Financial stress affects nearly everyone at some point, but what if the father of psychoanalysis could help ease your money worries? Sigmund Freud’s revolutionary theories about the human mind offer surprising insights into our financial behaviors.
In honor of Freud’s birthday, let’s explore how his psychological concepts can translate into practical strategies for managing your money more effectively and with less anxiety.
These techniques won’t just help you understand your financial habits better — they’ll give you actionable ways to transform them.
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1. Reality principle over pleasure principle
According to Freud, mature adults learn to delay gratification (the reality principle) rather than chase instant pleasure. Buying now often conflicts with securing your financial future.
Try “emotional bookmarking”: wait 24–48 hours before any non-essential purchase over a set amount. This pause gives the reality principle time to kick in.
Also, automate savings and investments so they occur before you can spend. This puts long-term goals ahead of short-term urges.
A smart way to apply the reality principle: use a high-yield account for emergency savings that grow while staying accessible.
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2. Defense mechanisms in financial behavior
