The Psychology of Money
Money is a powerful player in one’s psychological health.
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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.” By using money as a tool to get what you need, you can also inadvertently divert attention away from the things and people who really need your attention. Carolyn Myss, Ph.D. says in Anatomy of the Spirit, “For many people loving oneself remains a vague notion, which we often act out in material ways-through shopping sprees and outrageous vacations. While this type of reward is enjoyable, it can obstruct our contact with the deeper emotional stirrings of the heart that emerge when we need to evaluate a relationship, or a job, or some other troubled circumstance that affects our health.” It’s not money itself, but your thoughts and beliefs about money that has the potential to exacerbate any situation. Unfortunately, the deeper you get in debt, the harder it is to barrel your way out. The only way to permanently address these issues is to confront what you fear most-your relationship with money.
Think about how you perceive money. Do you view it as a way out, a solution to all of your problems? Or do you perceive it to be the opposite, as a devil that’s robbing you of a better life? If you said, “Yes” to either, you’re probably being ruled by your emotions rather than logic when it comes to your finances.
You may be unconsciously using money to feel better about yourself, cope with anxiety, control others, or your life. How can you know for sure? There are a few signs that can help you determine whether you’re using money to the detriment of your financial health. For example, are you in debt currently? Do you feel overwhelmed with managing your debt and try to avoid it, hide it from others and/or rationalize the debt you have? Do you feel better while shopping and worse once you’ve stopped? Do you use money to get what you need from others by buying them things or cutting them off financially? Money will never be the solution to your problems. It can temporarily abate worries directly related to money. For example, it can pay your bills and provide food and shelter for you and your kids. But it won’t bring you love, happiness or even security. Money becomes the problem when we believe it does.
How do you know whether you’re concerns are realistic or are being controlled by your own issues with money?
The bad economy makes it difficult to determine whether your anxiety about and focus on money are realistic. After all, it is socially acceptable to worry about finances. Some of the things mentioned above could even seem understandable, reasonable even. The real sign that your emotional health is ruling your finances, however, is whether you’re continually living above and beyond your means and when you feel unable to seek help and/or participate in routine activities to manage and repair your financial situation.
The following questions mentioned in The Secret Language of Money: How to Make Smarter Financial Decisions and Live a Richer Life can get you reconnected with your finances and give you a better sense of whether it’s negatively impacting your life:
· What in your life right now are you compromising for money?
· What have been the three most significant experiences with money in your life?
· How fully and honestly do you speak with your spouse or partner about money, finances, spending, goals, savings, and debt?
· Are you unable to fully enjoy what you purchase because you feel bad, guilty, ashamed, or embarrassed about your purchase?
Money is just money. But it’s the summation of bad information and the influence of your history, culture and society that impact your perception of it. Your grandmother, for example, may have told you that money is the most important thing in life. Your father might have taught you that the only way to be happy in life is to be rich. The reality TV shows you watch portray wealth as glamorous and fun. And society teaches us that rich people get respect. It’s difficult to wade your way through your issues with money, but like anything else it’s imperative that you take your finances in your own hands. By taking the necessary steps to seek therapy, financial counseling or help from family members, your self-esteem, self-confidence and self-efficacy will grow.
It’s an empowering feeling to realize that you, not your money can control your life. Once you’re aware of the impact your emotions play in your finances, you’ll stop depending on external situations to make you happy. This will inevitably free up your time to focus on other areas of your life and will make you more invested in your health, emotionally and financially.