The Dark Side of Money

The Psychology of Money is one of most researched fields among Behavioral sciences. It is an objective assessment of financial resources that is available to every individual and the behaviour that is triggered because of its presence. This is the side of money which is often outshined by the bright side of it. The presence of financial resources usually leads to any of these behaviour:

Money Avoidance Disorder

This is a disorder when the owners of financial resources ignore the presence of money due to the fear of the loss or guilt because of the accumulated financial corpus.

• Under spending: This could be a commonly occurring phenomenon when individuals have the tendency to spend much lesser than what is required to maintain a certain standards of living. They emphasize that the money not used is being “saved”.
  
  While saving is a habit that is encouraged, it should not be at the cost of your personal harm or deprivation. If that is the scenario then it could be a case of under spending. It comes from a deep rooted sense of fear of loss.


• Excessive Risk Aversion: A lot of investors come from a generation where financial means were limited. Hence, they had to make every penny count. In such a scenario they have been schooled to take non risk, unadventurous means of investment as a little less return was acceptable to complete loss of corpus.
  
  This risk aversion stays despite improvement in financial conditions. Investors still have a tendency to stick to “safe investments” and not venture into “risky investments”. The tendency of investors even today is to avoid “unnecessary risks”


• Financial Denial: This is an extreme situation when an individual falls under financial stress. They go to extent of avoiding any stimulus which may remind them or indicate their financial status. They particularly avoid looking at cheque books or listening to news about financial markets.
  
  For example, if an investor lost heavily in the stock markets, he would avoid watching the news regarding the same because it would be a constant reminder of the loss. Upon recovery of the market he would further avoid the market because watching others make profits or the markets gaining all time high would be painful because of the personal financial loss.


• Financial Rejection: Individuals with a low self esteem are often riddled with a sense of guilt when they accumulate money. Hence, they try and get rid of the money because they feel they do not deserve it. This leads to a rejection of their current financial situation.

Money Worshipping Disorder

These disorders are the opposite of avoiding money. There are individuals who would go to any extreme to deny the presence of money. There are individuals who are excessively attached to money. The attachment to money does not indicate the presence of money either in personal or bank accounts. It is an attachment to the idea of money and all that money can buy and provide. People with such disorders have a tendency to look for ways to get money to spend.

• Compulsive Buying: This disorder is on the rise because of the presence of online shopping sites which gives the users a feel of the products virtually. This leads to an excessive need to shop and buy often leading to negative consequences like debt traps. Due to the rising trends in consumerism, one feels compelled to buy merely because we are presented with too many options.


• Pathological Gambling: It is one such disorder, where an individual is faced with a constant urge to gamble. This also stems from over optimism on the part of the gambler who keeps on believing that winning is inevitable to justify the constant gambling bouts. These usually lead to adverse financial conditions, debt traps and a constant cycle of borrowings.


• Workaholism: It is a state where an individual’s tax themselves to work extra hours and put in more effort that is usually required to accumulate more money. It reflects upon a state when someone measures their own self worth by their financial situation. In such a situation, being able to accumulate money becomes of prime importance. They equate life, living and lifestyle with money.


• Hoarding: We all tend to be attached to our assets or our bank balances. However, there could come a point where you want to make your finances inseparable from you. You start to hoard money or valuable assets. There have been a few incidents which have been noticed among the affluent where they buy expensive diamonds and platinum which are placed in high security vaults only to have their name related to the purchase. They keep accumulating these expensive purchases to give their position an entitlement of being social influential and financially well off.

Relational Money Disorders

If you are a firm believer in the institution of family, then you might also know that the downfall of a relative affects the entire family. The affluence of another relative reflects well on the entire family. Money is one aspect that is known to spoil the strongest of relations and strengthen the weakest of them. Often time our financial situations starts to affect our behaviour among our family members. While it is a sign of social support to stand up for your family in times of need, an extreme execution of such behaviour is what is usually termed as a disorder.

• Financial Infidelity: This is one such disorder which arises when you start taking decisions and making transactions without bringing it to the notice of your spouse or partner. You go to extra lengths to ensure that the financial transactions remain hidden. This disorder could arise from guilt of spending more than stipulated budget. Carrying out financial transactions without notice also gives a sense of power if the member feels like the submissive one in the personal relationship.


• Financial Enabling: This refers to an extreme situation, where an individual in charge of financial means feels guilt for their affluence because of their poor relatives. They feel compelled to share their finances. However, it could reach a stage where the relatives in need are being helped out while the giver’s needs are ignored. Such a disorder could lead to reversal of personal fortunes. For example, during periods of recession the affluent relatives feel guilty that they have money and jobs while a relative lost everything in stocks. However, in extreme cases of helping out an individual is succumbing to financial enabling.

Conclusion

While you have been reading this you may have thought that you belong to some of these categories or you could possibly have the disorder. You will be surprised all of us tend to exert such behaviour, differing in the intensity. Some of us mildly overspend, some overspend and go bankrupt. All of us have the habit of hiding away money under the pretext of savings. It is only when this behaviour tends to reach an extreme spectrum do you need to look out for help. While money comes with the promise of reversal of fortune it also brings with its dark side. It is up to you which side your money you want to embrace.