People hear the word inflation and their shoulders drop – no one celebrates when their economy is suffering from inflation. It is a word thrown around quite often in the media as well as our daily conversation sometimes. We know it hurts our wallets and can also influence our mental state; however, that is the extend of what people. Maybe it is a reflection of the lack of financial education that is offered to the public or rather just the fear that is ingrained in people towards finances. Regardless of the reason, it does not stop inflation from affecting our relationship with money, others, and ourselves. But it is definitely possible to maintain a strong and sustainable relationship with all the key factors in having a healthy lifestyle all around – we’re talking mentally, physically, financially, psychologically, etc. Let’s get right into it.
The international monetary fund defined inflation as something that “measures how much more expensive a set of goods and services has become over a certain period, usually a year”.1 In other words, inflation shows how much the prices have increased compared to the previous year. Compared to last year, the U.S. Labor Department published data marking an 8.3% increase since last October.2 But it’s not just in the States, inflation is seen worldwide in 2022.3 Given this information, it is obvious that most, if not all, of us have to deal with the hurdle of inflation. The difficulty surrounding this whole topic is that despite the increase in prices for basic goods, one’s earning rarely increases. John M. Bremen in an article by WTW explain this is because of several reasons. One of them being how wages are sticky.4 This implies the difficulty in increasing and decreasing wages despite societal changes and therefore the lack of changes when it comes to inflation. The mismatch between workload / income and good prices can foster a toxic and unhealthy relationship with money, potentially leading to behaviors such as hoarding.
On the other hand, mismanaging of finances and emotions especially during a financially tight time can affect the relationship with the loved ones such as family members, and partners. The financial underlying reason can vary from case to case, a common one stems from the inability to acknowledge and respect each other’s emotions associated with money. Some may claim that finances and emotions should be completely separated and should not interact. Not only is it ignorant to the nature of humanity, it is rather impossible. Feeling a certain type of emotion is inevitable, especially in times of stress. The problem does not lie in the mere fact that we feel those things, but rather the way people go about it.
This is easily applied to one’s relationship with oneself as well. Unlike relationships with others, a relationship with yourself is a unique one where it acts as a foundation for many other relationships. The distinctive understanding and realisation about ourselves stem from this unique relationship and it is crucial to not let money be in the middle of that. Many struggle with detaching self-worth from money as the social hierarchy is comprised of systems where money plays a large role in. The mismatch between earning and what one can afford can lead to chronic stress and anxiety, on top of other physiological symptoms.
When people say not to stress about money but there’s so much to stress about, what is there to do? Although there isn’t one magical solution to have stress disappear, managing one’s emotions can promote financial behavior that is aligned with your values and beliefs. By doing so, it creates a neutral outlook on money while negating the hostility that it potentially can bring.
- Fernando, J. (2022, October 21). Inflation: What it is, how it can be controlled, and extreme examples. Investopedia. Retrieved October 25, 2022, from https://www.investopedia.com/terms/i/inflation.asp
- Current US inflation rates: 2000-2022: US inflation calculator. US Inflation Calculator |. (2022, October 13). Retrieved October 25, 2022, from https://www.usinflationcalculator.com/inflation/current-inflation-rates/#:~:text=The%20annual%20inflation%20rate%20for,at%208%3A30%20a.m.%20ET.
- Buchholz, K., & Richter, F. (2022, October 20). Infographic: The global inflation outlook. Statista Infographics. Retrieved October 25, 2022, from https://www.statista.com/chart/27480/projected-annual-inflation-by-country/
- Bremen, J. M. (2022, April 12). Why salary increases do not keep pace with inflation. Willis Towers Watson. Retrieved October 25, 2022, from https://www.wtwco.com/en-CA/Insights/2022/04/why-salary-increases-do-not-keep-pace-with-inflation#:~:text=Wages%20are%20sticky,before%20determining%20long%2Dterm%20implications.