Money-related stress is one of the most pervasive challenges facing individuals in first-world countries today. This phenomenon is deeply intertwined with mental health, psychosocial dynamics, and cultural factors. Understanding these links requires a multidisciplinary perspective, integrating psychoanalysis, sociology, evolutionary psychology, and cultural anthropology.
The Hedonic Treadmill and Financial Stress
The hedonic treadmill is a psychological concept that explains why happiness derived from external circumstances – such as financial gains – is often fleeting. The concept, rooted in research by Brickman, Coates, and Janoff-Bulman (1978), shows that people tend to return to baseline happiness after significant events, whether winning the lottery or facing adversity. Yet, the transient joy from financial improvements perpetuates cycles of consumption and dissatisfaction, often leading to financial stress.
- Materialism vs. Experiences: Research suggests that material possessions provide short-lived satisfaction, while experiences that foster social connections lead to longer-term happiness (Van Boven & Gilovich, 2003). Despite this, marketing strategies often leverage upon the phenomenon of hedonic treadmill by creating cycles of desire through novelty, upgrades or aspirational branding and lifestyle, knowing that the satisfaction from products is fleeting.
Financial Challenges Across Demographics
- Generational Differences: Millennials and Gen Z face higher financial pressures due to stagnant wages, housing crises, and significant student debt. In the U.S., Gen Z adults report the highest levels of financial stress, averaging 6.1 out of 10 (APA, 2023).
- Gender Disparities: Women are disproportionately affected, owing to wage gaps, caregiving burdens, and longer life expectancies requiring extended retirement planning (PwC, 2022).
The Psychoanalytic Perspective
Psychoanalytically, money often carries deep symbolic meaning, representing security, power, and self-worth. For individuals grappling with financial instability, spending may serve as an unconscious repetition compulsion - recreating unresolved experiences of financial insecurity from their developmental years. This behaviour can also act as a manic defence against internal conflicts, fear of poverty, or an attempt to deny vulnerability by indulging in excessive consumption.
Furthermore, spending may fulfill a more or less conscious desire to signal belonging to a higher social class, addressing the fear of exclusion from groups perceived as relevant or elite. This aligns with the psychoanalytic view of material goods as signifiers of success, power, and identity. Individuals may spend to mask feelings of inadequacy, manage impressions, influence others’ perceptions, and restore fragile self-esteem. At times, it is a bid to assert control in areas where they feel powerless.
However, such mechanisms often perpetuate a self-defeating cycle, leading to greater financial difficulties and intensifying stress. This dynamic reflects the interplay of unconscious drives and societal pressures, highlighting the need for a deeper understanding of financial behaviours within the context of both individual psychology and broader social influences.
Sociocultural and Anthropological Factors
- Fear of Exclusion: Evolutionary psychology emphasises humans’ innate fear of exclusion from relevant social groups, as social connections have historically been crucial for survival and success (Tomasello, 2014). Financial instability often triggers anxiety about being excluded from elite circles or societal relevance, especially in modern contexts where wealth is a visible marker of status and belonging (Veblen, 1899). This fear is deeply rooted in our evolutionary need to maintain group membership for access to resources and protection.
- Conspicuous Consumption: Veblen’s concept of “conspicuous consumption” explains the cultural tendency to display wealth through branded goods, creating status symbols that mitigate fears of exclusion while fuelling financial strain (Veblen, 1899). Such consumption behaviors align with the evolutionary drive to signal social standing and genetic fitness, often through the display of expensive goods that signify both access to resources and potential desirability as a mate (Buss, 1989).
- Cultural Variability: Cross-cultural studies reveal that societal norms influence perceptions of wealth, happiness, and consumption. In individualistic cultures, personal success is frequently correlated with financial affluence, amplifying stress when expectations are unmet (Fujita & Diener, 2005). This cultural pressure can exacerbate feelings of inadequacy and drive individuals to engage in consumption behaviors as a way to signal success, often leading to cycles of debt or financial instability.
Marketing and the Hedonic Treadmill
Understanding the hedonic treadmill underscores the importance of pursuing?intrinsic goals, gratitude practices, and meaningful relationships rather than external rewards for lasting happiness.
Marketers leverage the?hedonic treadmill?to keep consumers in a cycle of seeking temporary satisfaction through purchases, experiences, or upgrades. By understanding the tendency of individuals to adapt quickly to new gains, marketers create strategies that exploit this psychological pattern. Here’s how:
- How it works: Companies intentionally design products with limited lifespans or frequent upgrades (e.g., smartphones or fashion trends).
- Psychological tie-in: Once consumers adapt to their current purchase, marketers entice them to believe newer versions will restore excitement or status.
2. Highlighting Novelty and Innovation
- How it works: Advertisements emphasize new features, updated designs, or revolutionary benefits to trigger excitement.
- Psychological tie-in: Novelty creates a temporary dopamine spike, which marketers know will wear off, prompting repeat purchases. For example, tech companies often market incremental improvements as game-changing innovations.
3. FOMO (Fear of Missing Out)?
- How it works: Limited-time offers, exclusive drops, or seasonal collections capitalize on urgency and scarcity.
- Psychological tie-in: Consumers, aware they’ll adapt to their current possessions, are compelled to chase fleeting opportunities to feel “in the loop.”
- How it works: Marketers promote experiences over products (e.g., “luxury travel” or “festival culture”).
- Psychological tie-in: Since experiences create more lasting satisfaction than material goods, brands leverage this by packaging their offerings as unique, life-enhancing moments, keeping consumers chasing “the next great experience.”
- How it works: Services like streaming platforms or subscription boxes are designed to perpetuate consumption without significant novelty.
- Psychological tie-in: By providing small, consistent doses of satisfaction, marketers keep consumers locked into an endless cycle of paying for incremental enjoyment.
6. Aspirational Marketing
- How it works: Brands associate their products with ideal lifestyles (luxury, success, happiness) that consumers believe will elevate their happiness baseline.
- Psychological tie-in: When these purchases inevitably fail to provide lasting happiness, consumers are more likely to buy again in pursuit of the marketed ideal.
7. Social Proof and Comparison
- How it works: Marketers showcase influencers, testimonials, or user-generated content to spark a sense of inadequacy or envy.
- Psychological tie-in: Social comparison fuels the desire to achieve the perceived happiness or status of others, perpetuating consumption.?
- How it works: Points systems and member perks incentivize continued spending for future rewards.
- Psychological tie-in: Consumers derive short-term satisfaction from incremental rewards, keeping them in a loop of consumption without reflecting on their overall spending habits.
Addressing financial stress requires interventions on multiple levels:
- Mental Health: Therapists can help clients develop awareness, resilience, develop budgeting skills and realistic financial planning while addressing insecurities, fears and maladaptive defences therapeutically.
- Public Policy: Governments could prioritise financial literacy programs and equitable economic policies to alleviate systemic financial stress.
- Cultural Shifts: Encouraging intrinsic goals – like relationships and personal growth – over material achievements can reduce the psychological burden of financial stress.
The intricate relationship between mental health and financial challenges underscores the need for a comprehensive approach to wellbeing. Awareness of the hedonic treadmill and its exploitation in marketing can empower individuals to make mindful financial decisions. By fostering resilience, promoting equity, and reframing societal norms, we can mitigate the pervasive stress tied to money and its psychological consequences.
- American Psychological Association (APA) (2023). Stress in America: Key findings about financial stress. Available at: https://www.apa.org
- Brickman, P., Coates, D., & Janoff-Bulman, R. (1978). Lottery winners and accident victims: Is happiness relative? Journal of Personality and Social Psychology, 36(8), 917–927.
- Buss, D. M. (1989). Sex Differences in Human Mate Preferences: Evolutionary Explanations. Psychological Bulletin.
- Fujita, F., & Diener, E. (2005). Life satisfaction set point: Stability and change. Journal of Personality and Social Psychology, 88(1), 158–164.
- PwC (2022). Women’s Financial Wellness Survey. Available at: https://www.pwc.com
- Tomasello, M. (2014). A Natural History of Human Morality. Harvard University Press.
- Veblen, T. (1899). The Theory of the Leisure Class: An Economic Study in the Evolution of Institutions. Macmillan.
Such an important topic!