We all know the adage: “Money can’t buy happiness.”
But if money provides the peace of mind that comes with knowing you can pay your bills and prepare for your future … can that possibly be true? In fact, new research shows that experienced well-being does tend to rise with income. What’s more, the study shows that this is true even beyond $75,000, the income at which past research has shown that an individuals’ happiness according to income plateaus.
For more information on the connection between wealth and mental health and its effects, we asked Dr. Konstantin Lukin, Founder and Clinical Director of the Lukin Center for Psychotherapy, for his input on how the two are connected, what to do if you feel down about your money, and more.
Dr. Lukin has over 20 years of clinical experience and started the Lukin Center to inspire healthier communities through compassionate, evidence-based mental health treatment. He and his team believe in science-driven education and aim to provide trusted, accessible resources to their patients. Here’s what he has to say about navigating these issues.
Why is it important for people to recognize that there is a connection between wealth and mental health?
Studies have shown that lower wealth accumulation and debt is associated with problems like psychological distress, depression, and anxiety. So, it’s no surprise that the inverse is also true, where people who report a more comfortable wealth asset portfolio report more psychological comfort and lower anxiety and depression symptoms. With that in mind, helping people gain knowledge and agency around increasing their financial assets — like owning property, and making strategies and effective decisions with their money — leads to a significant change in the form of more sustainable mindset and emotional well-being.
What are some of the biggest mistakes you see people make when it comes to the wealth/mental health connection?
I think acting on impulse or feeling is the biggest mistake people make when it comes to managing their finances. In a way, managing one’s finance is not too dissimilar to managing one’s emotions. Both require regulating, managing, and making sense of what you are experiencing or seeing in front of you. Since we have more immediate access to our emotions than desired wealth status, learning how to regulate one’s feelings so that decisions are from a strategy and long-term value, rather than impulse or urge, is important.
What is the best way to handle any wealth-related negative feelings that crop up?
In my practice I have noticed that jealousy, worry, sadness, and feeling disempowered are common negative feelings that come up during sessions where we’re talking about a person’s financial situation. In those cases, I typically suggest doing an exercise where I ask the client to separate their thoughts into two categories: productive and unproductive thinking. In the productive column, I ask people to write down everything they feel they have control over, like their spending, saving, and creating a budget.
The second column is all about life’s circumstances that are outside of one’s control, like the economy going into a recession and unfavorable economic policy. This helps the client to differentiate what to focus on — their productive worry — and what parts of life to lean in and be willing to accept with uncertainty.
FOMO — or Fear of Missing Out — is so rampant these days and can really have an impact on both people’s finances and their emotions. What are your suggestions for dealing with FOMO when avoiding social media just isn’t an option?
I think learning how to cope with jealousy and envy and having a clear path to achieving your own financial goals are the best ways to deal with FOMO. The former will help you manage big feelings around your desire to be or do what you see on social media. The latter will empower you to have a strategic plan to greater financial independence.
What are some of the other major wealth/mental health triggers you’ve seen, and how can they be avoided?
I think the biggest overall trigger is the experience of an uncomfortable or unpleasant emotion, like anxiety, sadness, or jealousy. Once that feeling is triggered, people typically do anything to make that discomfort go away. People will spend money impulsively on material things and experiences, just so that the negative feeling will fade. The best emotional antiseptic is the development of insight into one’s emotional life and learning coping strategies that help to soothe and manage emotional discomfort.
Since there is a connection between wealth and mental health, it might seem like making more money is the only solution. While this could help in some cases, bringing in more cash isn’t the answer if you don’t deal with the root cause of your emotions. The suggestions above are a good place to start, but for more help, consider The American Psychological Association and American Psychiatric Association for mental health help, or consider contacting a Certified Financial Planner (CFP ®) or checking out resources from the Consumer Financial Protection Bureau for financial help.
External links to the American Psychological Association or American Psychiatric Association website do not constitute an American Psychological Association or American Psychiatric Association endorsement of the opinions, products or services presented herein.
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