There is an old saying: “Money is addicting to make, and even more addicting to spend”.

There has been very little formal research on why this is the case. In studies that simulated the experience of buying something you like, dopamine levels are known to increase within the prefrontal cortex and a part of the brain called the insula. Why is this relevant? Let us take a look at why dopamine exists.


On A Chemical Level, Spending Is Addictive

When we breathe, sleep, eat, and engage in the act of reproduction, dopamine levels increase to a lesser or greater extent. There is very little we understand about what dopamine is there for, but if you look at the facts it becomes rather clear that this very important neurotransmitter is most active during the survival response we all possess inside of us on a primordial level.


In other words, dopamine is suspected to be responsible for survival. It is also the same neurotransmitter found in excess amounts in individuals with Schizophrenia or Neurosis, causing everything from mania to elation, and is connected to a part of the brain known as the “pleasure pathway.” This is because dopamine, if increased using a synthetic drug (cocaine, as an example, is addictive because it increases dopamine levels by up to 36 percent), can trick the mind into feeling “good” – just like spending.


Money & Survival

Why is it important to understand dopamine when discussing the psychology of money? Let us examine a psychological concept called behavioral reinforcement. The human brain is completely programmable and is hardwired to release dopamine (thus causing a feeling of pleasure) when something found useful for survival occurs.


Now, think about this: as a nation we are asked to pay for food, water, shelter, clothing, and even safety. Due to this, it can be insinuated that functions for survival are not free; they cost money. The brain can become reinforced to associate money with survival, as without it, we are unable to meet our most primordial requirements. Spending is an example of behavioral reinforcement: we begin to learn that in order to survive, one must have a means to pay for it!


There is evidence that a part of the brain called the insula is more active in individuals who save their money rather than spend it. Those with lower insula levels are known as “spenders” whereas higher insula-minded individuals are “savers”. Though we need to be able to afford mechanisms for survival, after so much time living with this mentality we begin to assess money with the pleasure principle (funded solely by dopamine and noradrenaline).


How You Can Stop Spending!

If you want to stop spending so much or begin to save money, knowledge is the first step. Understanding that money triggers a surplus of dopamine in the insula and prefrontal cortex is why it feels so good to buy something. Though more often than not, when you buy something you may not truly require, that “buyer’s high” dissipates after as little as a few hours! This leads to regret later on (though note that you will never feel regret for spending money on food, because it truly is for survival purposes).


The best tip is to always think to yourself: “Do I really need this right now, or can I wait?” Everyone has, at some point, been walking through a shopping mall with the intention of buying one item, only to leave with ten items purchased on impulse. If you can understand that every time you spend it is simply a behavioral response/association that feeds “good feelings” when spending, you can begin to control your impulses!


In Conclusion

Money is associated rather falsely with survival, and it goes to show how easy the human brain is to hardwire. Everything we do and feel is chemical, and because our body uses pleasure principles to reward us for survival-related acts (eating, sleeping, reproducing…), we slowly but surely become conditioned – from a very young age – to feel pleasure when money is made, or spent. If you want to learn more, or want to learn how to control your spending, contact me for assistance.

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