How Can Financial Problems Damage Your Thinking?

Posted on Oct 8 2013 - 12:02am by John Murphy

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Yes, sometimes having a big brain can get you into trouble. And we all know that stress and worry leads to headaches and other problems. What you might not realize is how much physical damage you can do to your brain if you’re constantly worried about financial problems. According to a recent report published in August in the journal Science, worry about money can take away as many as 13 IQ points.

Being Poor vs. Moments of Poverty

One interesting take away from the research was that people with smaller incomes were able to perform just as well as high-income people – when they weren’t stressing about finances in one way or another. So, instead of saying poor people make bad decisions all the time, it’s better to say that when people experience moments of poverty they’re not thinking as good as they could be.

The study was put together by Jiaying Zhao and  Sendhil Mullainathan from Harvard University and Eldar Shafir from Princeton University. The research was gathered from both poor, rural farmers in India as well as mall shoppers in New Jersey. The studies were conducted both in the lab and out in the field to try to give a more accurate look at the problem of financial stress in the modern world.

When stressing about money makes you think less clearly on big picture issues, you’re more likely to create more financial problems. This can quickly become a very vicious cycle that’s hard to escape. This could be one of the reasons the divide between the rich and poor has increased over the last few hundred years. When people start going down the black hole of financial problems, it can be difficult to escape.

Ways to Help

Here are a few ways you can reduce stress about financial situations so they don’t negatively affect you.

  • Create a Budget – One of the first things you should do is come up with a financial budget for your household and stick to it. This is one of the reasons a lot of people get into financial problems in the first place – poor planning with the money they do have coming in.
  • Let it Go – Being able to stop thinking about your financial situation is hard, but you need to do this in order to be able to keep performing at your best. Instead of stressing, work on reaching your goals and sticking to your budget.

If you know where to find mortgage brokers near Virginia Beach, you’re not going to have to worry about stressing as much. This, in turn, can help you make a smarter decision. Learning not to worry about money matters isn’t the easiest thing in the world to do, but if you get professional assistance, you’re going to have an easier time of it. What do you think? Leave a comment below and let us know.

Photo Credit: Flickr/JD Hancock

About the Author
John Murphy

John is a blogger who loves to write about new and different topics. He is always willing to write a new guest post and nothing can stop him from providing new ideas to spread knowledge.