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6 Psychological Issues That Could Be Behind Your Money Issues
6 Psychological Issues That Could Be Behind Your Money Issues
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Money Psychology

6 Psychological Issues That Could Be Behind Your Money Issues

Njenga Hakeenah
February 2, 2022

Are you in a place where you are worried about your financial circumstances right now?

This feeling hits millions of people all over the world at different times and intensities. For many, financial woes arise from job losses, job insecurity, growing debt or piling bills.

No matter the cause, financial stress is a widespread concern in our world. Buyers and sellers, employers and employees all benefit from the creation of money.

Financial difficulties can have a negative impact on our health, relationships, and general well-being. Some of these difficulties can be so serious that they can negatively affect sleep, self-esteem, and sap one’s energy levels if they are always worrying about it.

A 2017 study by The American Psychology Association found that “money” was ranked second among the biggest stressors for Americans. 

Another study found that people who suffer from depression and anxiety were three times more likely to get in debt than those who are not. Money stress should be taken seriously since it can lead to unhealthy financial habits that may seriously hurt someone’s financial goals.

Psychological Issues Possibly Behind Our Money Issues

1. Negative Core Beliefs

I'm worthless, the world is scary, people are untrustworthy are a few examples of negative perceptions.

These deeply ingrained views can lead to a slew of issues including those that regard money. For instance, some will posit that money is the root of all evil, or that it is not that important or, it is there to be spent. Whichever way you think about and treat money, it will manifest in how you relate with it and the results thereof.

We have a built-in mechanism in our brains that helps us remember and avoid scary occurrences. To put it another way, a belief formed in childhood could have persisted into adulthood even though it doesn’t serve the purpose now. 

2. Anxiety

Our relationship with money, most of which is learned, determines if we will be anxious or confident when thinking about it. In different money situations, all of us process things differently.

Financial woes are a major source of anxiety and stress. Those who are burdened by debt may be apprehensive about reaching out for assistance, which can lead to social isolation. Mental illness recovery rates are significantly hampered by financial difficulties.

3. Financial Codependency

Counsellor Dave Jetson says that financial codependency is distinguishable when we prioritize the financial demands of others over our own. With this, expectations and resentment grow on both sides when the focus is on another's financial requirements. In a person's life, financial codependency can manifest itself in a variety of ways.

When one continually loans money to friends and they seldom get it back, then this could be a sign of codependency. For couples, one partner could concede their finances to the other and remain unaware of their financial situation.

Parents may continue giving to their children and the pattern continues into adulthood. In some serious cases, some parents will give until their death essentially leaving the now-adult child ill-equipped to chart it out on their own. 

Jetson says that financial codependency often reveals the ties attached to giving. In financial codependency, attached strings could be "I want you to adore me" or in a more manipulative way, "Now you have to do as I say".

4. Low Self-Esteem

Oxford University and the Joseph Rowntree Foundation released a study in 2015 which showed that low self-esteem was common among those who live in poverty. 

Issues like food insecurity and other hardships can lead to feelings of inadequacy. Because of their inadequacies and fundamental flaws as human beings, individuals may internalise negative preconceptions about themselves, such as "poor." 

Having a low self-esteem can lead to a lack of confidence and a feeling of hopelessness including when it comes to money matters.

5. Sleep Problems

The Alaska Sleep Clinic notes that financial stress burdens minds. This is especially so if one is consistently churning thoughts of what they didn't accomplish, worrying about tomorrow's to-do list and money. 

Stressing over unemployment, how much one earns or their mounting debt can lead to sleeping problems. This has a domino effect which worsens the financial situation that one is in since they cannot be optimally productive which may cascade to a job loss, impulsive spending, etc. which may lead to bankruptcy.

Money issues are so stressful that the 2021 Stress in America press report indicated that 72% of respondents experienced stress at least once in the previous month.

6. Addictions

Addictions are psychological and physical processes that could be either substances or behaviours.

A person's financial well-being is severely affected by their addiction. The Diagnostic and Statistical Manual (DSM-5) which is used by mental health specialists to diagnose mental health issues lists financial difficulties as a possible indication of gambling addiction.

All addictions are almost always associated with serious financial difficulties since they eat away at the core of a person's income in the form of money spent on the addictive substance or behaviour. In contrast, less time is spent on other activities like work.

Some of them like gambling and shopping are impossible without monetary exchange. This means they can lead to accumulating debt or getting into harmful habits to keep financing them.

How to Deal with the Psychological Reasons Behind Our Money Issues

Gaining control of your life, reducing stress, and building a more secure future are all possible outcomes of mastering the art of managing your finances successfully. To get started, try any of these suggestions:

1. Find New Ways to Make Money

If you're worried about your finances, you've probably already concluded that you require additional funds to cover your expenses. 

But figuring out how to expand your financial resources without causing yourself undue stress can be a challenge, too. If you're struggling to make ends meet, there are a number of methods you may get out of the hole. 

Are you employed full-time? Here Are Some Ways To Make More Money While Working 8-5

Unemployed in 2022? Here Are 10 Steps To Get You Back On Your Feet. 

2. Clean up Your Financial Life

Keeping tabs on your finances on a regular basis is vital to maintaining a healthy financial outlook. Put yourself in charge of your money by blocking out time each week to plan, organize, and declutter. You'll have less anxiety if you have greater power over the situation.

Learn More>> How To Do A Complete Financial Self-Audit And Rejuvenate Your Financial Life

3. Practice Good Stress Management Techniques in General

A low-stress lifestyle can be achieved while working to improve your financial status by implementing relaxation techniques and making other lifestyle modifications. Stress can be reduced by eating healthily, getting enough sleep, and engaging in some type of physical activity.

Learn More>> Understanding Financial Stress; Causes and Tips to Overcome

4. Recognize the Cycle of Debt

The first step to regaining control of your financial wellbeing is to recognize that you're in debt. Research suggests that you can pay off the majority of your bills faster if you focus on eliminating the most expensive accounts first. Consider interest rates when doing your study. To avoid spending more money in the long run, it's best to pay off the debt with the highest interest rate first.

Learn More>> Stuck in a Debt Cycle? Here are Six Ways to Help You Break Away

Reach out for support

The first step to getting better is accepting there’s a problem. Since you have already done this, the next is to reach out for support from people you trust to help you reduce stress. You can attend a support group for people dealing with financial stress or seek help from trained personnel.

Also, remember that you're not alone.

Read On>> Want to Achieve Your 2022 Financial Goals? Get a Money Buddy Now!

Njenga has over 8 years experience in multimedia and business journalism both as a writer, editor and producer. He has over 5 years of experience in radio broadcasting as a news reader, reporter and presenter. He is also a 2012 Earth Journalism Network-EJN Fellow.

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