from the world's big
Johann Hari knows that mental health is really a social issue.
- Johann Hari believes we need to treat universal basic income as an antidepressant.
- In his book, Lost Connections, he writes that 65-80% of people on antidepressant medication are still depressed.
- Instead of treating depression as a chemical imbalance, we need to look at the social causes really driving it.
Depression and anxiety: How inequality is driving the mental health crisis | Johann Hari<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="d7873b6d10e5d3a8dd73fc09c5c3314b"><iframe type="lazy-iframe" data-runner-src="https://www.youtube.com/embed/lRhEIz4GbK0?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span><p>Reports from Italians and South Koreans and Chinese tell us that sheltering at home is hard. These videos also reveal something important: The citizens know their compliance serves a greater good, protecting their health care workers, elderly, and immunodeficient peers. Over here we're experiencing an <a href="https://www.thedailybeast.com/coronavirus-is-making-a-lot-of-people-anxious-and-depressed-but-some-sufferers-actually-feel-better-now" target="_blank">uptick in anxiety and depression</a>. This isn't surprising in a culture that's all about the individual. </p><p>Depression is Hari's wheelhouse. He went through the ringer trying to fight it with prescription meds. In the process of conducting research for his book, a number of uncomfortable truths emerged. Namely, that the normal course for fighting depression—SSRIs and SNRIs—isn't working. They never really did, at least not in the long term. Reporting on extensive research on antidepressant medication, he writes, </p><p style="margin-left: 20px;">"The numbers showed that 25 percent of the effects of antidepressants were due to natural recovery, 50 percent were due to the story you had been told about them, and only 25 percent to the actual chemicals."</p><p>In 2010, journalist Robert Whitaker <a href="https://www.amazon.com/Anatomy-Epidemic-Bullets-Psychiatric-Astonishing-ebook/dp/B0036S4EGE" target="_blank">came to the same conclusion</a>: It's the environment, dummy. The problem is that the story of a chemical imbalance is easy to grasp. Complex social dynamics—income disparity, racism, verbal and physical abuse, gender discrimination, technology addiction—are cognitively taxing, though these are the real drivers of depression. "The medicine clearly doesn't <em>fix</em> a chemical imbalance in the brain," he writes. "Instead, it does precisely the opposite." </p><p>Hari writes that between 65-80 percent of people on antidepressants continue to be depressed. Clearly the drugs aren't working. What then to do? You have to address the root problem. Let's start with income disparity so that the citizens of the richest nation in the history of Earth <a href="https://www.wsj.com/articles/nearly-a-third-of-u-s-renters-didnt-pay-april-rent-11586340000" target="_blank">can pay their rent</a>. Perhaps, as Hari <a href="https://www.vox.com/2020/3/28/21196268/coronavirus-johann-hari-lost-connections-anxiety-depression-failure-rugged-individualism" target="_blank">recently suggested</a>, we should try universal basic income. </p><p style="margin-left: 20px;">"The single biggest thing that will affect people's anxiety is not knowing if you're going to be thrown out of your home next month or how you're going to feed your children. And I think there's an element of cruel optimism in telling a country of people living paycheck to paycheck that they should be responding to the anxiety they're experiencing this moment primarily by meditating and switching off the news. That's not going to solve the problem. The single most important thing that has to be done to deal with people's depression and anxiety is to deal with the financial insecurity they're facing."</p>
Bottles of antidepressant pills named (L-R) Wellbutrin, Paxil, Fluoxetine and Lexapro are shown March 23, 2004 photographed in Miami, Florida. The Food and Drug Administration asked makers of popular anti-depressants to add or strengthen suicide-related warnings on their labels as well as the possibility of worsening depression especially at the beginning of treatment or when the doses are increased or decreased.
Photo Illustration by Joe Raedle/Getty Images<p>Rather socialist of him, but really, the "we can't afford this" argument aimed at everything our administration can't monetize has always been wrong. It's getting dangerous out here, and it's not clearing up. </p><p>Hari isn't denying that there can be biological and genetic causes of depression. As he argues in his book, we completely overlook the social causes. Decade after decade, the American social structure has been fragmenting more and more. Our close relationships are shrinking. A million online friends will never replace the one person you can call at midnight to work through troublesome thoughts with. </p><p>Depression isn't a brain malfunction. That might be a <em>result</em>, but it's rarely the cause. Rather, Hari writes, it's "an understandable response to adversity." Right now, we're collectively trying to manage the most widespread adversity in generations. Pretending that you can slay that dragon yourself will only get you burned. </p><p>The first level is individual: strengthen your social connections. This might prove difficult at this particular moment, but framing this challenge as a societal issue is going to serve you better in the long run than taking it personally. Of course, none of this is easy. We've been raised to believe that each one of us can be our own brand—a rather lonely occupation. Humans are social animals. We need to honor that. </p><p>The second level requires participation in our democracy, which means voting for representatives that champion concepts like health care for all and UBI. This nonsensical argument that we can't pay for it while a tiny percentage of the wealthiest citizens pay little to no taxes is ludicrous. In <em>Lost Connections</em>, Hari reported from Berlin's <a href="https://kottiundco.net/english/" target="_blank">low-income neighborhood of Kotti</a>, where rent hikes were driving lifelong residents out. Conservative Turkish immigrants, German hipsters, and the owner of a gay club, usually wary of one another, came together to fight back. Not only did they win (not every victory, but some important ones), they were bonded by their shared sense of community. Many became friends. </p><p>Hari notes that El Salvador, which happens to be among the world's poorest nations, has canceled every citizen's rent and utility bills for the next three months. "If El Salvador can do it," he says, "America can do it." It will require, as he writes, rethinking what medicine actually is.</p><p style="margin-left: 20px;">"An antidepressant...isn't just a pill. It's anything that lifts your despair. The evidence that chemical antidepressants don't work for most people shouldn't make us give up on the idea of an antidepressant. But it should make us look for better antidepressants—and they may not look anything like we've been trained to think of them by Big Pharma."</p><p>If you want to fight depression and anxiety, you need to change the story you tell yourself. As a society, we need to empower everyone so that they can climb the bottom rungs of Maslow's <a href="https://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs" target="_blank">hierarchy of needs</a>—ensure everyone's health and provide enough financial support for basic needs—and encourage group participation instead of espousing the <a href="https://www.huffpost.com/entry/pull-yourself-up-by-your-bootstraps-nonsense_n_5b1ed024e4b0bbb7a0e037d4" target="_blank">bootstraps rhetoric</a>. It's not rocket science and it's certainly not modern psychiatry. It's common sense. </p><p><span></span>--</p><p><em>Stay in touch with Derek on <a href="http://www.twitter.com/derekberes" target="_blank">Twitter</a> and <a href="https://www.facebook.com/DerekBeresdotcom" target="_blank">Facebook</a>. His next book is</em> "Hero's Dose: The Case For Psychedelics in Ritual and Therapy."</p>
More frequent sex has been linked with higher income rates, according to a 2013 study.
- A 2013 study associated more frequent sex with higher income rates. The initial hypothesis suggested that medical, psychological and physical positive effects of sexual activity could influence wage factors in working adults.
- Maslow's Hierarchy of Needs all tie in with a healthy sex life, according to several studies listed below.
- Scoring high on Maslow's Hierarchy of Needs is directly linked to securing and maintaining high-wage income and making smarter financial decisions.
Maslow's Heirarchy of Needs<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjg2ODgyNy9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1NDU4MjU3MX0.ir1UBRR6mybW0P9EUbZp7-lzuAGwZ_jtM149kUDdknc/img.jpg?width=980" id="51749" class="rm-shortcode" data-rm-shortcode-id="7152b6185534098c8c6d0ebf5b1f4e41" data-rm-shortcode-name="rebelmouse-image" alt="maslow's hierarchy of needs concept businessman saving money" />
When our basic needs are being met, we are more motivated to excel in our careers, earning (and saving) more money in the process.
Image by Shutter_M on Shutterstock<p>The study referenced <a href="https://www.simplypsychology.org/maslow.html" target="_blank">Maslow's Hierarchy of Needs</a>, which outlines the basic human needs that need to be met before other motivations for better-living occur. This has been deemed as a "theory for human motivation," as American psychologist Abraham Maslow stated that when these needs are met, the individual can lead a happier, more fulfilled life.</p><p><strong>The five basic needs are: </strong></p><ul><li>Physiological </li><li>Safety</li><li>Belongingness</li><li>Esteem</li><li>Self-actualization </li></ul><div>Several studies (including <a href="https://news.illinois.edu/view/6367/205291" target="_blank">this University of Illinois study</a>) have supported Maslow's Needs theory, with the caveat that the definition of having these needs met can vary depending on where in the world you live.</div><p><strong>The link between Maslow's Needs and your sex life</strong></p><p>While there are many ways to fulfill Maslow's Needs, a healthy sex life (or happy relationship) checks a lot of the boxes.</p><p>Physiological needs such as the need for sleep, food, and oxygen don't require a mate, however the physiological need for reproduction does. </p><p>Safety and belongingness are qualities often associated with relationships, either romantic or platonic. Whether it's a lifelong friendship or a close intimate one, that human connection satisfies the second level of Maslow's hierarchy.</p><p>Esteem for Maslow refers to the need for respect, self-esteem, and confidence. Confidence and high self-esteem have been directly linked to active sex lives and vice versa, according to <a href="https://www.health.harvard.edu/mens-health/improving-your-self-esteem-can-improve-your-sex-life" target="_blank">Harvard Medical School</a>. </p><p><a href="https://www.interaction-design.org/literature/article/self-actualization-maslow-s-hierarchy-of-needs" target="_blank">Self-actualization</a> represents the highest motivations that we have as human beings. These are things that drive us to realize our full potential and help us become our most ideal self. According to <a href="https://journals.sagepub.com/doi/abs/10.2466/pr0.19220.127.116.111" target="_blank">this 1995 study</a> published in Psychological Reports, self-actualization and empathy are key predictors of high marital satisfaction.</p><p><strong>The link between a healthy sex life and a satisfying high-income career</strong></p><p>The reasoning behind Maslow's Needs is that if these basic human needs aren't being met, the human will not be able to function or thrive in society. People who have these needs met are happier, more fulfilled individuals, and are more successful in work and relationships. The more successful you are in your career, the better chance you have for higher-income jobs or salary bumps.</p><p>A healthy, active and happy intimate/sexual relationship is key to accomplishing Maslow's 5 Needs, which in turn is critical to helping you land a high-income job that you care about. </p>
Couples in successful relationships have mastered the skill of “financial harmony”<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjg2ODgzMC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYxMTQ3ODMwNX0.1tUYC84R6BbTrr7tBiRBchonYPWHLaI72QMmScH9TXM/img.jpg?width=980" id="16913" class="rm-shortcode" data-rm-shortcode-id="72763b9e40f525f26698a94c291aa76a" data-rm-shortcode-name="rebelmouse-image" alt="concept couple fighting over debt money finances" />
"Of all the intimacies you share, the sharing of money sparks the most arguments and creates the most resentment and confusion."
Photo by fizkes on Shuttestock<p><a href="https://www.theforumjournal.org/wp-content/uploads/2018/05/Financial-harmony-A-key.pdf" target="_blank">A recent FFCI (Forum for Family and Consumer Issues) study</a> which took place over a period of two years and included a total of 161 participants showed a direct link between what is described as "financial harmony," or agreeance over financial roles and ideas, and happiness of the overall relationship. The study was completely voluntary and confidential.</p><p>Money can be a major cause of conflict and stress in relationships and because of this, there is a significant link between good finances and happy relationships. More than 60% of participants in this survey stated that financial problems increased the amount of stress in their romantic lives. </p><p>Citing an article by Felton-Collins and S.B. Brown, the authors of the FFCI study wrote that "Of all the intimacies you share, the sharing of money sparks the most arguments and creates the most resentment and confusion.<em>"</em> </p><p>Marriage therapist Barton Goldsmith is quoted saying that "couples may find it harder to talk about money than about sex." This idea that sex is a delicate and controversial topic even in the most intimate relationships furthers the notion that being in "financial harmony" with your significant other is a key to a successful long-term relationship. </p>
The impact of sex on your finances, and vice versa, according to a marriage therapist<p>If given a choice between answering two questions (your favorite sex position or how much money was in your savings account right now), most people would choose to describe intimate details of their sex lives rather than list a number in a bank account. Why? Because sex is easier to talk about than money.</p><p>Sex is fun, interesting, and feels good - money is known to cause stress. Add to that each person's individual history and view on finances, and you can understand how talking about finances in any kind of romantic relationship can feel extremely difficult. </p><p>However, according to marriage and family therapist Lisa Bahar, not only does financial stress impact intimacy, but the lack of financial stress can improve intimacy (and vice versa). </p><p>"Couples who are experiencing financial strain have a higher likelihood of experiencing disruptions or difficulties in the bedroom", <a href="https://www.gobankingrates.com/saving-money/relationships/improve-sex-life-saving-money-financial-stress/" target="_blank">she explains in a 2015 interview</a>. "I see more and more with the strain that the economy/financial impact has on couples that there is a decrease in interest and a feeling of disconnection, which plays out sometimes by withholding or shutting down among partners." </p>
Is obsessive shopping a compulsion, an addiction, or both?
- Shopping might be one of the most socially acceptable addictions, but it's still a very powerful one that up to 6% of our population struggles with.
- Shopping addiction is a predominantly female problem, with around 90% of shopaholics being women.
- The neurotransmitter dopamine (which is also activated when we indulge in addictive substances such as alcohol or addictive behaviors like gambling) floods our system when we buy new things.
What is shopping addiction?<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjg0MDYyMy9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYzOTcxNDYzM30.QprVRdQCOgWcIF5nc4irSckH3gY4yextLmbJTrvfSYc/img.png?width=980" id="60235" class="rm-shortcode" data-rm-shortcode-id="72e3e40ed441495a2a4096d6ca5cf275" data-rm-shortcode-name="rebelmouse-image" alt="woman holding shopping bags" />
Photo by gpointstudio on Shutterstock<p>According to this <a href="https://www.psychguides.com/behavioral-disorders/shopping-addiction/" target="_blank">American Addiction Centers resource</a>, there are different types of "shopaholics":</p><ul><li>Compulsive shoppers who buy things when they are feeling emotional distress.</li><li>Trophy shoppers who are always looking for the next perfect item.</li><li>Flashy shoppers who crave the attention and adoration that comes with having nice, new things.</li><li>Bargain shoppers who purchase things through couponing and sales, even if the items are not needed or desired. </li><li>"Bulimic" shoppers who purchase and return items as part of a vicious cycle. </li><li>Collective shoppers who find emotional value and wholeness in having "complete sets" of things (for example, one specific shirt in each color).</li></ul><p><strong>Why is shopping addiction more socially acceptable than other addictions?<br><br></strong>On your way to work, you likely pass dozens of posters, adverts, and signs that are urging you to spend your money on the latest tech trends, clothes or fast food. However, the fact that consumerism is pushed on us by society isn't the only thing that can affect a shopaholic's behaviors; shopping is a way of life.</p><p>You need food from the grocery store, you need clothing, you need gas for your vehicle. Even if you try to curb your compulsive buying addiction by not going to stores in person, the world of online shopping is much more dangerous. With a credit card and a few strokes of your keyboard, you can purchase just about anything you can think of. </p><p>There is some debate between therapists, psychologists, and researchers over whether or not shopping addiction is a "real" addiction. <em>"</em>Very rarely,<em>" </em>says <a href="https://www.verywellmind.com/is-compulsive-shopping-really-an-addiction-22462" target="_blank">psychologist Elizabeth Hartney</a>, "is shopping addiction taken as seriously as addiction to substances like alcohol and drugs or other behavioral addictions such as compulsive gambling…"</p><p>Hartney suggests that most research on the topic of compulsive shopping is done by marketing companies, which means it's not seen as often by clinical professionals. The motives behind these kinds of research journals are purely from a marketing and consumerism standpoint and leave out the psychological behaviors that make up a shopping addiction.</p>
Is being a shopaholic an addiction or a compulsive disorder?<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjgzOTQ4NC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYwODI3NTc1OH0.kyXb_KpqUsZN_xba_4dNr1V_XAbTIxR9Q7xgScbCyYM/img.jpg?width=1245&coordinates=0%2C52%2C0%2C52&height=700" id="e2129" class="rm-shortcode" data-rm-shortcode-id="f7797eec627edfb8de19d865333925fe" data-rm-shortcode-name="rebelmouse-image" alt="concept compulsive online shopping man holding credit card online shopping" />
What is the difference between shopping addiction and a compulsion to buy things?
Photo by Ivan Kruk on Shutterstock<p>Part of the confusion around shopaholics (and why society has deemed this specific behavior as more acceptable than a gambling addiction, for example) may be the thin line that separates "addiction" from "compulsion".</p><p>Shopping addiction can be referred to as compulsive shopping, but it's important to note that a compulsion is quite different than an addiction. </p><p><u>Addiction:</u></p><ul><li>A broad term that describes an entire process: trying something (a substance such as alcohol or a behavior such as gambling), becoming emotionally and physically dependent on it, and then becoming psychologically and physically addicted to it. </li><li>Addictions have been described as all-encompassing: they are psychological, physical, emotional, biological things.</li><li>People who struggle with addiction have explained feeling euphoric, elevated, happy, complete and whole when they partake in their addiction. </li></ul><p><u>Compulsion:</u></p><ul><li>A more narrow term that often refers to a specific, intense urge to do something. </li><li>Compulsions have been described as "an itch you can't scratch" or a persistent thought process that won't leave you. </li><li>People who struggle with a compulsion explain feeling immense relief and relaxation from completing behaviors that they feel compelled to do. </li></ul><p>The characteristics of shopping addiction tend to blend in with what would be considered a buying compulsion. This may explain the hesitation to declare this phenomenon as either addiction or compulsion - because it can be either, or both, depending on each individual situation.</p><p><strong>Some commonly known characteristics of compulsive shopping disorder can include: </strong></p><ul><li>Shopping for unneeded items, so much so that it becomes a preoccupation, taking you away from daily responsibilities such as work duties and home life. </li><li>Spending much of your time shopping (online shopping counts) or doing intense research on items you wish to buy. </li><li>Extreme difficulty resisting the urge to purchase something, even if it's not needed or even desired. </li><li>An elevated sense of self-worth or euphoria when making purchases. </li><li>Continuing a shopping spree or unnecessary purchasing despite negative consequences such as debt or financial trouble. </li><li>Problems at work or with loved ones due to your uncontrollable shopping urges. </li><li>Deep satisfaction and calm state after making a purchase. </li></ul><p>Compulsive shopping and buying addiction have been well-recognized in the past century (with Hollywood even making movies that dress-down the issue, such as "<a href="https://www.imdb.com/title/tt1093908/" target="_blank">Confessions of a Shopaholic</a>"). As of the 2018 edition, it is still not listed in the <a href="https://www.psychiatry.org/psychiatrists/practice/dsm" target="_blank">DSM</a> (Diagnostic and Statistical Manual of Mental Disorders) as a compulsive disorder, despite its similarities to other disorders such as OCD or bipolar disorder.</p><p>For example, compulsive shopping can be linked directly to mood disorders such as anxiety, depression or bipolar - where compulsive buying and shopping serve as a "coping mechanism" for emotions they can't deal with. </p>
Is there a neurological reason we enjoy spending money?<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="df2293ca8a075a8b2f6a6ee87248a728"><iframe type="lazy-iframe" data-runner-src="https://www.youtube.com/embed/xDaBjc4QyWU?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span><p>As with any behavioral addiction, there are biological imperatives that increase our chances of becoming addicted to things that people do every day, like shopping. <a href="https://www.mentalhelp.net/blogs/are-you-a-compulsive-shopper/" target="_blank">Studies have shown</a> that up to 6% of the population suffers with shopping compulsion or addiction. Around 90% of those shoppers are female. While specific causes of developing a compulsive shopping addiction are not yet known, a deeper look into the psychological effect shopping has on our brains can provide some insight into this illness.</p><p><strong>The hormonal reaction the brain has when you shop...<br><br></strong>When you're considering a new purchase, you're anticipating a reward. Maybe you're shopping for a gift that you know your spouse will love, or a new phone to celebrate that promotion you just got at work.</p><p>Once the purchase is made, the reward pathway of your brain lights up. The neurotransmitter dopamine (which is also activated when we indulge in addictive substances such as alcohol or addictive behaviors like gambling) floods our system. Once that feeling wears off, we crave it again. This is how all addictions work. It happens to some of us without us even realizing it. Why else do we get so excited at the thought of 30% off at our favorite store in the mall?</p><p>But with <a href="https://www.elle.com/fashion/shopping/a41845/shopping-dopamine/" target="_blank">shopping addictions</a>, the thought of that reward becomes an all-encompassing, dependency trigger that causes those affected to lean into the craving for the dopamine rush despite not having enough money or time to continue the habit.</p><p><strong>With that in mind, it makes sense why we shop to celebrate and to feel good.<br><br></strong>A <a href="https://onlinelibrary.wiley.com/doi/abs/10.1002/mar.20404" target="_blank">2011 study</a> published in Psychology and Marketing found that retail therapy may have a lasting positive impact on our mood. Of course, there are downsides to this, such as spending money and associating purchases with happy moods which can quickly lead to a dependence. But the idea that buying things makes us happy is backed by science.</p><p>Shopping can also be a cause of celebration - look to your nearest holiday marked on the calendar for proof of that. </p><p><a href="https://link.springer.com/article/10.1007/s11205-006-9015-0" target="_blank">Research has suggested</a> that more materialistic people tend to be less happy and are actually more likely to become depressed. However, these negative side effects of shopping can often be overlooked in the short term because of how happy we feel after the initial purchase. </p>
How reframing your emotions and changing your daily behavior can help you save money.
- There is a psychological connection between your emotions and your spending habits. Many people live in a "reactionary" mode where they spend money in reaction to the day's events.
- Living in "intention mode" can help you reframe daily financial decisions - "how will this get me closer to my future goals?"
- Financial psychologist Dr. Tracy Thomas shares her tips for harnessing the power of emotion and intent to create a healthy, financially stable life.
How your emotions drive your financial habits<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjgzNDE2MC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTU5OTA1MDYyNH0.YTc70b9tnpbLTr7mE8Bm-sL7f_IRqlxVmE2zex76PLQ/img.jpg?width=1245&coordinates=0%2C0%2C0%2C41&height=700" id="ebf5d" class="rm-shortcode" data-rm-shortcode-id="bc1b6d1437bff56a07b0f928b3674e25" data-rm-shortcode-name="rebelmouse-image" alt="piggy bank drowning in water concept debt" />
Your feelings and emotions deeply affect your financial habits...learn how to control them for better financial decision-making.
Image by Lightspring on Shutterstock<p><a href="https://www.drtracyinc.com/about/" target="_blank">Dr. Tracy Thomas</a> is a psychologist and self-proclaimed emotional scientist who helps highly driven, emotionally sensitive people harness their emotional strength to live an elevated life.</p><p><em>"At one time,"</em> <a href="https://cheddar.com/media/the-psychology-behind-saving-money" target="_blank">Thomas explains</a>, <em>"emotional-sensitivity was believed to be a weakness. However, new work into emotional sensitivity reveals that emotionally sensitive people aren't just overly-emotional, 'touchy' or 'hyper-sensitive'. Without knowing it, they actually possess an incredible gift of creativity, intelligence and intuition."</em> </p><p><strong>Your feelings deeply affect your financial habits.</strong></p><p>When emotionally sensitive people combine their gifts with drive and motivation, it becomes an asset that can lead them to wealth, success, and happiness.</p><p>There is a psychological connection between your emotions and your spending habits. As human beings, our emotions drive most everything we do — and the choices we make with our money are deeply affected by how we interact and react to things that happen in our lives. </p><p><strong>Reactionary spending</strong></p><p>Living in reaction is something we do most of the time, according to Dr. Thomas. When we're in a reaction, we tend to create chaos. We aren't able to harness our emotional energy into creating positive investments and outcomes. </p><p>Living in reaction means that we're often simply reacting to our immediate situation, immediate wants, immediate "needs" with little thought to the needs of our future self.</p><p>The more reactive you are, the more you will simply "engage with life" instead of investing in building the life you truly desire. </p><p><strong>Intentional spending</strong></p><p>Acting with intention when it comes to your financial life doesn't mean removing all emotion from the situation at hand. In fact, you are just redirecting those emotions. </p><p>To act financially with intention, Dr. Tracy Thomas suggests that we consider what our future self would want us to invest in today. Making emotional choices doesn't have to be a bad thing - as long as those emotional choices live to serve you in the future instead of in the moment.</p><p>Living in a state of reactivity also creates distractions. We are sidetracked from our original, long-term goals and lose sight of what we really care about. Ridding your life of financial distractions can help you focus your energy on giving your future self what they desire most. </p>
Changing the way we think about finances<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjgzNDE1Ny9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYxNjk3NTgwOX0.Qn3VNMlVW1XAnaWBYn4uPP1PZ5miWewOyF82KUZp7Pw/img.jpg?width=1245&coordinates=0%2C89%2C0%2C15&height=700" id="0cdb0" class="rm-shortcode" data-rm-shortcode-id="e3e5e831e7303f12937668b575458d42" data-rm-shortcode-name="rebelmouse-image" alt="glass jars filling with coins growing plant concept saving money" />
Reframe what it means to "save money" into something that is more positive by placing emotional meaning in your investments.
Photo by ShutterOK on Shutterstock<p>Most people, according to Dr. Thomas, are reactive by nature. We react to our immediate emotions, needs and desires - often putting our long-term goals at risk. The first step in changing the way you interact with money is recognizing that there are emotions and behaviors in your life that need to change.</p><p><strong>Monitor your behavior: Am I going to be intentional or reactive today?</strong></p><p>A big part of this change, Dr. Thomas says, is monitoring your daily behavior and really taking note of when you are reactive and when you are intentional. </p><p>From there, you will be able to identify healthy and detrimental behaviors that are affecting your ability to live a financially healthy lifestyle. </p><p><strong>When you go to spend any of your money, Dr. Thomas suggests you ask yourself these kinds of questions: </strong></p><ul><li>Is this an intention? If so, what is my intent with this purchase?</li><li>Is this a reaction? If so, is this a valid reactionary expense or something I can avoid?</li><li>How will this purchase (or lack of purchase) bring me closer to my future goals?</li><li>Will this decision create my desired outcome?</li></ul><p><strong>Think about money as a motivation, not a restriction.</strong></p><p>Thinking about money in terms of "savings" can feel restricting and often unmotivating. However, thinking about money in terms of "motivation" for your future goals (whether that be a house, a car, a trip, etc) can help you reframe what it means to "save money". </p><p>In your mind, no longer is "saving money" something you "have to do" - it's something you want to do. Saving money becomes a goal in itself, rather than something that feels like a burden or responsibility. </p><p><strong>Refocus on what you are really invested in by adding meaning to your investments.</strong></p><p>Reframing what it means to save money includes refocusing on what your investments are, both financially and emotionally. </p><p>If you are currently invested in a home in which you want to do major renovations, that can be a financial motivator. Saving money (to later spend on renovations) will increase the value of your home. </p><p>If you are currently investing in a trip for your family, this can be a great emotional motivation. Creating life-long memories and providing a fun vacation for your loved ones is a wonderful goal to keep in mind that will help pull yourself out of reactionary choices and help you think more rationally when it comes to saving money. </p><p><strong>The importance of thinking about your savings on a deeper, emotional level</strong></p><p>According to <a href="https://www.briantracy.com/blog/financial-success/be-your-very-own-money-saving-expert-how-to-save-frugal-living-save-money/" target="_blank">Brian Tracy</a>, a leading sales, management, and business success advocate, one of the most important things we can do to better our financial choices is to become a life-long student of how to save money. </p><p>Investing is about more than just what's in your bank account - it's a way of life.</p><p>Dr. Tracy Thomas also believes that changing the way we view our savings (and money, in general) is about more than just making smarter decisions with the money we have - it's about changing the way we view money at all. </p><p><em>"Your savings goals are really your outcomes for your life. It's about creating something you really want."</em> says Dr. Thomas. If you spend your life in a reactive process, savings tends to lack the powerful drive that successful, wealthy people give to it.</p><p>While impulsive, emotional purchases are key signs of bad spending habits, there is merit to pulling yourself out of that reactionary spending mode and still maintaining and emotional intelligence when it comes to your spending habits. Completely separating your emotions from your finances can only make things more difficult, as there are no motivating, impactful meanings behind your financial decision-making processes anymore.</p><p>The key is to take yourself out of emotional reactionary spending and still maintain an emotional motivator to creating a healthy financial life. </p><p>Thinking about your finances as a powerful and emotional driving force that will create a better life for yourself and the things that are important to you in your life (your business, your family, etc) can make things more cognitively clear when it comes to making day-to-day financial choices. </p><p><strong><em>"The budget is not just a collection of numbers, but an expression of our values and aspirations."</em> </strong>- Jacob Lew</p>
Millennial income did not recover from the Great Recession like older generations', a disparity that can have dire consequences for future generations.
- A New America report shows millennial income and wealth accumulation lags dramatically behind their parents' and grandparents' generations.
- Resulting from the Great Recession, rising debt, and volatile wealth flow, this imbalance will impair future generations if not corrected.
- The report's authors argue the shortfall can be redressed with comprehensive policy changes.
Millennial income and debt<div class="rm-shortcode" data-media_id="5QcJogwN" data-player_id="FvQKszTI" data-rm-shortcode-id="3c3582d4e60da85860f0f5103d0511b6"> <div id="botr_5QcJogwN_FvQKszTI_div" class="jwplayer-media" data-jwplayer-video-src="https://content.jwplatform.com/players/5QcJogwN-FvQKszTI.js"> <img src="https://cdn.jwplayer.com/thumbs/5QcJogwN-1920.jpg" class="jwplayer-media-preview" /> </div> <script src="https://content.jwplatform.com/players/5QcJogwN-FvQKszTI.js"></script> </div> <p>The Great Recession catalyzed the millennials' poor financial state. Just as the generation entered the workforce, businesses began downsizing, income wages nosedived, and millennials had to compete against an established workforce for fewer jobs. Since then, <a href="https://www.stlouisfed.org/on-the-economy/2018/october/job-wage-growth-great-recession" target="_blank">wage growth has been sluggish</a> and <a href="https://www.brookings.edu/blog/up-front/2018/12/04/how-the-great-recession-hurt-the-middle-class-twice/" target="_blank">recovery uneven</a>.</p><p>But as the New America report illustrates, the recession is hardly the only factor at play. As is often the case, it's a nuance issue with many contributing influences.</p><p>For example, millennials are the most educated generation (<a href="https://www.pewsocialtrends.org/2018/11/15/early-benchmarks-show-post-millennials-on-track-to-be-most-diverse-best-educated-generation-yet/" target="_blank">for now</a>). <a href="https://www.pewresearch.org/fact-tank/2017/05/16/todays-young-workers-are-more-likely-than-ever-to-have-a-bachelors-degree/" target="_blank">They have received more bachelor's degrees</a> than previous generations, but that education has come at a cost. American tuition fees have <a href="https://www.forbes.com/sites/camilomaldonado/2018/07/24/price-of-college-increasing-almost-8-times-faster-than-wages/#77cd2d4066c1" target="_blank">increased faster than wages</a>, with the average annual cost for attending a public four-year university at just over $19,000 (2015-16). At $1.5 trillion, <a href="https://markets.businessinsider.com/news/stocks/millennials-student-debt-prevented-from-buying-homes-fed-says-2019-1-1027877519" target="_blank">today's student debt</a> has surpassed loans for cars and credit cards, stymieing those who hold it from putting that money toward asset accumulation.</p><p>"It is not surprising that the median wealth of all millennials with any debt at age 30 is lower than those with no debt who attended college; however, their median wealth levels are also lower than young adults who never attended college," the New America report states.</p><p>Between student debt, car loans, and credit card debt, millennials maintain a higher debt-to-income-and-asset ratio than previous generations at the same age. Importantly, this debt is less mortgage debt and more consumer debt. The difference being that the former later becomes an asset value, while the latter does not.</p><p>Add to this debt sluggish wages and volatile income from an increased reliance on gig jobs—which lacks the assurances and benefits of full employment—and the millennial balance sheet has taken a huge hit.</p><p>How bad a hit? According to the New America report: </p><p style="margin-left: 20px;">For families headed by an individual under the age of 35, net worth was 41 percent lower in 2016 than 1995. In contrast, households headed by someone over age 75 have seen their wealth rise. The recent growth of net worth among older households has been especially pronounced. It has increased 32 percent from 2013 to 2016, reflecting new growth in the generational wealth gap.</p><p>That generational wealth gap is further aggravated along racial lines. The report cites the median net worth of non-Hispanic White households at $171,000, compared to $17,600 for black households and $20,700 for Hispanic households. The authors chose the median because the mean proved substantially higher for all race and ethnicity households, "which reflects the concentration of wealth among the wealthiest in each category."</p><p>"Millennials are in a fundamentally different economic place than previous generations," writes Reid Cramer, director of the Millennials Initiative at New America, in the report. "Relatively flat but volatile incomes, low savings and asset holdings, and higher consumer and student debt have weakened their finances. The Millennial balance sheet is in poor shape."</p>
A generation feels the effects<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjA5OTg5My9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYwODY3NzgyNn0.Ijydl1EwddgRoe8tN0rNNd7OO1wvslHlJfEmZNc409c/img.png?width=1245&coordinates=0%2C86%2C0%2C1&height=700" id="2514b" class="rm-shortcode" data-rm-shortcode-id="a826e92b0cea9d8156c4b744ba7941d1" data-rm-shortcode-name="rebelmouse-image" />
This graph from the World Economic Forum shows millennial income wage growth alongside average student debt.
A cascading recession?<p>Inadequate wealth accumulation is not solely the problem of a single generation. Unless corrected for, it can have a cascading effect that hinders future generations, as parental wealth informs what economic resources can be invested in their children's development.</p><p><a href="https://www.sciencedaily.com/releases/2017/07/170712084747.htm" target="_blank">A study out of the London School of Economics</a> showed a strong causal link between household finances and children outcomes. It found evidence that low incomes prevent parents from investing in goods and services for their children. Additionally, these parents suffer from stress and anxiety, which can have further detrimental effects on their children. The study found that poor children are more likely to have worse education, health, and social-behavioral outcomes as a result. </p><p>The New America report also cites large bodies of research indicating that the family economic resources impact a child's human potential and their own economic outcomes.</p>
Redressing the wealth gap<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjA5OTg4MC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1MjQwOTI5NH0.Y6AV3kXfFfTTArWQG4m_B_r5HwHBhVZzok8bdqe0GCY/img.jpg?width=1245&coordinates=0%2C267%2C0%2C267&height=700" id="94384" class="rm-shortcode" data-rm-shortcode-id="f3c1f3c34c71bd57dc07f870f72408f7" data-rm-shortcode-name="rebelmouse-image" />
Democratic nominee Senator Elizabeth Warren wants to cancel student loan debt, a potential redress for the millennial income and wealth gap.