The Link Between Money and Behavior

Hero

I launched FinanceSuperhero in April 2016 to help others save money, get out of debt, earn more money, and live the best life possible. Send me an e-mail or a comment if I can help you in your journey. Thanks for reading!

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9 Responses

  1. What a fascinating post, I loved it and the great message behind it! I think the key is being cognizant of the risk for money to change behavior. It certainly happens to many people and I’ve heard plenty of stories. I think it’s important to stay true to yourself and like you said, not be defined by money. But I’m aware of the risk and actively trying to ensure money won’t ever change my behavior.

  2. Compelling post, Hero – nice work!

    To your point re money and happiness, there is some research showing that people who give charitably (i.e., spend money on others) tend to derive greater happiness than people who spend the same amount of money on themselves. I think this supports some of the themes here.

    I would also point out, though, that charitable giving represents a decidedly gray area in most economic theory. Sometimes the deadweight losses associated with charitable gifts exceed those gifts’ benefits, leading to worse outcomes for everyone. Sometimes the presence of gifts misaligns incentives and leads to undesirable behaviors on the parts of givers and recipients. Economic study into the results of foreign aid to Africa is illustrative of some of the many pitfalls of charitable giving – and shows how hard it is to overcome them.

    Which is to say I’m not sure that charitable giving is always the best way to use money for societal good. (It can even be troublesome.) Here’s a question: Is it better to give $50 per day to someone free and clear of obligations; or is it better to pay someone $50 per day in exchange for valuable work? What benefits the recipient more, and what benefits society more?

    Regardless, your post is great work – a compelling read and really nicely done. Thanks, Hero!

  3. We face a lot of people asking for money here in our city, and it’s challenging because you want to help people but you know it’s probably hurting them through fueling addiction or other destructive habits. i think it’s important to stay generous but don’t reward bad behavior through giving cash to panhandlers, just a thought

  4. Great post! I feel like money and alcohol are the two most surefire ways to amplify the person that you already are deep down.

    I agree completely on donating money right now. I think it was Tony Robbins in Money: Master the Game that said if you won’t donate ten cents from your dollar, you’re not going to donate $1 million from your $10 million. I had been telling myself that I would donate when I had more, but after reading that I decided to start donating a little bit from each paycheck and build from there.

  5. That was a really nice post! I always try to tip well for good service and give generously to charitable causes (FinancialLibre’s comments notwithstanding). Just because I am trying to be thrifty and work towards FI, I don’t think I should push my problems on other people!

    It’s an interesting paradox I think. You might think that people working towards FI are obsessed with money or tightwads. In my experience, they are generous people who are more interested in living fulfilling lives and not being obsessed by money.

    Tightwads are just tightwads and are not necessarily interested in FI. Anyway, a tangential point to your article, but it got me thinking.

    • That’s funny Jon because I was thinking the same thing about money, giving and tightwads. I think you can get so focused on your “number” that it would be tempting to limit giving. But as Hero said, if you get an increase in pay – make sure to increase your giving as well. Love the depth of the post too – and you did realize it was #RonaldDahl day yesterday right? Saw that on Twitter for his birthday!

  6. Excellent post! I love the three takeaways at the end and really couldn’t agree more. I just think if I had a big raise but everything else stayed the same would that really make me happier? Doubtful. Instead pursuing things that I know right now make me happy is much a better route.

  7. I got busy and haven’t been able to comment as frequently on other blogs, but gosh have I missed out on yours. Thought-provoking as always.

    As someone who is fascinated in behavioral economics, I’ve spent a lot of time reading about what ‘level’ of wealth makes people happy. A lot of what I’ve read is simply once people get past basic subsistence, they start to face heavy diminishing marginal returns on money, and start to see more utility out of experiences – be it physical or emotional ones.

    Ultimately though it’s just a fascinating field. A field I hope continues to look deeper into the psychology of money.

  8. We have a line in our budget for charitable giving- it reminds us to be generous. Selfishly, we have found we benefit from being generous, because of the feel good factor from giving. Also, we try to make concious decisions about the charities we donate to and what impact our donation could make, and this makes areas of excess in our lives more transparent which leads to wasting less money on “stuff”.

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