6 Facts about Mental Health and Money

How does mental health and money intersect?

Well, so glad you asked!

As I’ve been doing some reading and listening lately, the topic of a person’s relationship to money and how that impacts the relationship to themselves and others has come up lately.

What I’ve discovered is this:

1. A minimum amount of money is important to mental health and to raising kids well. But too much money can be a barrier to parenting well.

It is stressful to be stretched and strained…to wonder how the rent will be paid, or wonder if the grocery money will last until the end of the month.  When finances are so tight that there isn’t enough for basic expenses, it affects mental health.

It’s a lousy feeling to not know if you can provide for your kids.  Absolutely.

Poverty is exhausting and stressful.  And having to work multiple jobs to make ends meet is hard on relationships.

However, we often have the notion that happiness can only increase as income increases.  The more money one has, the common thinking goes, the easier it is to provide for children, and give them what they need.

“The scholars who research happiness suggest that more money stops making people happier at a family income of around $75000/year” (David and Goliath by Malcolm Gladwell, p. 50) And actually, “when the income of parents gets high enough, then parenting starts to be harder again”…as teaching a work ethic and modelling a successful struggle to achieve family success becomes difficult.  It’s harder to say, “No, we won’t” than, “No, we can’t”.

2.  Our culture of scarcity is what can create the problems

We live in a scarcity culture…one where the fear of “not enough” is ever present.  Media/advertising often tell us that we should be using better shampoo, have a nicer car, have a phone with more features, bump up our RRSP contributions…and we are often chasing “more” to ensure we have “enough”.

This is despite the fact that our houses are much larger than 20 years ago, and there is double the square footage of home per person today than a generation ago.  Things that didn’t even exist a hundred years ago and were considered luxury a generation ago are not considered standard (think air conditioning, dishwashers, cell phones).

In our pursuit of “enough” in this scarcity culture, we become anxious and focused on what’s not right/enough and become single minded in correcting this. Consumer debt load continues to rise. We are more in debt than ever before.

Debt creates its own stress.

3. Money does buy happiness…but only if you spend it in a certain way

Love this TED talk that makes the above claim:

Money does buy happiness…but only if you spend it the right way…on others. When we use our money to be kind…we experience a greater level of joy and life satisfaction

A guy named Michael Norton did some research at UBC in Vancouver had scientists give folks some money in the morning–…and if they were told to spend it on themselves, it had no effect on their mood. Others were also given money, only were told to spend it on others in whatever they chose…they bought someone a coffee,gave it to the homeless, or bought a small toy for a child…when they got a call at suppertime later that day, the folks who spent it on others…they had improved mood.

The research found that even small ways of spending money on others gave just as powerful an effect. you don’t have to do amazing things with your money to make yourself happy. You can do small, trivial things and yet still get these benefits from doing this.  

Turns out that when you give the members of a team…from a financial sales team or a dodge ball team…when you give each team member money to spend on themselves, it’s spent with no effect.  It’s gone.  When you give team members money and ask them to spend it on their team members, something quite incredible happens.  Spending money on others has a much bigger return. Sale numbers of sales teams go up…substantially.  Dodge ball teams start cleaning up in the league.  When team members are provided with resources and encouraged to be kind to each other, team work gets better, and the team becomes more successful. 

This group looked across the world—how broad is this effect that being kind with your money improves life satisfaction. Michael Norton and his team got data from the Gallup Organization. They ask people, “Did you donate money to charity recently?” and they ask them, “How happy are you with your life in general?” …In almost every country in the world where data can be gathered, people who give money to charity are happier people that people who don’t give money to charity. 

4. Words communicate messages more clearly than money.  Talking by money does not enhance relationships.

One of the most common things for couples to fight about is money.

One of the main reasons couples fight about money is that they use money to say things in the relationship.

  • “I love you unconditionally” translates into saying nothing when one partner is overspending…and a spouse doesn’t know how to raise a conversation about the bank balance
  • Anger at a spouse’s excess work hours or excessively expensive tastes becomes expressed by overspending oneself on one’s own interests or clothes or whatever.
  • or conversely, anger at one’s spouse is expressed by the withholding of money, “I can’t give you any more money for groceries this month” (even though there is still money for other things)
  • Shame (that feeling of being flawed and therefore ‘not good enough”) means that a person shops for prettier clothes, fancier furniture, or more expensive steaks to ensure that a spouse is/stays happy in the relationship.
  • Wanting to “make up” for a deficit of working too hard or really being insensitive by purchasing an expensive gift or meal at a fancy restaurant that one can’t really afford but is a huge gesture to demonstrate a desire to repair the relationship

Using money to communicate anger, fear, or love may work, but it’s expensive.  And not just monetarily.

Using your words to communicate the desire to be close, to feel good enough, to express disappointment or love will always be more effective than communicating with money.

5. Spending money is a only a very short term buzz to improve mental health

People who enjoy shopping will often buy an item when feeling especially stressed after a hard day’s work, or getting dumped, or after an argument with someone important to them.

The purchase gives a bit of a pleasant buzz…it feels good to have something new. It is an attempt to numb the uncomfortable/painful feeling with a shiny new object.

Truly, a cute dress doesn’t really numb the pain…and if your closet is already full, and your credit card already has a balance…it actually will increase the pain in the long run, after the immediate buzz  wears off.

Spending money to feel better doesn’t work.

5. Your approach to time affects your spending habits

Researchers [Clements and Zimbardo] looked at how [3000] people view the past, present and future.

They found that people who are excessively focused on the past—for example, the grandmother who says stuff like “things were so much better when I young”—aren’t likely to take financial risks.

For people who focus on the present, there are hedonists and fatalists.

A hedonist is a pleasure-seeker and tends not to think about consequences. People in this category aren’t typically in good financial situations, even if they are good at math.

For example, Clements said he has known investment bankers who used payday lenders. They could deal with incredibly complex financial problems, but they couldn’t control their impulses, he said.

Fatalists are the people who feel stuck and hopeless in their situation, he said. It might be a single mother who is making trade-offs, working endlessly and feeling like she isn’t making a dent in her debt.

Banks love hedonists and fatalists, Clements said. All they have to do is get a credit card into the hands of a hedonist and give a fatalist a bad deal so that their situation doesn’t improve.

People who are future-oriented tend to rank themselves high in financial literacy, but their excessive focus on what might happen can be to their detriment, Clements said.

For example, they might overpay for insurance because it sounds like a good deal and they want insurance.

Further…some languages do not have a future tense–“futureless languages”–(e.g.Keith Chen says, “A Chinese speaker can basically say something that sounds very strange to an English speaker’s ears. They can say, ‘Yesterday it rain,’ ‘Now it rain,’ ‘Tomorrow it rain.’ In some deep sense, Chinese doesn’t divide up the time spectrum in the same way that English forces us to constantly do in order to speak correctly.”

In languages that do not have a future tense, the speakers see the present and future more fluidly…and that changes their spending patterns: “futureless language speakers, even after this level of control, are 30 percent more likely to report having saved in any given year. Does this have cumulative effects? Yes, by the time they retire, futureless language speakers, holding constant their income, are going to retire with 25 percent more in savings.

For more on this intriguing idea…


6. We tend to place a disproportionate amount of emphasis on money for happiness

Our culture often equates income with happiness. We esteem those who have more disposable income.  Our culture often measures success by the size of a person’s home, the number of bells and whistles on their vehicle, or the manufacturers of their clothes. This occurs for both genders, but men tend to be more harshly evaluated on their “ability to provide”.

I wrote a series about the regrets of the dying.  When folks are in their last days, confronting their own mortality, they are not wishing they had made more money, or had a bigger house.  They are wishing they hadn’t worked so hard, that they had put more emphasis on relationships and quality of life.

Bronnie Ware writes: “By simplifying your lifestyle and making conscious choices along the way, it is possible to not need the income that you think you do. And by creating more space in your life, you become happier and more open to new opportunities, ones more suited to your new lifestyle.”

Anybody who thinks money will make you happy, hasn


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