The relationship between your brain and money is a complex one. We admit that this topic is vast, and there’s no way we’ll unearth everything about it in this story, but we look forward to revealing more and more about this fascinating science in future discussions on the platform.
Looking at the neuroscience and chemistry of the brain can help us examine how money actually impacts our health. Is it possible that money can buy happiness? Here at the Beans, we both challenge and affirm that assertion. We know that we can get more joy for every dollar we spend that aligns with our personality and values. We also believe that as human beings, we can sometimes chase after material things in ways that leave us unfulfilled.
Recognize the threat
When we are in a state of “self-threat,” meaning that we feel unsafe, insecure, or under fire for some reason (it can really mean any reason), we are more vulnerable to spending more money than we typically would.
As it turns out, spending on credit makes us even more susceptible to falling into this trap. The pain vs. pleasure trade-off works against us when we don’t have to pay for it right away. When the stressor is a feeling of scarcity, our ability to make clear and efficient decisions is that much more compromised.
Our greatest tool to tackle this challenge is awareness. Recognizing that we are spending as a response to stress is the first step to doing something about it.
Challenge vs. consumption
Sometimes we spend because we’re looking for a challenge. Selecting a gift for a friend, seeking to shop more sustainably, trying to choose the perfect whatever-it-is to add to our wardrobe. In these shopping scenarios, the challenge, the hunt, is actually a part of the appeal of the process.
There are other things we buy – like toothpaste, for example, where the hunt feels like a massive waste of our time. Enter Amazon – click, click, toothpaste at my door. We love this kind of frictionless shopping.
Sometimes we get these backward, and that’s what can cause us unnecessary frustration. Daniel, a data scientist at Instagram from San Francisco, shares his experience: “One of the ways we tell ourselves the story that we are a certain kind of person is through the things that we buy. When I buy paper towels, I don’t care what brand I get. The problem comes when we let things that should be transactional become the challenge. Last week, I spent like half an hour on Amazon getting exactly the paper towels I wanted. I probably should have just bought the cheap one recommended by Amazon. I made something more challenging than it needed to be. I could have spent that time and energy turning something into a challenge that I actually enjoy the challenge of.”
Don’t get gamed – game the system
By understanding how your brain works when it’s “under the influence” of money, you can actually game the system that’s designed to game you. “It is interesting how it’s many people’s jobs to get us to spend money,” says our founder, Melissa Pancoast. “How are we defending our own best interests? There are years and years of research in marketing about how to sell you a car. It’s a highly optimized behavioral process that is designed to exhaust you through something called decision fatigue so that you’re so tired, but you still want the thing, so you end up buying it for more than you wanted. This is not a level playing field. By getting in touch with how we’re thinking and feeling when we shop, we have an opportunity to have more control over how our resources are actually spent.”
Doesn’t that just get your challenge juices flowing?
Contentment is the name of the game
Lindsay, a Financial Planner, has found her own version of winning: “Contentment is key when living within our values. When I didn’t have money, I’d spend money on things I didn’t even need. But now that I can afford them, I spend less money. Being content with myself and understanding what I value and what I want is key. “
How’s that for celebrating financial victories? It’s these little steps that put you in line for some of the opportunities you may have never thought possible – like generational wealth, the idea that you’ll have something of value to pass on to your next generation.
Take Away
“Knowing yourself is the beginning of all wisdom,” thank you, Aristotle. Becoming educated about the things going on in your brain while you’re blissfully (or stressfully) unaware will be the first step to finding solutions. Reflect on your most recent financial decisions and determine whether you’ve signed up for the right challenges or given in to impulse. Consider inviting a close friend or mentor into your life as an accountability partner. This person can hold up a mirror and help you see what’s genuinely going into your financial decisions and make sure they are values-based. Keep finding your freedom!