A "frictionless" cash system is creating the perfect shitstorm for people with money trouble. It's making people ill—and it's making ill people poorer.
Illustration by Marta Parszeniew
This post originally appeared on VICE UK.
It's never been easier to spend money. You may never touch hard cash before your wages are swiped away on a credit card, spent in one click on Amazon, or siphoned out of your account on a late-night Uber.
One by one, the steps in between you and debt are being eroded by the creation of a "frictionless" cash system. It's a perfect shitstorm for people with money trouble and people who are rapidly becoming acquainted with money trouble. It's making people ill—and it's making ill people poorer.
We already understand the link between money and mental health pretty well. "Chronic mental health makes people poor, because it can mean they lose their job and they're dependent on benefits," says Professor Dame Til Wykes, a specialist in psychosis at Kings College London. "Discrimination can make it difficult to get another job.
"Because most people with mental-health problems are poorer, they don't have the savings or the means to cope with fluctuations in their finances, leading to a cycle of deprivation. You don't deal with it, you get debt problems. It's incredibly common," she says. A frictionless system makes it even easier to fall into this cycle.
Leah has bipolar disorder and writes a blog on money and mental health. When her debts got out of control, she had to move in with her mom. Others are not so lucky. "If you're going through a difficult time, these issues can be overwhelming," she says. "Keeping up with rent, difficulties getting social housing. People have to battle to get the right benefits."
The consequences can be deadly. In July 2015, 23-year-old Joshua Jones committed suicide after his online gambling debts spiraled. Academics have estimated that there were 1,000 extra deaths from suicide and an additional 30-40,000 suicide attempts between 2008 and 2010 following the economic downturn, which is linked to people struggling to cope with benefit cuts, unemployment, unstable work, and debt.
We are now learning that money and mental health are related in many different ways. A study of more than 5,000 people signed up to a new Money and Mental Health Policy Institute found that 93 percent of those self-describing as having mental-health issues said they spent more when they were unwell.
Another 88 percent said that they were behind on bills, while 80 percent said they found internet shopping a trigger for spending.
There are several different types of spending associated with mental health. The most obvious one is manic spending, which can affect people who are bipolar or have other kinds of mood disorders when they are on a high. "I would spend loads in charity shops on outlandish things," says Leah. "Like a top hat or loads of glass wear, even though I didn't have a flat and was living with my parents. Even shoes that were two sizes too big."
Others will comfort spend, trying to boost depression or low mood by buying stuff. Dan, a poet, battled with himself in shops when his depression was severe. "You stand in the shop, shaking, turning to the door and turning back and pacing to the door and pacing back," he says. "You fight it for days, but still the whisper [telling you to buy] is there. And so is the emptiness."
Those who have been found to suffer from PTSD are more likely to be nihilistic about money. They spend because the transaction, or life itself, feels meaningless. Researchers at the institute spoke to a man whose daughter had quit her job and taken out hundreds of thousands of pounds worth of debt online because she thought the world was going to end.
There used to be human barriers against this. "If you turned up at a bank and said you want to take out a $65,000 loan and they asked why and you said, 'Because the world is going to end,' then you can prove that you didn't have the capacity and that debt can be written off," says Polly Mackenzie, director of the institute. "But if you do it online, they can't know, and there is no reasonable proof."
Gift-giving, or spending on other people, is often a way of boosting your social value when you're experiencing a low mood. Lee, a software consultant, says he would get his friends expensive gifts as he tried to buy himself into a life he wanted. "I wanted to be able to afford all these lavish restaurants and be this person I was making up because I was lonely in my own head," he says.
He knew he had a problem when he woke up in Paris, multiple times, in 2004. "I spent £2,700 [$3,500] in two days," he says. "I never even took any pictures."
It took another three years before Lee was diagnosed with bipolar disorder. Two and half years ago, he was declared bankrupt, about $40,000 in debt, and with hardly any friends left after borrowing so much money off them and lying over the years. "Going bankrupt was the best thing I ever did, the relief," he says. "I'd forgotten what being able to sleep was like."
Addicts will spend money to feed their addictions. But the move to online gambling has also removed the human barriers that used to stop people with mental-health problems spending. Professor Til remembers one case before internet gambling where all of the local betting shops knew not to serve one of her patients because when he was manic he believed that he would always win. He got into masses of debt. "Nobody is there to stop you online," she says.
There is support out there. StepChange, the money and mental-health charity, guided Lee through the process of going bankrupt. Other organizations, like Citizens Advice Bureau, offer advice too. But what might have helped Lee and Leah, even before they were diagnosed with mental-health problems, is some kind of limit—like the way your bank blocks payments if you don't warn it you are going abroad.
The Money and Mental Health Policy Institute was set up by Money Saving Expert's Martin Lewis, who is looking at ways of getting some of the barriers that human contact used to provide back in place. Banks, Martin says, should be offering ways to help people control their own money—for example, by using trusted friends or authorizing the bank to suspend an account if there are sudden withdrawals.
"We don't want banks to give special mental-health options—we want controls that will help people manage their finances in difficult times," he says.
Both Leah and Lee say that controls like that would have helped them when they needed it. Lee might not have woken up in Paris so many times in 2004 or lost so much sleep. Leah might not have wiped years off her savings and had to move back in with her mom. For them and many like them, a bit of old-fashioned friction might not be such a bad thing.
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