Does the amount of money we have affect our well-being? Does the need for money in a money-centric world harm our self-image?
According to numerous studies, it does. These studies link money to a decrease in one’s mental health and promotes a more negative attitude toward others. Our attitudes toward money and spending revolves around our motivational and behavioral traits. Being too careful with money combined with high materialism predicts bargain hunters and reluctance to spend.
People who are very conservative about money tend to be anxious and controlling, have lower self-esteem, and have a negative outlook on life. Meanwhile, people who are more carefree with money and more materialistic tend to hide their feelings and believe that they are happy, when they really are not. All of this research came to the conclusion that being both overly tight with money or overly loose with money are associated with lowered well-being.
How others see us has a huge influence on how we see ourselves and how we see others. The judgement that we place on ourselves and on others often stem from our own financial status. This judgement also applies to an individual’s spending habits. Depending on someone’s values, they may see a person who is very careful with money as being cheap or stingy, or they might praise them for being wise. On the other hand, people who are carefree with money can be criticized to be wasteful or be admired for being spontaneous. The kind of societal reaction that we receive can either significantly hurt our self-esteem or make us overconfident.
Feeling constant judgement often makes people vulnerable to excessive and compulsive to spending. As a result, these people are thrown into a lifetime of debt, guilt and low self-esteem. Being in debt can also cause severe depression and lower ones well-being. The relationship between money and well-being may best be described as an inverted U, with well-being increasing as money disposition moves from tight to loose and then declining as looser spending turns into compulsive spending.
Image Source: The Swarm Press
In a study done by Kasser and Ryan, the researchers set out to discover how one’s financial goals impacts one’s personal well-being. The study compared those who have intrinsic and extrinsic financial aspirations. Intrinsic goals are focused on good relationships, helping others and personal growth. These financial goals are set so that the individual “can have fun”.
While, extrinsic goals are referred to seeking only financial success. These financial goals are based on greed rather than fun. It is believed that people who place a high priority on financial success tend to be dissatisfied with their pay and job, making the extrinsically-motivated lifestyle unhealthy. In the end this study found that intrinsic motivators lead to a better, healthier lifestyle.
In today’s world, I feel that extrinsic motivations greatly overshadow intrinsic motivators. Extrinsic motivations put money at the forefront of their lives, overshadowing their intrinsic values. Many focus on making more money to gain respect or spend a significant amount of money on material things. On the other hand, people that choose not to spend their money or are unable to are judged for their conservative spending habits. As the studies above showed, no matter what your spending habits are, there are still judgements to be passed around, that can significantly hurt our mental health (well-being).
In the end, money and spending habits greatly affects one’s mental health. But, the greatest harm comes from the judgement that people pass on to others. If everyone stopped judging others based on their wealth or their financial status no one would feel the need to act a certain way to impress others, but rather they are able to be themselves and spend or save money in a way that they see fit.