If we want to make smarter decisions about money, the first thing we need to do is understand what drives us to earn it in the first place. "Our relationship with money isn't set in stone. We can change our attitudes and habits so we're ultimately happier. It starts by understanding what motivates us to earn money. Some motivations aren't healthy, while others are," says Jacques Forest, a psychologist and a professor-researcher at UQAM's school of management sciences in Montreal
From anxiety to security
According to a survey on saving, 40% of Quebecers under 35 have a negative feeling when they look at their bank account. They feel anxious, insecure, sad or depressed when they think about their financial situation. But those feelings become more positive with time. Half of people 55 and older said they feel secure and at ease when they see their bank statements.
Source: Les Québécois et l’épargne, Fonds de solidarité FTQ, 2018 (in French)
According to Forest, some of our motivations to earn money are healthy because they improve our mental well-being. We're talking about doing charity, supporting equality (or justice) and liberty, enjoying entertainment, or taking pride in doing something well. On the negative side, it's spending impulsively, chasing social status or coping with personal insecurities (like trying to buy friends or love through gifts). These types of motivations are a source of frustration and negatively affect our mental well-being. The researcher also identified security, support for the family and financial stability as other neutral motivations.
The satiation point
As the saying goes, "Money can't buy happiness." That's true—up to a point. "According to data from Gallup, an international polling organization, the cap for our emotional wellbeing, meaning the point at which money stops making us feel better about our lives, is somewhere between $90,000 and $115,000 in North America. Below or above that, money is more of a stressor, either because we don't have enough for basic needs, or because we need to work harder to make more."
- Jacques Forest, psychologist and professor-researcher, UQAM school of management sciences
But there's a way to avoid the negative motivating factors. "The first step is to understand what's motivating us to earn money. Once you know that, you can replace the negative motivations with more positive ones," says Forest. A study he co-authored in 2020 provides some evidence. The authors asked participants to complete a questionnaire about what motivated them to earn money. "The study showed that some motivations have us chasing negative behaviours, and others, beneficial behaviours. The negative motivators are actually barriers to independence, skill acquisition and social connection. So when we have a healthy relationship to money, we end up having more positive outcomes in those 3 areas," says the professor.