When you think of science, what comes to mind? Atoms, technological advancements, the space-time continuum. These are all common attributions to the word science, but what about money?

Instead of relying on total recall, think outside the box about what science really means. Science is technically defined as a systematically organized body of knowledge on a particular subject.

Therefore, finance is a completely viable option to consider as a science. Finance is the study of money and how it is used.

While it’s easy to focus on the numbers and management of finance, there’s so much more that goes into it.

Before you jump to conclusions about why you may be failing when it comes to personal finance, take a look at the role biology can play in everyday money matters.


So, when it comes to your brain and your coins, what gives? Sure, you can say budgeting is the answer to all of your financial issues, but there’s more to it than that.

Reason 1: Your Brain’s Reward System and Spending

The brain is obviously a powerful organ within the human body. It controls what you do, how you think and even how you feel. But, have you ever thought about how it makes you spend?

A big influence on money management is decision making. Two common types of decision making that relate directly to how your brain functions are perceptual reasoning and value-based thinking.

Perceptual reasoning has to do with the information your brain processes using each of your five senses: taste, sight, smell, hearing and touch. Value-based thinking weighs the pros and cons of the decision that has to be made.

Each of these decision-making paths impact the brain in assessing which decision may be best for you at that particular time.

So, how does this relate to personal finance? Each day, you’re approached by thousands of decisions, including what to spend your money on. Depending on how you’re feeling that day, it may be difficult to resist frivolous expenses.

Personal finance is an endeavor that’s difficult to master on its own. And, when you throw emotions into the mix, it can sometimes be impossible to overcome. In fact, money can change the way you think and feel in many different ways.

From perceived happiness to being caught up in a modern consumerist culture, the effects of money on an average person can vary. First, studies show that there is a link between wealth and compassion or empathy levels.

Oftentimes, those from a lower economic status are more emotionally intelligent than those who are more prosperous, being able to pick up on subtle social cues like facial expressions. Additionally, research has been gathered to show that wealth can influence moral judgement.

Perhaps most paramount though, the brain associates how you feel directly with your actions. Similar to substance abuse, you can also become addicted to spending money through compulsive behavior.

This is known as a process addiction where the brain is affected by mood-altering chemicals, like dopamine, through learned activity.

While this is sometimes done unconsciously, the person is influenced by the “high” they receive from doing these behaviors and bad habits like using drugs, eating food or even spending money, come into play.

Have you ever had the urge to buy things without a distinct reason or necessitating a need for that specific item? Known as impulse buying, this type of compulsive behavior is similar to both perceptual reasoning and value-based thinking.

Before you purchase something, you use your senses to assess it’s worth and how it will fit into your life. Next, consider the pros and cons of the purchase.

Many impulse spenders tend to be social, status-concerned and image-conscious which results in buying things that improve their appearance in the eyes of others, either by economic standing or physical impression.

Keep in mind though, impulse spending isn’t always bad. If you spread it out and keep things affordable, it can actually queue the rewards system and reinforce positive behavior. But with the quest for more as the standard dream in modern society, it’s easy to see where these lines can cross into problematic behavior.

Reason 2: Money and Mental Health

In today’s society, there is a much more open, honest conversation being had about mental health. This includes the effects that money management can have on a person’s mental wellbeing.

While it’s normal to worry about money, there are many times when your relationship with it can have serious consequences on your mental health, including depression, anxiety and other full on disorders.

According to a recent study, 44% of Americans state that the number one stress in their life is money.

This staggering statistic puts other likely stressors such as personal relationships and work challenges to shame, proving that financial stability is of utmost importance to many consumers. Furthermore, almost a quarter of the participants in the study claimed their financial stress contributed to their feelings of depression and hopelessness.

The average consumer is also at risk to suffer from a range of disorders like hoarding, workaholism, financial infidelity or pathological gambling. These disorders further a person’s self-destructive financial behaviors, leading to even more negative psychological impacts and facilitating their future emotional despair.

Even more evidence suggests that the link between poor money management and mental health can have fatal results. The amount of stress that tolls on your body during periods of financial instability can affect your immune, digestive, sleep and reproductive systems, especially if you have an underlying condition like heart disease.

People who have high financial stress are also twice as likely document poor overall health and four times as likely to report depression.

Additionally, those with debt mounting up are more prone to develop a mental health issue, anxiety, depression and psychotic disorders in particular.

Seeing as deficient financial health is the second most leading cause of suicide behind depression, it’s clear that the relationship between money management and mental health is as intrinsic as it can get.

It’s also crucial to note that these mental health issues can hinder decision making and self-control as well as decrease the likelihood of employment.

Planning for the future and problem solving can become nearly impossible for those enduring mental health struggles, continuing the vicious cycle time and time again.

So, how can we as consumers apply these concepts to real life and avoid any mental and physical struggle?

The next time you’re thinking about an impulse buy, try out these…


Do Your Research

Doing your research allows you to find more ways to succeed at money management. Whether it’s paying down high interest debt or refinancing one of your loans to more favorable terms, like a mortgage, doing it at the right time can save you money in both the long and short term. Before you reevaluate your expenses to see where you can save, look into the pros and cons of making changes to any of your loans.

For example, consolidating debt can be a major asset to you as a consumer. It will improve your debt-to-income ratio and make it more possible for you to improve your credit score.

In turn, improving your credit score will allow you to be open to more monetary opportunities in the future, such as refinancing.

No matter what, staying aware of current trends in the financial market is sure to be a major asset to you as a consumer.

Rather than of sticking your head in the sand and becoming a victim of circumstance, take control of your finances by empowering yourself with knowledge and awareness of economic trends.

Implement Budgeting Strategies

Contrary to popular belief, your savings account doesn’t just magically add up. It takes hard work and dedication. If you’re struggling with creating a healthy nest egg, try implementing popular budgeting strategies to help lessen the blow of unplanned spending.

The first budgeting strategy to think about is the 50/30/20 rule. This type of budgeting is income based and one that many people use due to its accessibility.

To start, organize your expenses into three principal categories: necessities, lifestyle and savings.

Then, distribute your spending using the rule. 50% of your income goes toward essential expenses like housing, groceries and utilities. 30% of your income goes toward wants, rather than needs. Finally, the last 20% should be allocated to your savings account.

Another budget that is simple to incorporate in your everyday life is digital budgeting. This commonsense type of budgeting utilizes online apps designed to help you meet your savings goals. With constant notifications that track your every spending move, it will keep your budget at the top of your mind.

Many apps also set aside a certain amount of money each week into a separate account so you can see your savings grow over time. If you know you’re one to slip when it comes to dipping into your savings, this may be the perfect route for you to take!

Set Goals

Goal setting is a plan of action that you can benefit from in many areas of your life.

Though, when it comes to personal finance, it can be difficult to know where to start especially when pressure is rising from outside factors like societal expectations of success and even debt collectors.

The first step in setting goals is creating tangible, measurable objectives based on your desired end result. You can assess your progress and make changes to help reach milestones over time.

Another helpful tip for reaching goals is to keep notes of your struggles and accomplishments. You can write them in a journal or type them in a digital diary.

This will show you where you are more likely to triumph versus where you may struggle. Improving awareness of your own downfalls will help you recognize your triggers and further prevent you from making unnecessary purchases that impede your savings goals.

If you aren’t seeing any progress, this is a surefire way to see that your efforts are not working and that a change must be made in order to reach your goals. Instead of continuing on with actions that neglect your objectives, make changes early on so you don’t continue making the same mistakes over and over again.

Understand the Ramifications

While it’s not totally true that failing at finances early on in life will prevent you from being fiscally fit indefinitely, there are plenty of consequences of letting it fall to the wayside.

Your credit score is one major asset to you as a consumer. As long as you have a healthy report, you’ll be more likely to qualify for certain financial opportunities like getting approved for a loan or accessing certain credit cards. You can raise your score by doing a couple different things.

Paying your bills on time, keeping your debt-to-income ratio relatively low and paying off your balance in full are all feasible options for maintaining a healthy credit score.

In contrast, the ramifications of poor financial health can be extremely detrimental. Not paying your debts on time can get them sent to collections which can damage your credit score for years to come. You may also be denied future opportunities such as getting approved for a mortgage or being offered lowered interest rates.

While it may be pleasing to fill your life with all your wishes in the short term, prioritize your future wants like owning your home, vehicle or business to keep yourself on track in the long run.

Create Good Habits

Did you know that it takes 66 days to create a new habit? But with a little hard work and determination, creating good habits can go a long way, especially when it comes to your bank account.

Two staples that are vital to creating new habits are accountability and commitment. Accountability is the responsibility that is put in place once you start holding yourself liable for your own actions while commitment is the state or quality of being dedicated to a cause or activity.

There are several different ways you can ensure accountability. The most effective way to do so is to ask someone to help keep you on track.

This can be a trusted friend or family member who has your best interest in mind. It’s beneficial to surround yourself with people who support and encourage you to succeed in whatever your goals may be.

Commitment is also a key component of creating good habits. Willpower can only take you so far, which is why dedication and hard work are still basic elements of this tried and true method.

Just remember that you can break commitment down into various steps:

  • Let others know what you’re trying to accomplish
  • Oust behaviors that do not support your goals
  • Include accountability and feedback
  • Invest in your efforts
  • Set a timeline

If saving money is your endgame, be sure to execute positive actions that help you meet your goals.

While it’s possible to fall off the wagon and give into past behavior, creating good habits gives you a guaranteed way to move in the right direction and get back on track.

Stay Off Social Media

Not only will you compare what you have to what others own, but you will also be targeted by ads that track your movement on the internet.

This specific type of marketing is called retargeting. It plays on the notion that if a desired good is dangled into a person’s face repeatedly, many will lack the willpower to prevent purchasing and sales will increase.

Not only do the metrics work against you, but your mental health may also deteriorate.

Since we already know the touchy relationship between financial fitness and mental health, taking precautionary measures to restrict the severe results social media can have on your mental health is imperative.

Limit your screen time to avoid the adverse effects social media can have on your outlook on spending and life in general. Resist the temptation to mindlessly scroll through your news feed and instead set time aside for something you are passionate about. Get outside and explore a new destination with plenty of nature and fresh air.

Also, keep in mind that social media tends to be a highlight reel rather than an accurate portrayal of real life. Most people don’t post their struggles on social media especially when the platform promotes superficial content like photos and videos. It’s vital not to compare what you have to others around you so as not to fall into the trap of materialism.


The next time you think about making a big purchase, investing in something or lending out money to your loved ones, reassess your financial situation to guarantee that you are able to afford it.

Tapping into satisfaction through impulse buying can bring about happiness, but keep in mind that the effects are only temporary.

Instead of digging yourself in a financial hole full of debt, stress and depression, use the knowledge you have built to make educated decisions that will support your lifestyle for years to come.

The Science of Finance: How to Rewire Your Brain and Succeed at Money Management

How to Rewire Your Brain and Succeed at Money Management

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