And how we can change the way it does.
The mind is a very powerful tool. And while we can make our minds work in our favor, our brains can be easily altered by a lot of factors. Since almost everything we do involves money, it can inadvertently manipulate our attitude and change our behavior. How does money change the way we think?
The root of all evil?
We’ve heart the adage “money is the root of evil” countless times already. Although it is a misquote from the bible (the actual quote being: “For the love of money is a root of all kinds of evil”), there may actually some truth in the saying that our spending habits can heavily alter our behavior.
According to an article published on Time, a correlation between money and empathy exists: the former diminishes as the latter grows. “In a series of experiments, the new study found that lower-class people were better at reading emotions on others’ faces—one measure of what researchers call empathic accuracy—than people in the upper class,” wrote Maia Szalavitz for the magazine.
(See Related Topic: 7 Cardinal Virtues Of Money Management)
Another article from the Stanford Graduate School of Business says: “Money earned through labor is more important to people than money that comes from other sources (such as investments or a winning lottery ticket). And the more money paid for each hour of work, the more important that money becomes.” This type of thinking leads to more attractive packages for CEOs, who equate their status and by extension, the salary they earn, to prestige and self-worth.
Finally, another study that connects money and changes in mindset was exposed by MarketWatch. According to the article, some people who are faced with money problems have a tendency to subconsciously make unethical decisions. “Subjects shown the money-related words were also more likely to make an unethical decision even when there was no direct financial reward, such as hiring someone who promises to share insider information from a competitor,” it said.
Train your brain
Money can definitely affect your brain, whether you like it or not. Now that we’ve heard of the negative ways money can impact the way we think and act, you might be wondering if there is still a way to rewire your brain in becoming more oriented toward savings. Fortunately, it’s never too late to become mentally savvy when it comes to money. Here are just some of the way to hack your brain in becoming more oriented to saving.
1. Rethink retirement.
Saving for the future will lead to one grand thing one day: retirement. While dreaming of nice sunset years may be good, a lot of people become complacent in making this happen since they think their retirement is still decades away. According to an article by the Week, you need to consider “your ideal retirement as really your second career life stage or your world traveler life stage — as opposed to merely the dollar amount you’ll need to get there.”
2. Look at the smaller details too.
When we think about saving, we visualize how we want to enjoy our efforts in the future: a nice house, a shiny car, or a vacation of a lifetime. While we were so busy daydreaming, we tend to forget how we will actually get there. Financial coach and entrepreneur Marie Forleo said that people should focus on how the little things can make the big picture. “While we may not feel or notice the impact of these small choices over a week or even a month, the cumulative effect of our daily thoughts and actions adds up to big results over time. Especially around money,” she wrote on her website.
3. Tune out of the “scarcity mindset.”
A lot of people fall into the quagmire of the “scarcity mindset,” a rabbit hole so deep it’s hard to get out. In this kind of thinking, people tend to look at the absence of some things around them—like a fat wallet, fancy car, or anything material—and they lose their focus on the things that matter more. “You’ll be so focused on what you can’t do, you’ll miss out on key opportunities,” said American accountant Toby Johnston. “When you think the pie is already set, it’s already limited, so competing against the next guy to get a bigger piece of the pie seems pointless,” he added. –Dino Mari Testa