Medication Could Stop You from Wasting Money

Posted in Savings Account • March 14, 2012

financial loss

Sometimes it’s difficult to understand why some people can’t control their addiction to gambling, while others can enter a casino and not feel any temptation to spend. Researchers in Japan recently looked at these personality differences in a more intimate way — examining body chemistry — and discovered that the neurology of a person could impact their desire to take risks with their money, especially under more exciting circumstances.

As a result, the researchers are toying with the idea that medication might be able to make a difference in a person wasting or saving money.

The Pain of Financial Loss

Whether a person loses a job or suffers a divorce that results in a reduction in income, depleted funds can indeed bring about emotional pain.

A study conducted in 2007 by the Wellcome Trust Centre for Neuroimaging at University College London found that losing money is directly related to fear and pain. In fact, they found similarities between the response to financial loss and a system in the brain that predicts imminent harm and allows immediate defensive action to be taken.

Now, let’s fast forward about five years to another study examining financial loss. This study, conducted by researchers at the Kyoto University graduate school of medicine in Japan, also revealed a relationship between financial loss and pain. However, they explained that the relationship may have more to do with a chemical region of the brain that tells the body whether or not to suffer as a result of that pain.

While their study is still in its preliminary stages, the researchers revealed that a neurotransmitter called norepinephrine, or noradrenaline, is critical to the response someone has after losing money.

Related: Why Invest When You Can Just Gamble Your Money?

Individuals who have low levels of norepinephrine transporters have higher levels of the chemical in a critical part of their brain. This leads them to be less aroused by and less sensitive to the pain associated with losing money.

On the other hand, those who have higher levels of transporters and lower levels of norepinephrine have what is known as loss aversion. With loss aversion, people have a more pronounced emotional response to losses compared to gains.

So while a person without loss aversion could lose their money and move on, a person with this chemical uniqueness may feel more affected by the loss and fight harder to win. As a result, they may take more gambling risks to avoid losing again.

Gambling Addiction Treatment Through Medication

Anyone from any walk of life can have the chemical contributors the researchers mention. Professional poker players and financial market traders alike are capable of having this heightened sense of pain when it comes to financial loss.

According to the researchers, this neurological uniqueness is important to understand. However, since the feeling associated with loss aversion is so strong, it could possibly eliminate a person’s free will to make controlled decisions in high-risk financial situations.

The team of researchers at Kyoto scanned the brains of 19 healthy men with positron emission tomography (PET) scans after completing a gambling task. They noticed these differences among their subjects and even determined that there may be a way to develop gambling addiction treatment that could help individuals with loss aversion stop wasting their money through risky behaviors.

Other scientists say before medication is brought in, it’s good to study this concept even further by analyzing known pathological gamblers to determine whether they actually do have higher levels of these brain chemical transporters than non-gamblers.

Once they’re certain that a chemical imbalance is contributing to loss aversion, they can help people control their tendencies toward risky financial behaviors.

How to Save Money Without Meds

Since the researchers are still determining how brain chemistry impacts financial behaviors, it could be some time before medication is developed that can treat a person who showcases signs of loss aversion. In the meantime, it’s good for everyone to make an effort to hold on to their money, rather than waste it.

Here are some tips to help accomplish this goal:

  • Pay attention to your expenses: Analyzing your expenses is a critical aspect of proper money management. By taking a look at the amount you’re spending each month, you can decide which payments are necessary and which can be eliminated.
  • Set up a budget: It’s also important to set up a budget that accounts for where your money is going each month. By using a budget, you can delegate income to specific expenses and emergencies, even setting some of it aside for entertainment and vacations.
  • Open savings accounts with less liquidity: Another great way to save your money is to open savings accounts that offer less liquidity. For instance, a certificate of deposit (CD) allows you to save money and grow interest while giving you little access to your funds. It’s a great way to make sure you can not only save, but grow your money.
  • Hide money from yourself: If you’re still worried you’re in danger of spending too much, consider hiding it from yourself. For instance, you could buy yourself a couple of $25 gift cards to your supermarket or gas station and store them in a safe place in case you ever need them.

It would be great if medication could be handed out to help us all stop spending money recklessly and avoid losing money through excessive behaviors, but it’s good to know that there are ways to help us keep our spending on track without it.

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