We’ve all heard the saying ‘money doesn’t equal happiness’ and honestly, I’m calling BS on that right now. While this quote was most likely meant to remind us of the “small things” in life, it was probably perpetuated by a rich person who’s never had to worry about paying rent for the month.
If you’ve ever been financially insecure then you know what it’s like to wonder where your next meal is coming from, how many layers you’ll need to wear in bed to stay warm, and the sickening feeling of figuring out how to pay the next bill, let alone consider a life expense like health insurance. All of those situations cause stress to our bodies and minds. But how do you become more financially secure in the first place?
While you may think that you simply need to speed read The Barefoot Investor and stop eating avocado toast, the reality is that our money habits are deeply entrenched in our psychological behaviours.
One of Australia’s leading financial therapists, Jane Monica-Jones is a pioneer in the study of the psychological and behavioural challenges with money and financial management practices, as well as the host of the Financial Therapy podcast. We spoke with Jane to learn more about how much financial security impacts our health.
First thing’s first: where does our anxiety around money stem from?
In most western societies, our level of success or failure is often measured by money. Many of us have an internal drive that says, ‘If I’m not good with money, I’m a failure’. Regardless of the fact that you might be a really great person or you contribute a lot for your community, the measure of success is measured against money.
The next reason is around a sense of security. Humans don’t like to feel insecure, particularly around that basic need; whether I can feed myself, clothe myself, shelter myself. If that’s under threat, then that can cause us to be anxious. So it really is to do with survival.
We can then also compare ourselves to our peers when it comes to status symbols that we have or don’t have; the nice car, the nice house, the access to leisure, how many holidays you can have, etc.
And what’s the science behind why we spend?
Spending is used as a way to alleviate stress. So when we go out shopping, dopamine fires. It’s in the actual pursuit of going out and searching for those shoes when the dopamine level is hitting. Now, if we’re stressed, we need these natural chemicals to relax, right? And what better way has been inbuilt into us? ‘If I go out and shop, I’m going to get that dopamine hit.’
Do you think this stems from us being hunter-gatherers? Is this the modern equivalent?
One reason for dopamine is that it actually pushed us to go out and hunt to satisfy our hunger. But now, most of us are pretty sorted in that area. It [spending] is actually how we have learned to deal with stress. Rather than going for a walk, meditating, connecting with nature, we’re culturally being built to spend. Often, people get very shy or ashamed that they’re overspending, but it’s just a strategy that you adopted. So let’s see if we can find some better strategies for you to manage stress.
How does a lack of money impact our health and well-being?
It increases stress which then affects our mental health. We know that the more stressed we are, the less capable we are to think and be creative. When we’re stressed, we can go into fight, flight or freeze, and it has its purpose, but we’re not meant to stay in these heightened activated states.
Now, if we stay highly activated in the fight, flight or freeze response, the body starts getting diminished and then it has an impact on our mental health. We end up being more susceptible to depression, anxiety, chronic fatigue, and more.
What are some tools people can use to quell financial anxiety and become more financially secure?
There is the wonderful work that financial counsellors can do to help you deal with the logistical challenges of not having money or large amounts of debt. But once you’re out of immediate crisis, you can look at some of the psychological challenges that you have.
How do you respond to stress? Do you go and spend? Do you start spending when you’re bored? Conversely, do you have trouble spending? A lot of people think that being good with money is about numbers, but for me, being good with money is looking at those soft psychological skills.
Look at the psychological reasons behind money and the way you deal with it, not just ‘I can’t budget’ ask why can’t you?
So, it turns out that (like everything else), money and how we spend it is deeply embedded into our brains and behaviours. Don’t beat yourself up if you’re not where you want to be financially just yet. Apparently, there’s some deep diving to do if you want to find a way for money to work for you. Another thing to remember is that health is wealth. Health insurers like Bupa offer Hospital and Extras cover so you can invest in your physical and mental wellbeing. Because as Jane has shown, life happens. Start getting your adulting into order here.
