Unlocking Your Financial Emotional Intelligence (FEQ): The Key to Better Money Decisions

Financial decisions might look like numbers on a spreadsheet—but inside, it's a full-blown color bomb of emotions.

Okay, real talk: Have you ever looked at your bank account and thought, “How did this happen—I was being so responsible-ish!” You know the money math, you’ve read the blogs, maybe even flirted with a spreadsheet… but something still doesn’t click.

Well, guess what? You’re not bad at money—you’re just a gloriously complicated human. And the secret sauce you’re missing? It’s called Financial Emotional Intelligence, or FEQ, and it’s way more interesting than it sounds.

What Is Financial Emotional Intelligence?

It’s like emotional intelligence, but make it money. FEQ is all about how your feelings mess with—or magically enhance—your money decisions.

As in: why that one impulse buy at 1 a.m. felt like self-care… until it didn’t.

According to financial therapy pioneer Rick Kahler, a whopping 90% of financial decisions are made emotionally. NINETY. Percent. That's almost everything. So if you’ve been budgeting with pure logic alone, congrats—you’ve been trying to solve a 1,000-piece puzzle with only 100 pieces (and without the puzzle box image).

The Five Pillars of FEQ

At its core, FEQ includes:

• Self-awareness: Recognizing how you emotionally react to money (e.g., guilt after spending, anxiety about budgeting, shame when discussing debt)

• Self-regulation: Managing those emotional reactions (e.g., not panic-selling during market dips, pausing before emotional purchases)

• Motivation: Using your values and goals to guide money choices rather than letting temporary emotions dictate decisions

• Empathy: Understanding how others may feel about or experience money, particularly important in relationships

• Social skills: Navigating financial discussions effectively, especially in relationships or teams

  
  

Money Scripts: the stories we tell ourselves...

Research by Dr. Brad Klontz and Dr. Sonya Lutter has revealed that many of our financial behaviors are driven by unconscious beliefs called "money scripts" that often develop in childhood.

These money scripts fall into four main categories:

• Money Avoidance: Believing money is bad or that wealthy people are greedy

• Money Worship: Believing more money will solve all problems

• Money Status: Equating self-worth with net worth

• Money Vigilance: Emphasizing frugality and saving

  
  

Each of these belief patterns affects financial decisions in different ways. For example, money avoidance might lead to neglecting financial planning, while money status might drive excessive spending on status symbols.

FEQ Superpowers: What You Get When You Level Up

People with high FEQ are the Jedi of personal finance. They’re more likely to:

• Save regularly

• Avoid impulse spending

• Handle financial setbacks with resilience

• Report greater overall life satisfaction—even when income is held constant

  
  

Yes, it’s that powerful. And yes, FEQ can be developed and improved.

How to Improve Your Financial Emotional Intelligence

This is a great time to grab a journal to start to fully engage with your FEQ and the questions/exercises below (you can even give yourself permission to buy an awesome new one if it will help you commit to the task AND if you can afford it)

1. Identify Your Money Scripts

Start by understanding the unconscious beliefs driving your financial behavior. Ask yourself:

• What money messages did you receive growing up?

• How do you feel when you think about saving? Spending? Investing?

• What financial situations trigger strong emotional responses?

Write down your answers.

2. Practice Mindful Money Moments

Before making financial decisions, especially significant ones, take a moment to check in with your emotions:

• What am I feeling right now?

• Is this emotion influencing my decision?

• Would I make the same choice if I felt differently?

Write out this thought process.

3. Develop Financial Self-Compassion

Many people experience shame or guilt around money mistakes. Practice treating yourself with the same kindness you would offer a friend:

• Acknowledge that financial missteps are part of being human

• Learn from mistakes without harsh self-judgment

• Focus on progress rather than perfection

Journal about your journey or grab a non-judgmental partner or friend to go through this with.

4. Strengthen Financial Communication Skills

Many financial challenges involve relationships. Work on:

• Expressing your financial needs and boundaries clearly

• Listening to others' perspectives without judgment

• Finding a compromise when money values differ

You can write down your needs and boundaries to gain clarity on them before you communicate them. Check out the assessment tools in the next section to help you get that clarity.

5. Use Assessment Tools to Gain Insight

Dr. Brad Klontz has developed several free assessments that can help you understand your financial psychology:

• Financial Health Scale (FHS): Measures overall financial wellness

• Money Scripts (KMSI-R): Identifies your unconscious money beliefs

• Money Behavior Inventory (KMBI): Assesses specific financial behaviors

  
  

These tools can provide valuable insights into your financial emotional patterns.

TL;DR: Money Is Simple. Being a Human Is Complex.

Spreadsheets? Simple. Your brain? A complex web of childhood beliefs, emotional rollercoasters, and Amazon Prime. But hey—that’s what makes you you. And working on your FEQ is like giving your money brain a warm hug and a map.

By developing your Financial Emotional Intelligence, you're addressing the 90% of financial behavior driven by emotions, not just the 10% controlled by logic.

So, go ahead—learn your triggers, talk it out, laugh at your inner money gremlin, and keep growing.

What aspects of Financial Emotional Intelligence would you like to develop further? We'd love to hear your thoughts and experiences in the comments below.