The Psychology of Money

Maureen Robb's picture
By Maureen Robb on October 30, 2017

We’re surrounded by ads urging us to buy bigger houses, newer cars, extravagant vacations and more gadgets of every kind.

How does that make you feel? Is it hurting your health if you worry that you’re not keeping up?

The role of money in our society is complex, and it can affect one’s self-esteem and behavior in countless ways.

“The pervasive belief in American culture is that the more money you have, the happier you will be,” said Thomas R. Milam, M.D., a psychiatrist with Carilion Clinic Psychiatry and Behavioral Medicine and a professor at the Virginia Tech Carilion School of Medicine.  

“But in cultures where the amount of money you have is so important, the majority of people will feel that they ought to have more to be worthy as individuals,” he said. “And when everyone around you wants more, it’s contagious.”

The evidence shows that people who are well-off or even wealthy still often suffer due to uncontrollable factors. There are other hazards too.

“Having a lot of money can lead to greed and selfishness and the feeling that there is never enough,” Dr. Milam said. “That can be very destructive to a person and a family.”

“Every day we admit people to the hospital who are suicidal yet who have plenty of money. We also see people who feel they don’t have enough money and who turn to drugs or alcohol for temporary happiness.”

When he lived in cultures where money wasn’t so important, Dr. Milam said he saw “more contentedness.”

“It appears that money itself is not bad or good,” he noted. “It’s how people choose to be stewards of it that can either drive them to anxiety or suicide or can lead to great joy and happiness.”

“For me the key word is stewardship. How do we decide what is enough, and how do we develop a heart to realize that even in small ways we can bring joy to people by using our money wisely?”

This is a challenge facing individuals and communities across the country, Dr. Milam believes.

He is encouraged to see, particularly among millennials, a growing awareness that “having more stuff doesn’t always buy happiness.”

He also points to people who are well-off and who find happiness through what they are able to do for others in their community.

Another problem is what amounts to financial illiteracy. Most people aren’t taught the basics of managing money either at home or at school, often leading to financial distress as an adult.

Getting a handle on your own values and your personal finances is key, according to Dr. Milam.

“In order to be successful with money, you have to learn to be a steward of your money," he explained. "It’s as much a spiritual issue as an economic issue.”

To that end, he recommends books by Lynne Twist, such as The Soul of Money, about managing your relationship with money. Also books or videos by Dave Ramsey, such as The Total Money Makeover, which offers steps to help you get out of debt and manage your money.

He also likes Mint.com, a free personal finance management web service that helps you manage and track bank, credit card and other financial transactions.

The bottom line? Managing your money so that it reflects your own priorities in life can be a challenge. But it can also be freeing, fulfilling and life-affirming. Why not make the effort?
 
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