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Mind Over Money

The Psychology of Money and How To Use It Better

By Claudia Hammond
16-minute read
Audio available
Mind Over Money by Claudia Hammond

Mind Over Money (2016) reveals just how much our psychological baggage and irrational associations affect the decisions we make about money. From our nostalgic affinity for bank notes to how much we save to what we spend our money on, our behavior is influenced by years of “financial socialization” that we’re often completely unaware of. By acknowledging that this behavior is usually irrational, we can create strategies to help us rewire our brains and make money work for – rather than against – us.

  • Psychology buffs looking for insights into how our minds rule our wallets
  • Would-be savers who want to get a grip on irrational spending habits
  • Anyone who’s wondered if winning the lottery really would make them happy

Claudia Hammond is an award-winning author, broadcaster, and psychology lecturer who presents the BBC Radio 4 Program All in the Mind. Her other books include Emotional Rollercoaster: A Journey Through the Science of Feelings and Time Warped: Unlocking the Mysteries of Time Perception. Currently, she is Visiting Professor of the Public Understanding of Psychology at the University of Sussex.

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Mind Over Money

The Psychology of Money and How To Use It Better

By Claudia Hammond
  • Read in 16 minutes
  • Audio & text available
  • Contains 10 key ideas
Upgrade to Premium Read or listen now
Mind Over Money by Claudia Hammond
Synopsis

Mind Over Money (2016) reveals just how much our psychological baggage and irrational associations affect the decisions we make about money. From our nostalgic affinity for bank notes to how much we save to what we spend our money on, our behavior is influenced by years of “financial socialization” that we’re often completely unaware of. By acknowledging that this behavior is usually irrational, we can create strategies to help us rewire our brains and make money work for – rather than against – us.

Key idea 1 of 10

Money evokes strong feelings in all of us.

Imagine seeing a million dollars going up in flames in a bonfire, the enormous pile of crisp 50-dollar notes emitting belches of foul smoke as it burns away. How would you feel? Probably nothing short of unbridled horror and fury, right?

Well, that’s precisely what British art duo the K Foundation did in 1994: they lit one million pounds on fire. The motivation behind their action? To perform a conceptual art piece.

You’re probably asking why on earth two men would burn such a vast sum of money – money that could have been used to buy food for the hungry or houses for the homeless. How could they have been so selfish? 

The key message here is: Money evokes strong feelings in all of us.

According to one of the art duo’s members, Bill Drummond, they hadn’t actually destroyed anything real. They’d burned a big pile of paper rather than, say, apples and bread. 

And therein lies the inherent contradiction of money. In a way, Drummond is right. Paper money in itself is valueless – or at least it would be if you lived on a desert island where there was nothing to buy. 

But we don’t live on such an island. In reality, a million pounds can be exchanged for an enormous range of things. You could buy truckloads of apples or even create a huge apple orchard that could feed schoolchildren for generations to come. 

If the K Foundation had destroyed a yacht, or a diamond ring valued at a million pounds, they may have received less of a backlash. But instead they destroyed something that was essentially a blank check for everybody’s dreams and aspirations. Understandably, this led to them facing a huge amount of controversy.

The backlash the art duo received derives from a simple truth: we all imbue money with meaning. We imagine what we could do with it, or how it could make our lives easier, happier, and more powerful. We resent others who have more of it. And we mourn the times we’ve lost it. 

Money affects our lives so much that many yearn to enter a currency-free utopia. Imagine a world where we would never have to worry about mortgages – or how to buy a loaf of bread! 

But maybe money itself is not the problem. Instead, maybe it’s how we allow it to unconsciously affect our choices and psychological states. Over the next few blinks, we’ll examine our relationship to money and how it influences our life choices. 

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