How Money Changes Our Behavior

By John Loff / Posted: May 7, 2018 / 0 Comments / Posted in Finance and Psychology

How Money Changes The Way We Think And Behave

Greed is Good

Some great representations in Hollywood of the “rich vs. bad” person are Gordon Gecko, Mr. Burns, and Scrooge McDuck. They are very consumed with greed, and they show no compassion and few morals. But how exactly money changes our behavior?

You can’t place everybody who is ridiculously wealthy in the same category as those greedy, selfish, fictional characters, but people, in general, have negative thoughts about the rich, because everyone secretly wishes they were fabulously wealthy as well. The question is if there are concrete reasons to think that money causes people to be unhappy, evil and perhaps less human.

Money is Evil

At a seminar in social sciences, and titled ‘Is Money Evil,’ I was looking for the answer to that question.
Attendees were asked what everyday things made them feel happy. “Ice-cream,” someone said. “Facebook!”, “Long showers,” “Catching a bus just in the nick of time,” others chimed. It’s easy to imagine people giving up these simple pleasures for money, and you would not have to stretch your imagination too far to realize that people might be willing to do things they would not otherwise if offered enough money. You don’t have to go hunting the newspapers to realize that people will lie, cheat and embezzle if the rewards were big enough. You can put melamine in milk and plastic in rice just to get more money.

Money and Religion

Religion has a view on the topic as well. The relationship between money and evil started with Christianity. “For the love of money is a root of all kinds of evil.” And there was the story about the rich man and Lazarus, where the rich burned in hell while Lazarus enjoyed a rich afterlife.

When Enough Money is Enough Money

An interesting analogy on the subject, however, was once offered by the son of a wealthy businessman. He suggested that money is like beer, because drinking beer feels good, but only up to a point. After that ‘sweet spot’ has been hit, the good feelings disappear quickly.

It is the same with money. A certain amount of money might bring you happiness, but after that magic point, additional income isn’t going to make you happier. The amount of money that seems to hit the spot in the USA is $75,000 per annum. Researchers from Princeton University deduced this figure after going through the data of 450,000 Americans. The Research showed that emotional well-being increased as income increased, but flattened out around the $75,000 mark.

The Frailties of the Rich

Materialism, which values money above all else, often makes people unhappy.

  • Materialists have poor mental health.
  • They are depressed more often.
  • They have unstable social relationships and lower social productivity.
  • They and are less likely to participate in social events and civic organizations.
  • They have lower attitudes towards marriage and children.
  • They have less concern for the environment.
  • They might be more wasteful and less inclined to recycle.
  • They have less empathy and are less likely to cooperate.


Not everybody is wealthy, and not everybody is in debt or has a debt. But many wealthy people do have debts. Owing money is part of our society and our economy. You can have all sorts of different types of debt if you owe money for:

  • Credit Cards
  • Personal Loans
  • Mortgage
  • Car Loan
  • Business Loan

The Bible states in Proverbs 22:7 “The rich ruleth over the poor, and a borrower is a servant to the lender.” There are many emotional issues associated with being in debt. Unfortunately, not everybody makes the connection that the cause of many of these issues and frustrations are because of the debts they have incurred.

Here are some of the emotional problems that debt can cause:

  • Frustration – A lot of us that are in debt are frustrated because we don’t understand how we got in our situation, nor do we understand how to get out of it.
  • Embarassment – A lot of times we may feel embarrassed that we’ve allowed ourselves to get to the point of no control. We feel ashamed and sometimes will hide the enormity of our debt problems from our spouses, family, and friends; we don’t want people to know.
  • Anxiety – When bill collectors are ringing our phones we tend to have a hard time being calm and at peace. We often suffer from anxiety and the inability to sleep.
  • Inadequacy – Being in debt often make us feel less than adequate because we feel like somehow or another because we allowed ourselves to get in this situation that something is wrong with us. There is nothing wrong with you, and you may be surprised at just how many people are in the same situation.
  • Bitterness and Anger – When we’re in debt we often become snappy. We know that we’re irritable because we’re uncomfortable with the situation that we’re in, and we really don’t know how to handle that.
  • Excess Weight – Believe it or not, studies show that more times than not there is a high correlation between people that are overweight and those that in debt.

No Debt

Some people have the willpower to simply put off purchases until they have the cash available. By applying a systematic and logical approach to any major purchase, they can make a solid case for not taking out a loan. In fact, part of that process will have them set up target saving amounts on a weekly or monthly basis. By allocating a certain percentage of their income into a savings account, you would be surprised as to just how quickly you can have enough cash to buy what you wanted:

  • Car
  • Home deposit
  • Appliances
  • Furniture
  • Extensions and Renovations
  • Holidays

These same people always have enough money for a ‘rainy day,’ these being unexpected emergencies such as accidents, breakdowns, and sickness, for example.

I Can Do This

Regardless of the salary you are receiving, the secret is to live within your budget. Never spend more than you can afford. If you have to buy something expensive such as a new appliance, then put money aside each payday. Don’t spend money on frivolous items and try to cut down on your vices such as drinking and smoking.

Change your thinking. It’s essential that you train your mind not to desire everything straight away. One of the ways to help you change your attitude towards debt is to sit down and do the maths involved, compare cash payments to an interest-bearing loan.

Here’s a weird question to think about: What’s the difference between putting aside some of your salary and saving for what you want and taking out an easy money loan, or putting aside some of your salary to pay the debt?

When the lightbulb in your mind flashes on, you have the solution to debt!

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