The Psychology of Money

Money is a powerful player in one’s psychological health.

BY: Brandi-Ann Uyemura

Eight Steps to Aging Gracefully
 

Money is a powerful player in one’s psychological health. A person in financial debt often also feels emotionally inept. That’s because like food, people use money as pawns in a psychological game that bets on external satisfaction to soothe what ails them. And they do it at a significant cost.

Credit cards are racked up, bills go unpaid, and relationships between loved ones grow tense. However, there is no research that indicates money leads to happiness. In fact, one study found money increased our well-being only up to $75,000. There were no significant benefits after that. Yet we continue to buy into a false financial fairy tale. The truth is there is nothing secretive, mysterious or complicated about money. It’s all of our past beliefs and misunderstandings that affect the way we perceive it. Just like some people wear rose-colored glasses, there are others who see money as the hero or the villain in their life.

How do you know if your emotional health is impacting your finances?

In The Secret Language of Money: How to Make Smarter Financial Decisions and Live a Richer Life, authors David Krueger M.D. and John David Mann say, “We make money mistakes because we use money to accomplish nonfinancial goals. We seek to use money as the thing to do what no ‘thing’ can: regulate our moods, increase our self-esteem, and control others. We give money meaning.”

Continued on page 2: Money »

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