Impending Storm: Original photo

We know that the more emotionally miserable we feel, the more prone we are to give in to life’s temptations, such as impulse purchases and spending sprees (and chocolate cake!).  When depression, anxiety, and stress combine, they create the perfect storm that renders us defenseless against bad financial habits.

Let’s take a look at why this occurs.

(1)    Depression.  When we feel depressed, discouraged, defeated, or downright disappointed, these feelings slow us down and diminishing our supply of energy, focus, and motivation.  Of course, if we don’t have sufficient energy, focus, and motivation, it is challenging to remain active in pursuing the healthy financial goals we know we should pursue.

(2)    Anxiety.  When we become anxious, our body enters the “fight-or flight” mode, which is a set of physiological changes designed to prepare us to either fight or to run away from a threatening situation.  One of the many changes that occurs during this response is the release of stress hormones into the bloodstream.  Scientific research has shown that these stress hormones actually increase the excitability of our dopamine neurons, which are the neurons that are highly responsive to reward and to the lure of immediate gratification.  Therefore, the more anxious we are, the more tempting temptations become!

(3)    Overall stress.  When we are stressed, we are often experiencing a complex mixture of emotions from frustration and anger to sadness and anxiety.  Research has shown that this mixture of emotions tends to shift the brain into a reward-seeking state.  In other words, the brain starts looking for strategies that seem to promise reward (and therefore release dopamine), such as shopping, spending, and gambling.  Unfortunately, many of these strategies are not all that effective in relieving stress and lead to negative long-term consequences.

What should we do about the emotions that threaten to ruin the pursuit of our carefully-constructed financial goals?  Stay tuned for a list of coping strategies next week!

In the meantime, which emotions do you find most disruptive to your financial goals?