From an early age, we’re taught to understand the value and role money plays.

Your tooth falls out and you get a shiny 20p left under your pillow as a reward. Perhaps you wash your parent’s car in exchange for a couple of quid (which you realise in retrospect, was well below the minimum wage).

And as adults, we’re given the impression that buying a marginally lighter laptop or a spongier pair of running shoes will transform our mood.

So, what effect does money and what it represents really have on us psychologically and can it actually make us happy?

Money and biological reactions

A study of 3-6 years olds showed that even handling money influences our behaviour.

When exposed to money, the children were less inclined to be helpful or generous.

On the flip side, they were more likely to persevere and apply more effort to the difficult tasks they were assigned. 

Karen Kwong, Organisational Psychologist and Executive Coach at RenOC explains: “When we spend, get a windfall or a pay rise, for example, the body releases oxytocin – the hormone that’s associated with feelings of wellbeing, confidence and happiness.”

This might go some way to explain the pay-day high that seems to sweep through the office at the end of the month.

“To add to that rush, dopamine can also be released when we receive something such as a bonus,” adds Kwong.

And the chemical reactions don’t stop there; the psychical act of parting with money for something you’ve had your eyes on for a while, also plays havoc on our psyche.

“The rush we feel when we buy something is down to dopamine. It helps us feel euphoric, like we’ve achieved something – much like a reward.

“It could be a pay-rise – or in my case, buying myself a wonderful pair of Blahniks,” says Kwong.

Similarly, when we’re experiencing concerns around our finances, our body subconsciously (and consciously) reacts, going into fight or flight mode as a coping mechanism to deal with the perceived stressor.

“Your body will physiologically react the same way whether you are confronted with a scary film, a pressing deadline or money problems.”

“Stress hormones will be released, your heart rate will quickly rise, adrenaline and cortisol levels will become elevated, your blood pressure may go up and your breath will speed up.

“We know that in short spurts, high stress hormones can be really helpful, for example, for meeting that deadline (or making it to the end of that film).

“However, money worries don’t tend to rectify themselves overnight. They can last weeks if not months, and this is where chronic stress can come in.”

While the effect that money has on us might, to a degree, be out of our control, is the personal relationship we have with it easier to navigate?

Not necessarily. 

Much like relationships, eating and other fundamental behaviours, the environment we are surrounded by – and the attitude that our parents and caregivers have towards money when we are children – shapes how we see money as adults.

That sponge-like mentality also comes into play with how the world of money is portrayed - a male-dominated environment perpetuated by many financial institutions. Everything from not seeing people like us in banking adverts to the unconscious bias about our spending power has an impact about how we feel about money.

What’s more, how we spend is a culmination of what we’ve been exposed to during our developing years and a manifestation of other underlying issues.

“Much of our approach to money is deeply personal and down to observing how others managed their own finances; the arguments between parents over bills, the feeling of lacking in the playground because you didn’t get to go on a school trip, and so on.

“Even as adults, these experiences can often trigger upsetting and negative memories associated with money,” says Kwong.

Our primal instincts also have a vital role to play here.

“Humans are always alert to potential stressors. It is the way we’re built.

“So when we spend money, especially on perceived frivolous things with no clear tangible benefit, it’s quite likely the brain thinks: ‘I feel less safe now because I have spent a precious resource on something other than a thing that’s going to keep me safe/give me a bed for the night/feed me…’”

But while we seem to always be chasing more money to avoid those thoughts, do we all share the same motivations around money and can it ever lead to happiness?

Researchers at Princeton University investigated the correlation between salary and happiness and concluded that the sweet spot where most people consider themselves ‘happy’ was in the earning bracket of around $60-$75,000 (that’s about £46,000-£48,000).

“Having lots of money is merely a means to an end,” says Kwong. “The question to ask is ‘why is having so much money so important to you’?

Money dials and our motivation for spending

We all have different motivations for spending, according to author of I Will Teach You To Be Rich author Ramit Sethi.

The various reasons or triggers are known as ‘money dials’ and Sethi identifies ten of them in total, including fitness, travel and convenience.

Put simply, a money dial is the aspect of our life that we love to willingly throw money at – the tangible area of life that we feel we get the most happiness from when we ‘invest’ in it.

Sethi encourages us to look at the one money dial we identify with the most – perhaps it’s fitness and the restorative but somewhat luxurious yoga retreat you can’t miss each year, maybe it’s paying extra to fly premium whenever you travel because it gives you a huge buzz, or is it spending a large proportion on the convenience of take-aways or Ubers when you could easily cook or hop on the bus?

Once we identify our primary money dial, we can look at the sort of spending we do that truly evokes joy (for example, saving up for a five-star city break) and direct our frivolous spending away from other more superfluous dials (or at least the ones that mean the least to you). 

Mastering the art of delayed gratification

So, once we have looked at the sort of things we’re spending our hard-earned money on, the way we’re spending is also telling.

If you’re someone who likes to be a little more frivolous with your money (maybe you get half way to payday and you start having to go easy on the impromptu after-work drinks or the Asos add to basket), then it might be time to practice the art of delayed gratification.

Famously, the social experiment The Marshmallow Test sums this up quite nicely. Essentially, the study observed children between the age of 3 and 5 and measured whether they were more inclined to wait 15 minutes for a bigger reward or if they gave in sooner in exchange for getting the marshmallow instantly.

The experiment followed up with the children to see if their choice of delayed gratification impacted them later in life. The kids who held out for the bigger reward were shown to have higher test scores at school, lower rates of obesity and fewer instances of substance abuse.

While the test has been replicated since the original and shows that our social environment and experiences are key to our successes in adolescence and adult life (ie it’s not solely dependent on our will power), the theory can be applied to spending.

Are we able to delay the reward in exchange for a bigger ‘pay off’ – be that an investment, a more expensive car, or perhaps our dream home if it means having to hold out that little longer and say no to the smaller but more achievable and instant purchases?

It is possible to train our brains to become better at the art of delayed gratification, but it may take practice. 

Making sure your goals are realistic

We all have dreams of saving a deposit for a house in a couple of years if we just stop, well, everything. But instead of saving, looking at things like investments and their returns can give you and your money moves a better sense of purpose - and is also practicing delayed gratification.

However, baby steps are key it seems.

“Make sure your goals are realistic and not too ambitious. The steps that you take shouldn’t be overwhelming, otherwise you will procrastinate or avoid doing anything at all.”

Products like NatWest Invest are digitally manageable and have funds you can start investing in from £50 a month.

And finally, talking about money (as with most things) and the impact it has on you or others can make you feel emotionally stronger to deal with them.

This is why Stylist has teamed up with NatWest to launch A Woman’s Worth Collective, a space for all women to join and talk openly about money and learn from others how to have a healthier relationship with their finances, from worries to exploring how to grow your pot.

NatWest is the bank that believes ‘we are what we do’. Whatever your financial needs, they’ll do all they can to help keep your relationship with money healthy.