managing our Finances
Have you ever wondered how our mental health affects our personal finances, spending habits and ability to manage proportionately according to our income?
Most people haven’t haven’t given it a single thought.
Let’s dive in.
Finances play a huge role in our lives, often becoming one of the biggest factors influencing the rise and fall of the stress we experience.
One of the most common patterns we’ve noticed is stress buying – put simply, purchasing things as a way to make us ‘feel better’. Whether we believe it or not, we all do it, whether it’s a 1p fruit salad (more like 15p these days!) from the local sweet shop, or a brand new BMW M135i from the local car dealership.
Here’s the thing: buying nice things is completely fine – 100% okay. It only becomes a problem when it gets out of control and starts to negatively impact your life.
So, why do we turn to spending when we’re feeling low – especially when our mood dips as our levels of serotonin plummet?
New shiny things make us feel good, it’s as simple as that. We’ve dealt with so many old things for months which then turn into years – something brand-spanking new instantaneously gives us that novelty feeling, it’s like a little reward for our brains.
Here’s the ‘however’…
This is more often than not, let’s say 99% of the time, short-lived.
When we buy something, the brain releases dopamine, a feel-good factor chemical, which is the pleasure and reward in our minds. What’s key though, and very interesting, studies have shown the anticipation (the browsing and ‘adding to basket’ stages) release more dopamine than when we actually have the item in our possession.
Wanting something is a very powerful emotion – when we are in the frantic stages of scrolling though various web pages, to find the right item to hit that ‘sweet spot’, and then the excitement of clicking ‘add to basket’, our levels of dopamine soar to an all-time high.
The below graph defines this perfectly.
The Real-life Analysis
The horizontal red line on the above graph above is the ‘default’ setting for humans which is the inevitable level of happiness we return to after positive and negative experiences in our lives. When something positive happens, the graph spikes (dopamine) and if it’s negative, it plummets (maybe cortisol or serotonin).
Think about what we mentioned above, now you’ve seen the graph. When we are ‘window shopping’ – more than likely on Amazon these days – we become excited about the possibility of owning something new – our dopamine levels spike. It’s at it’s highest level until the actual item arrives, and when it does arrive, it plateaus for a short time, but inevitable it drops like a plane falling from the sky.
Our state of mind shifts from wanting to owning the item in a matter of hours, sometimes days and rarely, it can be weeks. When we’re in possession of said item, the excitement fades away.
Think about the last materialistic thing you bought, how did it make you feel?
These peaks and troughs of the dopamine rollercoaster are 99.9% subconscious, we endure them all without really thinking about things in the moment – this is because this is how are brains are wired. When you delve deep into the psychology, it’s very interesting, and you will understand more about your buying habits should you monitor how you truly feel when you are going through the process of buying something new.
How Can i change?
Firstly, you don’t need to change unless you want to – If your spending affects your life and you feel it’s unmanageable – it’s probably worth speaking to someone about. Don’t Hide is not a support service for financial advice, however, if the signs are there, and you feel after reading this blog post ‘yeah, this is me’, or something along those lines, reach out, speak to someone, things can change with the right mindset.
Another post, which is due to be posted April 30th, namely ‘The Need, Want & Afford Method‘ is a good read for those of you who want something very black and white to potentially help you with purchases, it’s all about asking yourself if you truly need them.
Enjoy the post!
What are your thoughts?