”When I was young I thought that money was the most important thing in life; now that I am old I know that it is”, said the Irish writer Oscar Wilde. More than a hundred years after this phrase, is it true that money is the most important thing in life? The answer is debatable, it doesn’t matter if you have a lot or a little, learning to manage it is what will influence the quality of life of each person and their mental health.
According to the study ”High income improves our general evaluation of life, but not our emotional well-being”, carried out in 2010 by psychologist Daniel Kahneman and economist Angus Deaton, both from Princeton University, they mention that a higher income low could be assimilated to the emotional pain caused by unfortunate events in life, such as divorce, poor physical health and loneliness. However, the study also shows that emotional well-being tends to plateau when income rises, indicating that having more does not always mean being better off.
As if that were not enough, the current scenario, almost Kafkaesque, in which the world is facing a crisis caused by COVID-19 and the war between Russia and Ukraine, have led to an accelerated growth in inflation and effects negative in the global economy. According to the OECD, mental health care has been neglected and the number of people, especially young people, who face financial insecurity and unemployment derived from this pandemic has increased, generating financial stress that can cause different ailments: from anxiety, insomnia and even family problems. In addition, it can become a vicious circle, since in desperate moments decisions are made that can worsen finances.
And, as Juan Rulfo said in his story It’s that we are very poor: “So that everything does not go from bad to worse,” it is important not only to have financial education, but also to form a financial culture. The OECD defines financial education as “the process by which individuals acquire a better understanding of financial concepts and products and develop the skills necessary to make informed decisions.” But the financial culture goes further, since to form it a deeper, long-term vision and understanding of investments and financial products that are acquired is needed. And, although it is not necessary to know how a derivative or the stock market works to achieve that mental and financial health that all people want to achieve, it is important to know, on a day-to-day basis, the use that is given to money and, above all, Above all, recognize when you have a problem with personal finances.
After recognizing that you have a financial problem, it is time to start listing income, expenses and current debts. It’s amazing to realize how many small habits you can change and how they can add benefits to your financial health: from the coffee you buy every day on the way to work, to the interest earned by not paying a credit card on time. .
Developing plans organizing expenses is essential, as is committing to comply with them. Communication is an element that should not be overlooked, especially when the plan to cut expenses involves the family. Thinking about the future is important, but living thinking about the future has the consequence of suffering from a disorder such as anxiety, Therefore, taking one step at a time in personal finances and seeking help, whether to know how to invest, understand a financial product and reflect on how it affects emotions when you have a money problem, can be important factors for improve the relationship with money, mental and financial health.