Check out our latest magazine... Read Online

Money Matters: Money on our Minds

Adele Trathan explores the psychology of currency and understanding our relationship with money

Every aspect of our lives is in some way influenced by money, yet we often overlook the psychological complexity of our relationship with it. Whether we realise it or not, our perceptions of money and spending can significantly affect our financial reality and wellbeing; and yet if anything, we are ebbing further away from this.

 

A class apart

Indeed, a 2019 study conducted by the Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA) found that 70% of people in the UK consider themselves part of the ‘middle class’, despite an uneven distribution of wealth. As a result, many people may perceive that, in terms of money, they have more, or at times less, than they actually do.

The debit disconnect

This intriguing disparity between perception and reality is dangerous when you factor in how credit and debit cards have transformed our spending habits, given that they provide a sense of ease, convenience, and sometimes a disconnect from the actual expenditure.

An experiment conducted at the University of Bristol suggested that using physical cash can significantly reduce impulsive buying compared to card payments. The tactile experience of handing over cash helps create a deeper connection to the transaction, making the loss more real and thereby curbing reckless spending.

Consumerism

Moreover, our relationship with money has undeniably changed over time. The shift from a cash-dependent society to a digital economy has rendered the 'pain of paying' more abstract.

Furthermore, the societal push towards consumerism, accelerated by aggressive marketing strategies and the rise of online shopping, has driven a culture of 'buy now, pay later'.

So while consumerism drives economic growth, it can also lead to adverse effects such as over-indebtedness and a disconnect from financial realities. A report by the Money and Mental Health Policy Institute found that compulsive buying affects up to 5% of UK adults, indicating the need for better financial management strategies and awareness.

So, is consumerism a foe or friend? It's a double-edged sword. On one hand, it fuels economic activity, innovation, and a wealth of choice for consumers. Conversely, it can create an unhealthy obsession with material possessions, foster financial recklessness, and lead to environmental degradation. Striking a balance is vital.

Making the link

Financial distress and mental health are intimately entwined, with poor financial management often leading to increased anxiety and wellbeing concerns. In a comprehensive study by the Money and Mental Health Policy Institute, it was found that one in four people in the UK experiencing mental health problems are also in problem debt – three times the rate among the general population.

Meanwhile, a survey conducted by the Royal College of Psychiatrists revealed that half of UK adults with debts have contemplated suicide.

What’s more, financial struggles can exacerbate feelings of despair and hopelessness, often creating a vicious cycle where mental health issues lead to worsening financial situations, further deepening the mental health crisis.

Healthy habits

As we navigate the intricate relationship with money, it's crucial to consider ways we can foster a healthy financial mindset. First, transparency with our personal finances can be a powerful tool. Regularly reviewing bank statements and budgets not only keeps us informed but can also help realign our spending habits with our financial reality.

Secondly, as discussed, using cash for smaller, day-to-day transactions can heighten our awareness of spending.

Lastly, we should continually educate ourselves about financial matters. Resources like the Money Advice Service, a UK government initiative, can provide free advice to improve financial literacy and promote sound money management.

Overall, while our relationship with money is complex, influenced by shifting societal norms, personal perceptions, and a rapidly evolving digital economy, understanding these influences is the first step towards fostering healthier financial habits in future, as well as a more secure, more realistic and happier life for us and those around us.

 

 

More from Features

  • Homes Extra: Make Room for Romance!

    Make room for romance in your life and your home this month as we fall in love with romantic dining, a bathroom spa experience and bedroom bliss...

  • Where Do Broken Hearts Go?

    Healing after a breakup is a challenging and deeply personal process. It takes time, self-compassion and effort, but as Adele Trathan explains, no matter how bad it seems, recovery is always possible

  • Weddings: Celebrate with a Celebrant!

    Sussex Celebrant, Beth Kirkham talks to Sara Whatley about her first job in a wedding dress shop, her most unusual requests, and being part of someone’s special day

  • Romantic Getaways

    Celebrate Valentine’s Day with a romantic getaway, Lisa de Silva says it’s the perfect opportunity to rekindle your love and escape the dark and gloomy skies

  • Home Style: Two Become One

    Alison Pike used her design skills to convert two semi-detached farm workers’ houses into a spacious family home with quirky touches

  • Spotlight Events: February 2025

    Your guide to all the best local events happening near you this month

  • What to Watch in February 2025

    From the return of Bridget Jones to a demonic monkey, here's the best of all the new films and TV shows headed to our screens in February

  • Money Matters: Go For Broke

    At a time when making money work for us seems as important as ever, it’s interesting to see that there is possible value in broken, non-working or incomplete items on online selling platforms

  • The Education Deliberation: Analogue or Digital?

    The way we learn is evolving but, as Adele Trathan reports, research continues to highlight the benefits of traditional pen and paper note-taking over digital methods for students’ learning and retention

  • If You Ask Me: It's Time For a Revolution

    ‘Start as you mean to go on’ goes the phrase – so Flo Whitaker’s kicking off 2025 by planning a revolution

  • Holiday Money Saving Tips

    Planning your holiday for 2025? Whether you are watching the pennies or want to get a good deal, Lisa de Silva suggests ways to make your holiday budget work hard

  • Home Style: Perfect Fit

    Alex and David transformed a small cottage into a spacious home that fits and flows perfectly for their family

  • Winter Woodland Walks

    Let’s go play in the woods! Come rain or shine Sara Whatley and her brood love a good yomp through the trees – along with a bit of den building of course

  • Homes Extra: Home Sanctuary

    Start as you mean to go on by creating your very own home sanctuary, a place to relax and enrich your life, says Sara Whatley

  • Coping with Midlife Anxiety

    Anxiety UK’s Dave Smithson speaks to Sara Whatley about how the midlife population is experiencing anxiety, and what to do about it

  • You're a Natural Beauty!

    Each month Adele Trathan and Sara Whatley look at seven elements of living the life of a natural beauty, helping you to enrich the mind, body and soul in balance and holistic harmony

  • Good Night, Sleep Tight

    Having trouble sleeping? Lisa Artis, Deputy CEO of The Sleep Charity is here to help with her exclusive sleep insight and guidance

  • 10 Ways to Live Longer

    We all strive for longevity in life – we want to maximise each day, each experience and each other. Adele Trathan offers ten ways to help achieve this goal

  • What to Watch in January 2025

    Your guide to all the best new films and TV shows coming to screens in January....

  • Home Style: Ancient & Modern

    Recycling architecture is a concept that fascinates designer Mirka McNeill Farmer. Her talent for creating a unique character property is clearly evident with this mix of ancient and modern