Good morning and welcome back to The Financial Wagon!
Grab your coffee, settle in, and let’s roll into today’s ride through money, mindset, and smarter financial moves.
The Psychology of Money — Why We Spend the Way We Do
When most people think about money, they think about math: numbers, budgets, percentages, interest rates. But the truth is this — money is more emotional than mathematical. Our decisions rarely come from calculators; they come from habits, fears, confidence, and even childhood memories. Understanding why you make certain financial choices can help you make better ones.
Today, we’re diving into the psychology behind spending and saving so you can build healthier money habits that actually stick.
1. Why Our Brains Aren’t Great With Money
Money is a modern invention, but our brains operate with ancient wiring. We’re built for survival, not online banking.
Here are the biggest psychological traps people fall into:
Short-term over long-term thinking:
Our brains crave instant rewards. That’s why it feels easier to buy something today than put the same money into an investment you won’t touch for 10 years.Loss aversion:
Losing $20 feels worse than the joy of gaining $20. This can make people avoid investing or panic-sell during market dips, even when holding long-term is usually the smarter move.Social comparison:
We don’t always buy things because we want them — sometimes we buy things because others have them. (Social media makes this way worse.)
The first step in mastering money is understanding that these biases exist in everyone, even very successful investors.
2. Emotional Spending — And How to Break the Cycle
Ever bought something because you were bored, stressed, or hyped? You’re not alone. Retail therapy works in the moment, but it’s terrible for long-term financial stability.
Try these strategies:
A. The 24-Hour Pause Rule
Before purchasing anything non-essential, wait 24 hours.
This gives your emotions time to settle and your logic time to show up.
B. Create Spending Triggers Awareness
Write down moments when you tend to overspend, such as:
After a long stressful day
When you’re scrolling online late at night
When you get a paycheck and feel “rich”
Identifying your patterns is half the battle.
C. Replace the Habit, Don’t Just Fight It
If spending makes you feel rewarded, find a healthier reward that still gives you a dopamine boost:
A 10-minute walk
Listening to your favorite playlist
Calling a friend
Making a homemade iced coffee instead of buying another $7 one
Your brain wants the feeling, not the thing.
3. Rewiring Your Money Mindset With Simple Daily Habits
You don’t need drastic actions — small daily habits can shift your entire financial future.
Here are easy changes with big impact:
Name Your Financial Goals (literally).
Instead of “save more,” try:“Emergency Fund: 3 Months of Peace”
“New Car That Won’t Break Down”
“Summer Trip Adventure Jar”
Naming your goal makes it more real and more motivating.
Automate everything you can.
When money moves without you thinking about it, your emotions can’t interfere.Auto-transfer savings
Auto-invest a small amount each paycheck
Auto-pay credit cards to avoid late fees
Do a Weekly 5-Minute Money Check-In.
Look at:What you spent
What you saved
What’s coming up next week
This simple routine prevents small issues from turning into big problems.
Visualize Your Future Self.
Ask yourself: Will future me thank me for this purchase?
(You’d be surprised how effective this is.)
4. Using Psychology to Build Wealth — Not Destroy It
If emotions can push you in the wrong direction, they can also push you in the right one.
Turn your brain into a money-building machine by:
Celebrating progress:
Even if you saved $5 this week — acknowledge it. Progress compounds.Making saving fun:
Turn it into a challenge, like “No-Spend Sunday” or “Save the Extra Coins Month.”Building positive momentum:
When you feel successful financially, you act more responsibly.
Tiny wins → confidence → smarter decisions → bigger wins.
Final Takeaway
Money isn't just about earning and spending — it’s about understanding yourself. When you master your emotions, you take control of your financial future. And the best part? You don’t need to be rich to start… you just need awareness and small, consistent actions.
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That’s All For Today
I hope you enjoyed today’s issue of The Wealth Wagon. If you have any questions regarding today’s issue or future issues feel free to reply to this email and we will get back to you as soon as possible. Come back tomorrow for another great post. I hope to see you. 🤙
— Ryan Rincon, CEO and Founder at The Wealth Wagon Inc.
Disclaimer: This newsletter is for informational and educational purposes only and reflects the opinions of its editors and contributors. The content provided, including but not limited to real estate tips, stock market insights, business marketing strategies, and startup advice, is shared for general guidance and does not constitute financial, investment, real estate, legal, or business advice. We do not guarantee the accuracy, completeness, or reliability of any information provided. Past performance is not indicative of future results. All investment, real estate, and business decisions involve inherent risks, and readers are encouraged to perform their own due diligence and consult with qualified professionals before taking any action. This newsletter does not establish a fiduciary, advisory, or professional relationship between the publishers and readers.