In everyday conversations, money is often treated as a sensitive and emotional topic. We associate it with security, status, love, stress, or even guilt. While our emotions around money are authentic and valid, one fact remains: money itself is objective.
This core idea—that money is a tool, not an end in itself—is often overlooked. People confuse their emotional relationship with money with the nature of money itself. However, if we want to build wealth, make better decisions, and grow financially, we need to separate our emotions from our actions.
In this blog, we’ll unpack what it means when we say “money is objective,” how subjectivity ruins financial decisions, and how you can adopt a more rational mindset around money to live a more stable, secure life.
What Does it Mean That “Money is Objective”?
To say that money is objective means:
- It follows rules (math, logic, principles)
- It behaves consistently (compounding works regardless of your feelings)
- It doesn’t care who you are, where you’re from, or how you feel.
Money doesn’t discriminate. ₹100 saved by a millionaire grows the same way as ₹100 saved by a student. The math doesn’t change based on identity, culture, upbringing, or mood.
In contrast, subjectivity comes from our interpretation and emotions about money—how we feel about spending, saving, risk, or wealth.
Understanding this difference is the first step toward financial discipline.
The Myth of Emotional Money
Why do people treat money emotionally?
1. Cultural Conditioning
We grow up hearing stories that shape how we “feel” about money—“Money is the root of all evil,” “Rich people are greedy,” or “Money doesn’t grow on trees.”
2. Family Background
Children raised in scarcity often fear spending. Those raised in abundance may undervalue the importance of saving.
3. Trauma or Guilt
Past financial mistakes lead to guilt. Some people avoid conversations about money altogether to avoid shame.
4. Media & Marketing Influence
Ads, influencers, and social media fuel emotional decisions, such as FOMO, envy, and impulse spending.
But here’s the truth: money doesn’t know your past. It only responds to your present behaviour.
Money as Math: The Objective Framework
Let’s understand some examples where money behaves predictably, free from subjectivity:
- Compounding: ₹10,000 invested at 12% grows the same for everyone.
- Budgeting: Spending more than you earn leads to debt. Always.
- SIP: ₹5,000/month for 20 years at 12% will create wealth, regardless of your mood or identity.
- EMI: Your loan doesn’t care if you had a bad day. It’s due.
This objectivity gives us control. We can plan, act, adjust, and predict.
Imagine approaching finances like physics: action → reaction. Cause → effect.
When you treat money objectively, you remove drama and gain power.
The Subjective Mistakes People Make with Money
Let’s look at some common emotional traps that derail financial success:
1. Lifestyle Inflation
Subjective thought: “I deserve to upgrade since I got a raise.”
Objective reality: If you upgrade everything, your savings won’t grow.
2. Impulse Spending
Subjective: “Retail therapy makes me feel better.”
Objective: Emotional spending today reduces future financial freedom.
3. Fear of Investing
Subjective: “Markets are risky. I could lose everything.”
Objective: Risk can be managed through diversification and long-term planning.
4. Ego in Money Decisions
Subjective: “I won’t sell this stock at a loss—it’s personal!”
Objective: Holding a bad asset damages returns.
5. Comparison and FOMO
Subjective: “Everyone on Instagram is going abroad—I need a trip too.”
Objective: You don’t know their income, debt, or situation. Stick to your plan.
6. Avoidance and Procrastination
Subjective: “Money stresses me out, I’ll check later.”
Objective: Avoiding money doesn’t stop bills, EMIs, or interest from accumulating.
Objective Financial Principles Everyone Can Follow
1. Spend Less Than You Earn – Always have a surplus. Savings is the gap between income and lifestyle.
2. Pay Yourself First – Automate SIPs. Save before you spend, not after.
3. Compound Early – Time beats timing. Start investing young.
4. Budgeting Works – Know where every rupee goes. Track, analyse, and optimise.
5. Emergency Fund Is Essential – Objective protection against unexpected events.
6. Avoid Bad Debt – Credit card debt or EMIs for luxuries eat into future wealth.
7. Invest in Growth Assets – Long-term wealth requires equity, not just savings accounts or fixed deposits.
8. Review and Rebalance – Monitor your portfolio and adjust it according to your goals.
These rules apply equally to everyone. Regardless of your age, background, or beliefs, these truths remain unchanged.
Why Mindset Matters: Shifting from Subjective to Objective
Moving from emotion-led to data-led financial decisions requires a mindset shift:
- From “I feel” → “I plan”
- From “I hope” → “I calculate”
- From “I avoid” → “I confront”
This shift happens through:
- Financial education
- Habit formation (automated SIPs, journaling)
- Conscious awareness (question your beliefs)
- Learning from mistakes without guilt
Examples of Objectivity in Real-Life Financial Scenarios
Scenario 1: Salary Hike
Subjective reaction: Spend more to celebrate.
Objective approach: Increase SIP by 20%, then adjust lifestyle.
Scenario 2: Market Crash
Subjective: Panic and withdraw investments.
Objective: Stick to long-term goals, buy more if possible.
Scenario 3: Peer Pressure
Subjective: Buy a car to match friends.
Objective: Evaluate affordability, cost of ownership, and opportunity cost.
Scenario 4: Guilt Spending
Subjective: Since parents sacrificed, I shouldn’t say no to any expense.
Objective: Balance emotional support with financial sustainability.
The Role of Financial Advisors in Promoting Objectivity
A good advisor:
- Keeps you calm in volatile markets
- Helps you look at numbers, not noise
- Brings logic where emotion dominates
- Offers accountability
Financial planning is as much about behaviour management as it is about numbers.
If your advisor stops you from impulsively switching funds, they’ve already added value.
Teaching the Next Generation: Objectivity from the Start
Children and teens can be taught to view money as a tool, not a trophy:
- Use pocket money as a budgeting practice
- Introduce compounding early
- Encourage goal-based saving (gadgets, gifts)
- Avoid negative money beliefs (“we can’t afford it” → “how can we plan for it?”)
Early objectivity builds lifelong financial confidence.
Final Words
Money isn’t moral, emotional, or personal—it’s mathematical. It follows laws, not moods. When we stop assigning feelings to it and start treating it as an instrument, we unlock the true power of financial freedom.
Your income may be limited. Your background may pose challenges. But your ability to be objective with money is entirely in your control.
Discipline beats drama. Numbers beat narratives. And clarity beats chaos.
Embrace objectivity—not because you’re a machine, but because it’s the best path to peace.
📘 Further Reading: Understanding Why Money Is Objective, Not Subjective
🔹 1. Why Are We So Emotional about Money? – Harvard Business Review
Examines how money becomes intertwined with our emotions from childhood, influencing decisions throughout life.
🔹 2. The Psychology of Money – Morgan Housel (Collaborative Fund)
This widely praised piece explores how personal experiences shape financial behaviour, showing the gap between objective facts and emotional decisions.
🔹 3. Behavioural Finance: Understanding How Emotions Affect Investing – Investopedia
Breaks down common cognitive and emotional biases, explaining how they lead to irrational financial decisions.
🔹 4. Mental Accounting: A Bias That Affects Everyday Spending – Investopedia
Explains how we wrongly assign different emotional values to money based on its source or intended use, despite it being fungible.
🔹 5. To Be Happy, Understand Your Relationship With Money – Forbes
Highlights how financial decisions are shaped by behaviour and perception, not just numbers, helping you spot subjective traps.
Disclaimer: The information provided in this blog is for educational and informational purposes only and should not be considered as financial, investment, or tax advice. While every effort has been made to ensure accuracy, readers must consult a qualified financial advisor before making investment decisions. VSJ FinMart is an AMFI-registered mutual fund distributor (MFD) that does not provide investment advisory services. Mutual fund investments are subject to market risks; please read all scheme-related documents carefully before investing.