While we all know that money can't really buy happiness, the fact that this saying even exists indicates that contemporary society associates money with psychological well-being. Especially in times of economic hardship, when individuals are faced with the very real possibility of job loss and poverty, the relationship between money and mood looms large.
In recent months, as the global economy has receded, stories of financially related depression and suicide have shocked the public. In California, a man and his wife took their own lives as well as the lives of their five children after losing their jobs as medical technicians. A similar incident occurred recently in Quebec, as Marc Laliberte and his wife carried out a suicide pact, including their three children, due to job loss and financial stress.
Fortunately these stories are not the norm, but they do suggest a connection between the economic downturn and psychological depression. Figuring out the exact nature of this relationship, however, is a complex issue. Dr. Phil Laird, Associate Professor of Psychology at Trinity Western University, points out that although we can expect some people to get more depressed, perhaps even suicidal, when the economy plummets, others will thrive - it really all depends on the value that individuals place on money.
"For some people, their lifestyle and their esteem are tied together. Living a certain lifestyle is part of them defining who they are. For those people, you may find that the stresses of economic hardship are too great and that they get depressed or think of suicide or other kinds of choices that they may not otherwise consider," says Laird.
In fact, the connection between the economic crisis and an increase in psychological depression may have less to do with actual money but more to do with three issues related to money, explains Laird.
The first is life-stability. It's fairly evident that few people like change. "People like to go to their job, and know their co-workers. That gives them stability and not a lot of worry," says Laird. In this case, it's not only the loss of an income that is upsetting, but the loss of a stable day-to-day routine.
The second is self-determination. "People want to be able to control their own destiny, they don't want to feel a sense of being out of control, and if their incomes go down and they lose their jobs, the personal feeling of control is lost," he says.
And finally, hope or "being able to plan a desired future," as Laird defines it. "This is where the change in the US presidential election is so important. Even if Barak Obama doesn't do anything, what he's trying to do is to instill hope in people, because if people start to lose hope in a desired future, something that's going to be better down the road, then that really does make them feel that their life is meaningless. The loss of hope can be significantly devastating."
Fortunately, hope and happiness don't have to be lost when the economy goes bad. In fact, Laird suggests some ways that we can actively use the current financial situation for our benefit.
For example, a downward economy is a great opportunity to refocus attention on the stable aspects of life, things like friends, family, and faith. Laird says, "Instead of thinking that money is going to buy happiness, which it doesn't, refocus on the things that are stable, true, and important."
Laird also suggests that this may be a good time to take control of your financial situation. While noting that it's natural to feel a sense of loss of control at first, he suggests becoming more informed of what you're invested in, talking to your financial advisor, and taking advantage of the opportunities created by a downward economy, such as lower fuel prices, cheaper investments, government tax incentives, and cheaper borrowing costs.
Finally, he cites economic difficulties as an opportunity for individuals to grow in self-knowledge and self-awareness. Times of financial depression, and hardship in general, give people the chance to figure out "the long standing characteristics of themselves that aren't effected by how much wealth they have, and the chance to realize that they are who they are whether they are rich or poor, that there is meaning that they bring into the lives of others, and that they have personal worth. The relational investment we make in the lives of others is vastly more important than any financial investment we might make," says Laird.
In the end, Laird says that the way we respond to coming economic fluctuations is largely due to the way in which we choose to perceive the situation. He advises making a choice to focus on telling yourself the "half-full" messages and fostering gratitude for what you do have. Laird suggests that gratitude and hope are not just important for propping us up emotionally; they are the characteristics that, once shared with others, will change the worldwide economic situation.
Dr. Phil Laird is an expert in social psychology and moral reasoning.
Last Updated: 2009-03-02