How mental health influences your finances - Deepstash

deepstash

Beta

Get an account to save ideas & make your own & organize them how you wish.

deepstash

Beta

The Psychology of Money: What You Need To Know To Have A (Relatively) Fearless Financial Life

How mental health influences your finances

Mental health problems can have a significant effect on your finances.

  • Excessive use of alcohol leads to poor judgment and inattentiveness to finances.
  • Depression can cause a loss of employment. People with depression also lack energy and a sense of purpose.
  • People with a mild expression of bipolar disorder can experience states with increased energy, decreased inhibitions, exciting plans, and are overstimulated to spend.
  • Adults with ADHD/ADD have the ability to pay intense attention to tasks that really interest them while screening out the tedious or mundane.

163 SAVES


This is a professional note extracted from an online article.

Read more efficiently

Save what inspires you

Remember anything

IDEA EXTRACTED FROM:

The Psychology of Money: What You Need To Know To Have A (Relatively) Fearless Financial Life

The Psychology of Money: What You Need To Know To Have A (Relatively) Fearless Financial Life

https://www.forbes.com/sites/prudygourguechon/2019/02/25/the-psychology-of-money-what-you-need-to-know-to-have-a-relatively-fearless-financial-life/#5c0e1390dfe8

forbes.com

5

Key Ideas

The psychology behind money

Money is not a fixed entity. It is a complex of data points, challenges, and opportunities you encounter and have feelings about. Your decisions about money affect your emotions and behavior.

There are three factors you need to know about the psychology behind your relationship with money:

  • Emotion have a big role in your relationship with money.
  • Anxiety and avoidance create a vicious cycle in relation to money.
  • Psychologically, family and childhood will continue to influence you when you make money decisions.

Emotion and money

The most important emotions about money to become aware of are fear, guilt, and shame. Without awareness, these emotions will interfere with your rational thinking.

  • Common fears include fear of having too little money, fear of looking foolish, fear of causing envy.
  • Guilt is about feeling bad about a negative impact you've had on others. You may feel guilty because you have more than your friends, or are not charitable.
  • Shame is feeling troubled when you don't live up to your own values. Shame related to money involves feelings of not having enough money, avoiding thinking about finances, avoiding doing what you're supposed to do with your finances, feeling ignorant, and overspending.

Other emotions that influence your handling of money include envy, greed, and over-excitement.

How mental health influences your finances

Mental health problems can have a significant effect on your finances.

  • Excessive use of alcohol leads to poor judgment and inattentiveness to finances.
  • Depression can cause a loss of employment. People with depression also lack energy and a sense of purpose.
  • People with a mild expression of bipolar disorder can experience states with increased energy, decreased inhibitions, exciting plans, and are overstimulated to spend.
  • Adults with ADHD/ADD have the ability to pay intense attention to tasks that really interest them while screening out the tedious or mundane.

Family and childhood influences of your finances

All families have their own psychology of money: what they can talk about, who should be in control, how important money is.

You may have experienced subtle pressures to correct the injustices perpetrated or suffered by previous generations. You may feel internal pressure to go against the family money mentality, or you may the first in your family to succeed and may want to give back to the family while neglecting your own financial needs.

Harnessing money emotions

Emotions can be useful. They tell you what matters to you.

Mild anxiety is motivating for example. Harness your emotions to attend to what you need to face.

SIMILAR ARTICLES & IDEAS:

Financial Literacy
Financial Literacy

While kids and teens get to learn about a lot of stuff, most families and schools do not teach them how to manage their money. In some families, it is considered a taboo subject and many friends a...

In And Out

Most of us know how much we make, but we need to pay close attention to how much money is actually coming in post-tax, and how much is going out.

You can start by writing down your Starbucks, Uber, Amazon, and take-out expenses, along with your car insurance, utility bills, subscriptions and memberships. Slowly we can realize that many of these small expenses add up to huge figures.

Review And Analyse

By noting down all your expenses on pen and paper, or on the PC excel sheet, you can start to review and analyse your spendings on a weekly or monthly basis. This will make you find innovative ways to save money, catching hold of ‘runaway spending’ that went unnoticed before.

Example: You could find that the $5 Smoothie that you had every day, could cost much less if you made it at home.

2 more ideas

Being an optimist

Being an optimist almost always provides you only with advantages. Including in the financial field. While you might be facing lots of stressful days, as we all do, there is certainly room for mor...

Enjoy the small joys in life

When living your life, you should definitely consider enjoying the small things. This applies to the financial field too: learn how to enjoy and celebrate every small win, as this will eventually lead to the great wins.

Do not take setbacks too seriously

Throughout your life, you are bound to live some pretty frustrating moments, such as the one when you lose a job. The most important is that, when this happens, you do not lose yourself too. Remember that setbacks are only temporary and you can always find a solution to improve your situation.

one more idea

The body positivity movement
The body positivity movement

Body positivity is the idea that all people deserve to have a positive body image, regardless of shape, size, and appearance.

The major goals of the body positivity mov...

History of the body positivity movement

The body positivity movement has its root in the fat acceptance movement of the 1960s. The body positivity movement began to emerge around 2012, first focusing on challenging unrealistic feminine beauty standards, but eventually shifting to the message that all bodies are beautiful.

Body positivity also means not beating yourself up over changes that happen naturally due to aging, pregnancy, or lifestyle choices.

Reasons for body positivity

The formation of body image starts early in life. Exposure to images of the "thin ideal" poses a danger. It develops the belief that beauty, success, and esteem are the result of thinness. When people internalize these ideas, they may experience body dissatisfaction, leading to depression, low self-esteem, and eating disorders.

Body positivity attempts to address these issues by helping people recognize the influences that promote a poor body image. They hope that people will adjust their body expectations and feel more positive and accepting of their own bodies.

2 more ideas

What willpower is
What willpower is

Willpower is the ability to resist or delay short-term desires to achieve long-term goals. Other names for willpower are self-discipline, self-control, self-regulation, determinati...

Benefits of willpower
  • Self-control appears to be a better predictor of academic achievement, a determining factor of effective leadership, and essential for marital satisfaction.
  • People who harness their willpower more effectively are happier, healthier, have better relationships, are further ahead in their careers, are more able to manage stress and deal with conflict.
The neuroanatomy of willpower
  • The prefrontal cortex (PFC) is the part of our brains situated right behind our forehead. It is responsible for abstract thinking, analyzing thoughts, and regulating behavior.
  • The PFC controls what we think about, what we pay attention to, how we feel. Studies point out that this part of the brain is only fully developed around age 25.
  • The "I will power" is controlled by the region near the upper left side of the brain and helps you start and continue with not so fun tasks.
  • The right side handles the "I won't power," preventing you from acting out on every impulse.
  • The "I want power" sits in the middle of the PFC and keeps track of your goals and desires.

8 more ideas

Falling in love

To us, being loved in a relationship is perhaps the highest ideal. It gives our lives meaning and purpose. Being loved validates our sense of self-esteem and soothes our fears of loneliness.

Whom We Find Attractive

Our self-esteem, mental and emotional health, positive and negative life experiences, and family relations all influence whom we’re attracted to. 

The Ideal Stage of Romance

There is an amount of healthy idealization that helps us fall in love.

However, if we’re depressed or have low self-esteem, we’re more likely to idealize a prospective partner and overlook signs of trouble, such as unreliability or addiction, or accept disrespectful or abusive behavior. A lack of a support system or loneliness might also blind us to potential faults.

It is far better to first deal with these concerns before entering into a relationship.

3 more ideas

A toxic relationship

Is any relationship between people who don’t support each other, where there’s conflict and one seeks to undermine the other, where there is competition and there is disrespect.

...
What makes a relationship toxic

People who consistently undermine or cause harm to a partner (whether intentionally or not) often have a reason for their behavior, even if it’s subconscious. 

Maybe they were in a toxic relationship, either romantically or as a child. Maybe they didn’t have the most supportive, loving upbringing. They could have been bullied in school. They could be suffering from an undiagnosed mental health disorder.

Warning signs

The most serious warning signs include any form of violence, abuse or harassment, which should be dealt with immediately. But in many cases, the indicators of a toxic relationship are much more subtle: Persistent unhappiness, negative shifts in your mental health, personality or self-esteem, feeling like you can’t talk with or voice concerns to your significant other.

one more idea

The cash flow formula
The cash flow formula

The word "budget" is often synonymous with restricted and rigid, making you want to avoid it. Instead, use the term "cash flow."

The formula for cash fl...

Decide how strict you need to be with y our money

Your budgeting style will change over your lifetime. You may use the envelope method when you need to be stricter with yourself.

Some people feel less stressed when they use budgeting styles that track every penny. Others find it is enough to run cash flow and know there's some money left each month for nonessentials. They don't need to itemize where every dollar is spent. See what style of budgeting support your goals and sanity, then adjust as needed.

Know when to stop trimming

Much personal finance advice focuses on making cuts. The information is useful when you're trying to avoid mindless spending. However, there is a time to shift your focus from slashing to earning.

Polish your resume, and apply for open roles that could be earning more. If you're not looking for a career move, a side hustle can help increase your income.

one more idea

The Investor

People who invest are those who love the risk, trade frequently and have enough confidence to think they will beat the market.

A 2011 study found out that most investors u...

The Big Spender

The Big Spenders like to make social statements by having the latest car, clothes, or phones. They use the money for love and attention and are the main representatives of consumerism.

Advice: Think twice before making a purchase and try to filter the things that you really need from those bought by reflex.

The Ostrich

The Ostrich is someone who would rather bury their heads in the sand than organize their finances. 

Advice: Ostriches should try to take slowly their heads out of the sand. They should try to examine their finances, take a close look at a better saving rate and consider approaching a financial planner.

2 more ideas

Different types of "shopaholics"
  • Compulsive shoppers: Buying when they are feeling emotional distress.
  • Trophy shoppers: They are always looking for the next great item.
  • ...
Socially acceptable

Shopping can be socially acceptable because consumerism is continually pushed on us in the forms of posters, adverts, and signs.

Shopping is also a way of life: You need food and clothing from stores. Even if you try to stop compulsive buying by avoiding the stores in person, there is still a world of online shopping.

Addiction vs compulsion
Addiction describes trying something, becoming emotionally and physically dependent on it, and then becoming psychologically and physically addicted to it. People who struggle with addiction have explained feeling euphoric, elevated, happy, complete, and whole when they partake in their addiction. Compulsion refers to a specific, intense urge to do something. People who struggle with a compulsion explain feeling immense relief and relaxation from completing behaviors that they feel compelled to do.

2 more ideas

Start a financial independence journey
Start a financial independence journey

One of the most challenging aspects to change your finances is getting started.

  • You may have an idea.
  • You may want to read more.
Set alerts to work on your finances

From the day you start saving, put a reminder on your calendar once a week to work for one hour on your finances in some way. It could include reading, balancing the accounts, optimizing cash flow, researching funds, etc.

There is no right number of times to check on your account. If you feel the urge to make decisions based on the news or market changes, limit how many times you look at your accounts. With experience, you will gain more control.

Dealing with demoralization when saving money

Once you understand where your money is going and what is left for savings, you may feel demoralised. Even though the amount is small in the first few months, you may be surprised by how much your balance grows in six months or a year.

The power of compound interest is what helps accounts grow exponentially and reach your savings goals quicker.

2 more ideas