Stress, the brain and all kinds of intelligence
New data from Wagestream tells us that money worries can dent a person’s intelligence by as much as 13 IQ points.
The basic idea is that when a person’s processing power is consumed by one thing too intensively for too long then the brain starts tripping in areas like memory, spatial awareness, logic, reason, interpretive skills and other facets which define one’s intellect.
For context, an IQ of 115+ is seen as ‘above average or bright’, while an IQ of 100 is slap bang in the middle of average. Hence losing 13 points is almost akin to dropping a whole IQ classification.
So sure, this nugget makes for a snappy headline — see above — but beneath any clickbaity kerfuffle, the relationship between intelligence (financial or otherwise) and stress (financial or otherwise) is really quite fascinating …
Here comes the science bit
In a stressful situation, the amygdala area of the brain fires a volley of SoS signals at the hypothalamus (the brain’s control centre) to alert it to the clear and present danger.
The hypothalamus duly kicks into gear and job one is to wrestle back control of all the frantic hormonal and nervous system activity. The goal is to bring back balance — known as homeostatis or stastis — to brain and body as soon as possible.
Although much of this stress response stuff happens in the blink of an eye, it comes at a high cost. The process of the heart rate increasing, senses sharpening, breath accelerating and adrenaline pumping zaps an awful lot of energy. This would and should be exhausting were it not for a saucy little hormone called cortisol.
Cortisol temporarily replaces lost energy, restores blood sugar, and ensures the hippocampus — the brain’s learning and memory zone — stays alert and online.
Cortisol is a wonderful natural asset. Well, to a point. It’s like an oven glove: it helps us handle a hot load until we can put it down. After that, back on the shelf she goes …
Unless the heat continues.
The vicious cycle
Humans have relied on stress to outwit and outrun wild animals since day dot. We’re designed to cope through acute stress but less so chronic stress.
When a person is in chronic stress, all that once-helpful cortisol is unable to escape and effectively turns into acid. An acid which does a real wear and tear job on the brain.
Hence a chronically stressed person may feel foggy. Or struggle to access memories. Or lose a step in social situations. All that’s bad enough, yet if the stress continues cortisol may go on to kill off cells in the prefrontal cortex — the brain zone which regulates emotions — causing it to a) shrink and b) lose function.
Interestingly, cortisol is able to burn a path from the amygdala right to the hippocampus. This is effectively the cause of what people know as the vicious cycle of stress:
Each time a stressed person’s alarm goes off the response is more immediate and more unfiltered. As cortisol wears the brain, every new stress response contains less logic and more emotion than last time. Each time this happens it lowers the bar on what it takes to set off the stress alarm again. And around and around we go …
Emotional intelligence
Stress of any kind can be open-ended and hard-wearing but it’s 2023 and who doesn’t have chronic woes around money?
A glance at this year’s figures and nearly half the UK population has less than £100 in savings in a climate of big bills, low morale and a cost-of-living squeeze.
What’s the solution to all this stress? Well, on its face it’s as simple as don’t stress, but that’s a facile and pointless answer. If we could we would. Next please.
There are anti-stress fundamentals (eat better, sleep better, hydrate, talk about it, exercise) but beyond that it’s hard to know where to start and what to do.
One interesting wrinkle, though, is the role of emotional intelligence in all this. In a study out of India, and published on the US National Library of Medicine, neuroscientists found (and not for the first time) that people high in emotional intelligence are best able to resist stress – both the acute and chronic varieties.
Okay, cool. Emotional intelligence. How do I get me more of that?
Enter financial intelligence
Emotional intelligence itself isn’t in Money Means’ wheelhouse, but it has been said that financial intelligence is a facet of it. If that’s true (and we think it is) then part of the solution is truth, action and consistency around money.
Financial intelligence isn’t about getting rich, it’s learning what to do and, just as key, what not to do. Financial intelligence is learning to cope with and control your money; taking considered, measured, rational actions without too much emotion in the way.
The good news is that financial intelligence can be very practical to build up. A starting point is to find, state and face the facts of your situation so you can at least separate the things you can change from those you can’t.
While stress is caused by many things (circumstances, nature, nurture) it often stems from a lack of knowledge and / or a lack of control and / or the inability to see a solution.
So there is comfort, and growth, when we learn to focus on the things we can control. It’s the opposite of literally wasting brain space on things we’ve no power over.
Like building a muscle, developing financial intelligence is tough at first but soon comes strength and resilience. Yes, stress will return but if you’ve armour then it doesn’t go chronic. Money stress doesn’t have to cost you more brain.