Feb 22, 2024
Money may not be an emotion, but it sure brings up a lot of them.
Haylie Johnson put out a TikTok video last year of her having this epiphany. The Oklahoma-based real estate agent shared at the time that she had been struggling financially more than ever before — and it was having a negative effect on her mental health.
Advertisement
“I’ve come to a really gross realization,” she said. “My self-worth, at least in my brain’s perspective, is heavily weighed on how much money I make. And that sucks.”
Johnson isn’t the only one to have had these feelings, particularly among her peers. Around 47% of Gen Z and 54% of millennials believe that financial uncertainty leads to feelings of depression at least once a month, according to a 2023 study by financial services company Northwestern Mutual. Only 39% of Gen X and 20% of baby boomers and older, in comparison, linked financial uncertainty to feeling depressed.
Why is it so bad right now?
Before you beat yourself up about your finances impacting your self-worth, take a look at the current economic climate. You may realize that you can at least partially blame outside circumstances for your financial uncertainty.
Inflation may have cooled since it hit a 40-year high of 9.1% in June 2022, but the cost of living remains high. The Bureau of Labor Statistics' most recent numbers, released Feb. 13, show a 3.1% year-over-year increase in the cost of all consumer items.
Freddie Smith, an Orlando-based realtor, argues in his own TikTok video that $50 is the new wage to be considered middle class, once you account for the higher costs of housing, food and child care.
Financial health can look different depending on which generation you belong to, as needs change over time. But if the cost of basic goods remains high, it’s no wonder people attach their mental health to things such as sticking to a budget or saving money.
Must Read
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — are you doing the same?
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Robert Kiyosaki says this 1 asset will surge 400% in a year and begs investors not to miss this ‘explosion’
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
What can you do about it?
If you’re feeling down on yourself because of your finances, there’s a an industry specifically designed to help you: financial therapy.
Advertisement
The Financial Therapy Association explains that practitioners use “therapeutic and financial competencies” to help you build a different emotional and behavioral relationship to money as a way to improve your overall well-being. This can range from understanding how past experiences and your beliefs shape the way you treat your finances.
If this all sounds woo-woo to you, learning behavior economics may be easier to swallow.
Behavioral economics is the study of human psychology as it relates to decision-making — including within the realm of finance. Understanding how emotions impact financial decisions can help you identify common behavioral patterns and improve your judgment. This often includes acknowledging biases that can cause you to misjudge something's true value.
It may seem counterproductive to shell out more money for things like therapy to fix your money mindset. But it’s okay to seek out help if you need it, especially during uncertain times.
With files from Moneywise contributor Vishesh Raisinghani
You May Also Like
- Turning 50 with $0 saved for retirement? Most people don’t realize they’re actually just entering their prime earning decade. Here are 6 ways to catch up fast
- Inside a $1B real estate fund offering access to thousands of income-producing rental properties — with flexible minimums starting at $10
- Vanguard’s outlook on U.S. stocks is raising alarm bells for retirees. Here’s why and how to protect yourself
- Here are 5 easy ways to own multiple properties like Bezos and Beyoncé. You can start with $10 (and no, you don’t have to manage a single thing)
Sabina Wex is a writer and podcast producer in Toronto. Her work has appeared in Business Insider, Fast Company, CBC and more.
