Fundamentals of the psychology of money

7 min read
Fundamentals of the psychology of money
Fundamentals of the psychology of money

If you’ve read a lot about money, you’ve come across two categories of literature.

The first is about how to save money: save up first and then invest in various financial instruments such as stocks, bonds, real estate, hybrid funds, etc. This literature also explains what to do with your debts and credits. In this regard, you have probably heard the advice that you need to get out of high-interest consumer debt first or consolidate it into lower-interest debt.

The second category is about the psychological and esoteric components of money. You may have read in such literature that you need to visualize your wealth and keep your money in different places to feel its presence. Or you may have read that you are limited by beliefs such as “money does not grow on trees” or “for a woman, the greatest success is to marry.” The second category does not account for the reader’s education, age, or background. Overall, popular esoteric or psychological literature is far from applicable to real life.

The metacognitive programming (MCP) approach is different. We speak a language that is understandable to people of all levels of training and does not cause anyone’s rejection. Let’s get back to money now.

???? The ability to make money stands on two pillars, one of which is the so-called winning strategy.

The winning strategy is sometimes referred to as the survival strategy. From an evolutionary standpoint, it has helped your genes to survive and is also helping your survival today. Essentially, this strategy describes the typical brain response to stress and discomfort.

What does the winning strategy look like?

You’ve probably heard (many times) that you’re not getting what you want because of your limiting beliefs. But few people understand how the limiting mechanism works and how to change their beliefs intentionally.

Limiting attitudes look like ordinary sentences we agree with and often repeat in our heads. For example, if the thought “My work doesn’t worth much money” persistently occupies your mind, and you agree with it, it is a limiting belief.

???? In metacognitive programming, we use the STEAM model.

STEAM explains the connection between thoughts and what happens in the world.

Here is what this abbreviation stands for:

S – situation;

T – thought;

E – emotion;

A – action;

M – meta.

The situations in our lives are neutral. Like facts. Neither good nor bad per se. Our thoughts serve as a buffer between these facts and our consciousness. Our thoughts describe the surrounding reality for our consciousness. We never actually see reality itself, but only our thoughts about it. Thus, everything we see is only a thought.

Thoughts are always negatively or positively charged and evoke emotions within us. Emotions lead to actions, and actions improve or worsen the current situation.

Everything you feel results from how you think. No exceptions. You always feel what you think. Your body always experiences the meaning created in the head. It is simply how the connection between the head and the body works.

For example, imagine that you are negotiating with a potential client, and the client asks about the price. You tell your price, and the client raises an eyebrow in response.

That is a situation.

The thought flashes through your mind:

The client thinks I am not worth the money I voiced.

That is the thought. You feel yourself shrinking in fear, doubting your abilities, and feeling like a fraud. It is called impostor syndrome. In response to the fear, you lower the price. That is your action. Finally, the result is that you are underpaid for your work. That is a new situation. We arrived at this result only because you assigned a negative thought to a neutral situation.

That is how limiting beliefs work. Everything starts with a thought. The thought leads to an emotion, which further causes an action. Eventually, the action worsens the situation or, at best, does not improve it.

To free yourself from limiting attitudes, you must first notice them. Noticing your thoughts is not just hearing how they sound but building a STEAM. Building STEAM means understanding what the trigger (that is, the situation) looks like and noticing the thoughts that arise in your head. But it also involves noticing the emotions that your thoughts cause, actions caused by emotions, and the result caused by actions.

Now let’s talk about a winning strategy

Low self-esteem, confusion, fear, fluctuating energy and emotional swings imply a vacuum inside a person. One wants to draw external proof of one’s own worth into oneself. In other words, one needs external achievements to validate one’s internal content and convince others of one’s worth. The lack of achievements feels like emptiness. But it is no good to depend on the external. It is as if you depend on a structure of sand. Whenever the rain starts, the sand structure will betray you.

Now let’s return to the expert from the earlier example (the one who ended up underpaid after she felt fear and reduced the price of her work).

Every time we experience a strong emotion, our body generates energy. If the emotion is uncomfortable, most people will respond to it in one of the ways we call behavioral strategies. These strategies ensure victory in the survival game. But they are also the cause of the lack of prosperity.

There are three main survival strategies in psychology. However, we will spend most of our time discussing the first one because it occurs most often.

Three Types of Survival Strategies


We avoid when we don’t want to feel the emotion and live through it to the end.

An avoidance strategy is a response to fear, anxiety, disgust, discomfort, panic, confusion, doubt, etc. In many books, I have come across the idea that the avoidance strategy is used by people who are neurotic and above average in accommodation. If you don’t understand what I’m talking about, you can take a free test for determining personality traits called Five voices.

If you often experience these emotions, you might also attempt to avoid them often. Your choice would often be leaving, not experiencing.

A popular way to escape negative feelings is by masking them with other, usually positive feelings. For example, you are stressed, so you eat more. You’re bored, so you look at your phone. You feel bad, so you drink. You can’t stand the stress or boredom, so you watch porn and masturbate, smoke, or spend hours on YouTube.

Sometimes people try to stop positive feelings to avoid “reckoning” or falling deeper into negative feelings. They think it is better not to fly too high, as the fall will be more painful. Better not to take off in the first place. For example, many people crave love but hinder their relationships as they want to avoid future pain through the current pain.

Sometimes we tend to avoid certain feelings through compensation. If you often spend money on what you don’t need, you might be compensating for something. Usually, you are trying to quiet the bad feelings. You give money to get attention, gratitude, pleasure, acceptance, or to forget what is bothering you.

Let’s say you pay the bill for everyone in a restaurant. You might want to feel better or look better in the eyes of others, and that’s why you do it. Or you buy a gift that is not proportionate to the specific context. You are compensating again.

But compensation is not limited to money.

If you compensate, you compensate everywhere. You overeat, drink much, or binge-watch TV shows. You exaggerate with social media, porn or sex, or drugs.

Perhaps you also use the money to please others and gain respect, admiration, and acceptance.

The worse you feel, the greater your desire to compensate. But the better you compensate, the worse it gets. You need further compensation to feel better, but after experiencing a moment of pleasure, you feel bad again. It is a vicious circle, and you can get out of it only through a deep understanding of what is happening and a desire to live differently.

Another example of avoidance is procrastination. Instead of tackling the problem of money head-on (for example, by auditing our accounts, discussing the situation with loved ones, looking for solutions, and increasing income), we avoid and procrastinate.

If you don’t have money today, it is because, at some point, you believed you couldn’t get through what it took. And you only needed to go through your feelings. You just gave up, and now you’re avoiding facing it. The saddest thing is that you avoid living.

Grab a pen and paper and write down what else you avoid.

Maybe you don’t want to work out because you can’t experience the initial discomfort. Maybe you finally want to make things right, but you don’t want to go through what it takes.

We avoid and want everything to be decided for us. We don’t want to figure out how to manage money, make more money, solve economic problems, start a business, and speak in front of an audience. We prefer to have others do it for us. And in their stupidity, they agree, deciding to live our life for us.


There must be enough anger to choose this strategy. If angry enough, you want to dominate, subjugate, and scare. From the five-factor model of personality, dominance is often observed in people with low accommodation and above-average diligence. In addition, it is common in men and less common in women.

Those who crave dominance also tend to crave status and power (i.e., being high in the hierarchy). In the modern world, it is becoming more and more difficult to subdue people by force. People do not want to be around alpha males or females who pressure or threaten them. It’s a common vision and inspiring philosophy that unites us. The worst way to motivate others is to scare them or give them money. Both work only in the short run.

Thus, those who desire domination usually get isolated instead. And in isolation, all the emotions they’ve tried to escape from eventually catch them.


One of the main theories in evolutionary psychology is that we please in order to be accepted by the group. In the past, you had no chance of survival if you were not part of a group.

The “pleasing strategy” refers to fulfilling all the requirements and not wanting to contradict the authorities. Since you serve a group of people, you are always needed.

To understand this strategy better, think of mothers who are going through a crisis because their children have grown up, so they (mothers) cannot adapt to a new reality in which their services are no longer valued.

Now that you know a bit more about life strategies, you might be able to assess your own strategies and their impact on your money-making ability and life in general. Your survival strategy has helped you get to this moment. But if you are not satisfied with the present moment, it may be time to think about changing your strategies.

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