Everyone’s relationship with money is unique. It is formed by what you learned as a child about finances and how you prioritized values related to money.
Psychologists note that your spending patterns may also be affected by social pressures and advertisements. They could lead you to overspend or even spend without a genuine need.
Dopamine
Dopamine is a neurotransmitter in our brains that regulates reward-driven behaviors. It plays an integral role in addiction and compulsive disorder as well.
People who use drugs such as cocaine, nicotine or heroin experience a surge of dopamine that gives them an intense high. It is this surge of dopamine which makes these substances highly addictive.
The good news is that dopamine can be naturally produced through healthy lifestyle choices that promote positive behavior and boost the brain’s own production of this chemical. This may reduce feelings of depression, anxiety, stress, improve sleep quality and overall well-being.
Activities to increase dopamine production include spending time outdoors, meditation, exercising and getting enough sleep. A diet low in calories but high in magnesium and tyrosine-rich foods like bananas, avocadoes, chicken, almonds, green leafy vegetables and chocolate will all help to promote this feel-good neurotransmitter in the body.
Delayed reward discounting
Delayed reward discounting is a behavioral economic concept that measures how quickly rewards lose value based on the distance between when they are given and when received. It’s one of the principles responsible for impulsivity (Green & Myerson, 1996).
People with high levels of choice impulsivity discount delayed rewards at an increased rate. This behavior has been linked to adverse psychiatric outcomes such as substance abuse, risky sexual behaviors and attention-deficit/hyperactivity disorder (Amlung et al., 2016b; Jackson & MacKillop, 2016; Petry, 2001).
Contrary to state influences on delay discounting, trait influences on delay discounting are relatively consistent effects of an individual person’s thoughts and feelings that apply across different situations (Odum, 2011a). These traits also explain why some people discount nonmonetary outcomes more heavily than money in delay discounting assessments.
Scarcity
Scarcity is the idea that there are only so many resources to satisfy our desires. This holds true both for personal goods and global resources like air or gold.
No matter the source of raw materials, energy availability or time needed to get something, there are always limits on how much a good can be produced or sold. Therefore, goods and services in high demand but limited supply tend to be more costly.
Psychologists believe that people’s perception of scarcity causes them to desire and value more scarce goods over those which are abundant. For instance, if you’re standing in line for lemonade but there are cheaper options available, you might be willing to forgo the lemonade in favor of something else – this concept is known as an opportunity cost, which can motivate consumers to make better spending choices.
Self-esteem
Self-esteem is important for people because it gives them a sense of security and worthiness, which in turn enables them to tackle life’s difficulties more successfully and devise successful coping methods.
Self-worth can be heavily influenced by one’s beliefs about who they are, what they can accomplish, their strengths and weaknesses, as well as expectations for the future. Furthermore, it may be affected by messages received from those around them.
Self-worth can lead to greater levels of happiness, reduced stressors and better relationships. It may even motivate you more to reach your goals and try new things.
Low self-esteem can be caused by a variety of factors, such as negative self-talk and inflexible rules. It might also stem from lack of trust in yourself and others; in some cases, it may even be indicative of mental health disorders like depression or anxiety.
