If money can make you happy, does debt make you sad?

Does money, even when borrowed, make us happier – or does the state of owing money add to our dissatisfaction and stress?

If money can make you happy, does debt make you sad?
A man dressed as banker swims with a giant mock Swiss bank note during the 71st 'Coupe de Noel' Christmas swimming cup in Lake Geneva on december 14, 2008 in Geneva. (Photo credit: FABRICE COFFRINI/AFP/Getty Images)

Humans have long debated the adage ‘Money can’t buy you happiness.’ Popular opinion suggests that, indeed, it cannot, but more recently researchers have challenged this notion. Based on extensive studies, investigators found that money, or income, can contribute to your happiness. In our capitalist society, income leads to increases in happiness to the extent that funds are required to attain the things that lead to happiness. By meeting needs for shelter or food, allowing the purchase of a home or groceries, or opening the window to experiences such as adventure or travel, money can increase our sense of satisfaction with life. 


But what about the relationship between debt and wellbeing? Does money, even when borrowed, make us happier – or does the state of owing money add to our dissatisfaction and stress? The ‘IOU’ is an ever-present and, at times, necessary evil that allows for a degree on the wall, a roof overhead, or a shiny car in the garage. Yet at what cost?

For my colleagues and I, the emotional impact of borrowing certainly merited study, given that 80 per cent of US households, and 70 per cent of college graduates, are currently in debt. A review of prior studies showed that stress from debt was two-pronged: it appeared to spill over and add to the psychological burden of life, but it was also a real drain on the actual resources required to pay off the debt.

To drill down deeper, our team analysed a large sample of college students and the impact of their student loans on subjective wellbeing. Much of what we found seemed self-evident: if a debt felt manageable, it was less damaging to an individual’s sense of wellbeing than if the debt felt overwhelming. A person’s sense of wellbeing varied with the source of the borrowed funds. Money borrowed from people or places charging less interest or offering more flexibility – subsidised student loans, for instance – results in less stress than money borrowed from financial institutions with exorbitant interest rates and no forgiveness policies. The emotional toll taken by debt varied with the degree to which an individual had other financial resources. A person whose debt was matched by investments or property had a security blanket to help them through. Especially important was the raison d’être for the loan. Debt undertaken for necessities, such as a home to live in, was less detrimental to one’s wellbeing; debt undertaken for an irresponsible splurge on unnecessary home renovations was more stressful.

So, is education debt less upsetting because it leads to levels of attainment necessary for many careers? Only to a certain degree. Unsurprisingly, our analyses showed that student loans lead to greater financial worry, which has a detrimental effect on life satisfaction. But the more that education led to real income, the less anxiety the borrower felt. We found that as students continued to pay out their debt over the course of up to eight years, happiness was reliably boosted by income and diminished by debt, until the two balanced out.

Is there any benefit to such studies, which seem to bear out the obvious? We think so.

When considering the issue of whether debt or income have stronger effects on the sense of wellbeing, it is helpful to understand whether income is merely the opposite of debt. After all, if debt and income are two poles of a unidimensional continuum, then comparing their relative strengths will not be substantively meaningful. But our team found an interesting juxtaposition between debt and income, and a far more nuanced relationship between the two: debt levels can accrue regardless of income levels. In fact, individuals who have higher levels of income also have access to higher credit and can incur higher debt. On the other hand, individuals who are financially competent will likely have higher levels of income and lower levels of debt – and this leads to an inverse relation between the two and the sense of wellbeing they provoke.

What appears simple, therefore, is somewhat complex. Our findings emphasise that students shouldn’t worry only about their credit scores when accruing large amounts of debt; erosion of the sense wellbeing and inner emotional life must be weighed as well. Students should understand, moreover, that not all debt has an equal impact. If you choose to carry some debt, a few considerations are key: only borrow what you can manage. Think hard about why you are borrowing the money and where it is coming from. And borrow only if you can back up the debt with income or other assets. If you consider these factors, then debt need not wipe that smile off your face.

Cassondra Batz

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This article was originally published at Aeon and has been republished under Creative Commons.

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Evolution proves to be just about as ingenious as Nikola Tesla

Credit: Gerald Schömbs / Unsplash
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Are we really addicted to technology?

Fear that new technologies are addictive isn't a modern phenomenon.

Credit: Rodion Kutsaev via Unsplash
Technology & Innovation

This article was originally published on our sister site, Freethink, which has partnered with the Build for Tomorrow podcast to go inside new episodes each month. Subscribe here to learn more about the crazy, curious things from history that shaped us, and how we can shape the future.

In many ways, technology has made our lives better. Through smartphones, apps, and social media platforms we can now work more efficiently and connect in ways that would have been unimaginable just decades ago.

But as we've grown to rely on technology for a lot of our professional and personal needs, most of us are asking tough questions about the role technology plays in our own lives. Are we becoming too dependent on technology to the point that it's actually harming us?

In the latest episode of Build for Tomorrow, host and Entrepreneur Editor-in-Chief Jason Feifer takes on the thorny question: is technology addictive?

Popularizing medical language

What makes something addictive rather than just engaging? It's a meaningful distinction because if technology is addictive, the next question could be: are the creators of popular digital technologies, like smartphones and social media apps, intentionally creating things that are addictive? If so, should they be held responsible?

To answer those questions, we've first got to agree on a definition of "addiction." As it turns out, that's not quite as easy as it sounds.

If we don't have a good definition of what we're talking about, then we can't properly help people.

LIAM SATCHELL UNIVERSITY OF WINCHESTER

"Over the past few decades, a lot of effort has gone into destigmatizing conversations about mental health, which of course is a very good thing," Feifer explains. It also means that medical language has entered into our vernacular —we're now more comfortable using clinical words outside of a specific diagnosis.

"We've all got that one friend who says, 'Oh, I'm a little bit OCD' or that friend who says, 'Oh, this is my big PTSD moment,'" Liam Satchell, a lecturer in psychology at the University of Winchester and guest on the podcast, says. He's concerned about how the word "addiction" gets tossed around by people with no background in mental health. An increased concern surrounding "tech addiction" isn't actually being driven by concern among psychiatric professionals, he says.

"These sorts of concerns about things like internet use or social media use haven't come from the psychiatric community as much," Satchell says. "They've come from people who are interested in technology first."

The casual use of medical language can lead to confusion about what is actually a mental health concern. We need a reliable standard for recognizing, discussing, and ultimately treating psychological conditions.

"If we don't have a good definition of what we're talking about, then we can't properly help people," Satchell says. That's why, according to Satchell, the psychiatric definition of addiction being based around experiencing distress or significant family, social, or occupational disruption needs to be included in any definition of addiction we may use.

Too much reading causes... heat rashes?

But as Feifer points out in his podcast, both popularizing medical language and the fear that new technologies are addictive aren't totally modern phenomena.

Take, for instance, the concept of "reading mania."

In the 18th Century, an author named J. G. Heinzmann claimed that people who read too many novels could experience something called "reading mania." This condition, Heinzmann explained, could cause many symptoms, including: "weakening of the eyes, heat rashes, gout, arthritis, hemorrhoids, asthma, apoplexy, pulmonary disease, indigestion, blocking of the bowels, nervous disorder, migraines, epilepsy, hypochondria, and melancholy."

"That is all very specific! But really, even the term 'reading mania' is medical," Feifer says.

"Manic episodes are not a joke, folks. But this didn't stop people a century later from applying the same term to wristwatches."

Indeed, an 1889 piece in the Newcastle Weekly Courant declared: "The watch mania, as it is called, is certainly excessive; indeed it becomes rabid."

Similar concerns have echoed throughout history about the radio, telephone, TV, and video games.

"It may sound comical in our modern context, but back then, when those new technologies were the latest distraction, they were probably really engaging. People spent too much time doing them," Feifer says. "And what can we say about that now, having seen it play out over and over and over again? We can say it's common. It's a common behavior. Doesn't mean it's the healthiest one. It's just not a medical problem."

Few today would argue that novels are in-and-of-themselves addictive — regardless of how voraciously you may have consumed your last favorite novel. So, what happened? Were these things ever addictive — and if not, what was happening in these moments of concern?

People are complicated, our relationship with new technology is complicated, and addiction is complicated — and our efforts to simplify very complex things, and make generalizations across broad portions of the population, can lead to real harm.

JASON FEIFER HOST OF BUILD FOR TOMORROW

There's a risk of pathologizing normal behavior, says Joel Billieux, professor of clinical psychology and psychological assessment at the University of Lausanne in Switzerland, and guest on the podcast. He's on a mission to understand how we can suss out what is truly addictive behavior versus what is normal behavior that we're calling addictive.

For Billieux and other professionals, this isn't just a rhetorical game. He uses the example of gaming addiction, which has come under increased scrutiny over the past half-decade. The language used around the subject of gaming addiction will determine how behaviors of potential patients are analyzed — and ultimately what treatment is recommended.

"For a lot of people you can realize that the gaming is actually a coping (mechanism for) social anxiety or trauma or depression," says Billieux.

"Those cases, of course, you will not necessarily target gaming per se. You will target what caused depression. And then as a result, If you succeed, gaming will diminish."

In some instances, a person might legitimately be addicted to gaming or technology, and require the corresponding treatment — but that treatment might be the wrong answer for another person.

"None of this is to discount that for some people, technology is a factor in a mental health problem," says Feifer.

"I am also not discounting that individual people can use technology such as smartphones or social media to a degree where it has a genuine negative impact on their lives. But the point here to understand is that people are complicated, our relationship with new technology is complicated, and addiction is complicated — and our efforts to simplify very complex things, and make generalizations across broad portions of the population, can lead to real harm."

Behavioral addiction is a notoriously complex thing for professionals to diagnose — even more so since the latest edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM-5), the book professionals use to classify mental disorders, introduced a new idea about addiction in 2013.

"The DSM-5 grouped substance addiction with gambling addiction — this is the first time that substance addiction was directly categorized with any kind of behavioral addiction," Feifer says.

"And then, the DSM-5 went a tiny bit further — and proposed that other potentially addictive behaviors require further study."

This might not sound like that big of a deal to laypeople, but its effect was massive in medicine.

"Researchers started launching studies — not to see if a behavior like social media use can be addictive, but rather, to start with the assumption that social media use is addictive, and then to see how many people have the addiction," says Feifer.

Learned helplessness

The assumption that a lot of us are addicted to technology may itself be harming us by undermining our autonomy and belief that we have agency to create change in our own lives. That's what Nir Eyal, author of the books Hooked and Indistractable, calls 'learned helplessness.'

"The price of living in a world with so many good things in it is that sometimes we have to learn these new skills, these new behaviors to moderate our use," Eyal says. "One surefire way to not do anything is to believe you are powerless. That's what learned helplessness is all about."

So if it's not an addiction that most of us are experiencing when we check our phones 90 times a day or are wondering about what our followers are saying on Twitter — then what is it?

"A choice, a willful choice, and perhaps some people would not agree or would criticize your choices. But I think we cannot consider that as something that is pathological in the clinical sense," says Billieux.

Of course, for some people technology can be addictive.

"If something is genuinely interfering with your social or occupational life, and you have no ability to control it, then please seek help," says Feifer.

But for the vast majority of people, thinking about our use of technology as a choice — albeit not always a healthy one — can be the first step to overcoming unwanted habits.

For more, be sure to check out the Build for Tomorrow episode here.

Why the U.S. and Belgium are culture buddies

The Inglehart-Welzel World Cultural map replaces geographic accuracy with closeness in terms of values.

According to the latest version of the Inglehart-Welzel World Cultural Map, Belgium and the United States are now each other's closest neighbors in terms of cultural values.

Credit: World Values Survey, public domain.
Strange Maps
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