact effectively with others.
- Intrapersonal intelligence: ability to understand one’s own emotions and motivations.
- Musical intelligence: ability to perceive and produce musical sounds.
- Naturalistic intelligence: ability to understand and appreciate nature.
Each type of intelligence can impact our financial behaviour in different ways. For example, those with strong linguistic and interpersonal intelligence may be more skilled at negotiating salaries and financial deals.
Those with strong logical-mathematical intelligence may be more likely to make sound financial decisions and manage their finances effectively. On the other hand, those with strong musical intelligence may be more prone to impulsive spending on musical instruments or concerts. Understanding one’s bias in terms of intelligence can help inform and improve financial behaviour.
Not only does this help us understand how we might make, spend or save money in different ways to others in our family or business, but it can also help us see how we could arrive at solutions to problems in more creative, analytical or logical ways. This improves communication and forges stronger relationships with those around us and with our money.