The mind-altering effect of money
We like to think we control money, because it seems so easy to control. Money is simple. Money obeys. But as we’ve all learned, we do not control money. In fact, money can relieve us of even our most deeply held principles with the bored ease of an usher taking a ticket. Everyone is vulnerable to its corrupting influence: in one University of North Carolina study, simply looking at cash led people to overstate their performance on a word test. Money, in other words, is not unlike a foxy blonde: a mere glimpse makes us act like fools. We do it over and over again – falling into debt, buying useless crap, churning our investments. Studies show that once we meet our basic needs, making more money won’t make us happier, yet we keep panting after it. It’s time to stop underestimating the power of money. The real question is: what is the nature of that power, and how can we take it back?
By MH Staff - Posted on 12th June 2013
The mind-altering effect of money
1 Prime the productivity pump
With the economy rebuilding, now is the time to take full advantage of your hardwired reaction to money. Just seasoning your office with reminders of money – or “money primes”, as researchers put it – can help switch your brain into work mode and lead to better performance in the workplace, says Dr Kathleen Vohs, the mastermind behind much of the research in this area. You might consider a money-themed screen saver, for instance. Or just ask a colleague to swing by every 15 minutes and whisper the word “money” in your ear. Money primes can be especially useful for those of us who are, by nature, too agreeable for our own good. Call it the “lackey syndrome”: studies show that overly agreeable men earn dramatically less, on average, than men who are more willing to risk the displeasure of others. Money primes, research suggests, may offer a potent defence against lackey syndrome, by cueing you to stand up for yourself instead.
2 Focus on time
Don’t be that guy. You know: ambitious but unbalanced. Awesome career but headed for a breakdown. So how do you outwit money’s allure and keep your career on track? One hint comes from a 2010 University of Pennsylvania study, which found that when people switched their attention from money to time, they tended to pursue goals more aligned with long-term happiness, such as hanging out with family and friends. “Focusing on the scarcity of a resource leads us to make the most of it,” says Dr Philip Cozzolino, a social psychologist at the University of Essex. The key is knowing how to switch focus. “That’s becoming harder with all of the technologies that constantly keep us connected to work,” says Dr Cassie Mogilner, the study author. So optimise transitional periods: if you listen to a money show in the morning, listen to music on the way home. For those who charge by the hour, the challenge can be greater. “They become so accustomed to placing a monetary value on their time at work,” says Mogilner, “that when no corresponding monetary value exists – like when they’re having dinner with family – they tend to dismiss the experience as valueless.” This info may help: one study estimated that simply switching from seeing family and friends less than once a month to seeing them most days is worth over a million rand.
3 Score the benefit, not the thing
Sunél Veldtman, author of Manage your Money, Live Your Dreams (R169, kalahari.com), says in South Africa many people place a high value on a second lifestyle home like a house in the bush or a holiday home. “These often become sentimental investments due to the family memories. It’s then unlikely that the family will sell the home – they become cash poor and asset rich in their old age”. Instead of purchasing the Mercedes or the Porsche, rent one for a weekend – and drive it hard. Better yet, skip the Porsche and take your nephew to the go-kart track and shred the asphalt all day long for a fraction of the cost. As for the holiday home – well, it may be fun to think about, but that’s because you’re not dealing with the leaky roof, the noisy neighbours and the monthly payments. As with the Porsche, you’re better off renting – not least because you can take a holiday somewhere new every year and put the money you saved towards, say, guitar lessons. Or maybe two tickets to Mozambique. You might try Vilanculos, the gateway to the Bazaruto Archipelago, where you can spend a few weeks sipping cocktails on a sandy beach for the price of some designer shirts. But whatever you do: don’t buy a boat!
4 Play hard to get
If you’re not buying experiences at least spend your money on stuff that can easily convert into experiences. Choose things you can interact with or things that can lead to interaction with others. Food is always a good bet for this reason. If you must have a fancy cooking toy, spend your money on bricks and build a pizza oven in your yard. You’ll remember the experience and enjoy reconnecting with old friends. Also, stick to smaller portions of high-quality goods. “The bigger your portions,” says Meyvis, “the more you consume, the greater your adaptation, and the less you’ll savour.” Then learn to enjoy the humble purchases. Don’t let your taste for fine wine prevent you from relishing a cold can of beer on a hot day. If all else fails, reset. “We call it ‘revirginising’,” says Dr Jordi Quoidbach, the lead author of the chocolate study. Depriving yourself of day-to-day pleasures restores your ability to enjoy them. Go camping, or swear off coffee for a week – and then blow your mind on a double espresso at home.
5 Spread the wealth
Times may be tight, but that only means your largesse will be more appreciated and more valuable as a result. Birthdays, of course, are the sanctioned time to spend money on others. Or buy a round of golf for your workaholic pal. If your brother likes beer, bring him back a specialty brew from your trip to Darling. Of course, some rules apply. “It’s okay to give money if you’re moving down an age gradient, or a status gradient,” says Lea. “But going the other way is a no-no. And horizontal money gifts are also rare.” Most of us know this intuitively. If your friend helps you fix a gutter, a pizza payment will be cool, but handing him cash won’t win points. Feeling magnanimous? Nicole Bouchard Boles, author of How to Be an Everyday Philanthropist (R115, kalahari.com), suggests kiva.org, a site that lets you make microloans to entrepreneurs in the developing world. “After years of living at the mercy of big bankers,” says Boles, “there’s something satisfying about doingit yourself: deciding which loans to fund.” If nothing else, spending money on others can serve as a useful reminder that you control your money – not the other way around.
The mind-altering effect of money