By Mahveen Khalil
Money doesn’t buy happiness - or so they say. I would argue to the contrary - though not in the way you might think. I don’t mean the satiation of materialistic desires, like buying that sports car or the designer bag you’ve been eyeing for who knows how long. I mean that money can enhance, or sometimes even cost us, something far more valuable: our interpersonal connections.
Though this might seem like a redundant statement to make, there really is a psychology behind this, and it goes far deeper than you might think at first glance. Money essentially governs our ability to enjoy life to the fullest, to have enriching experiences, and to make lasting memories. Often, these aspects are at the core of any meaningful interpersonal connection. First, we’ll take a look at how money can affect friendships, then we’ll examine its role in romantic relationships, and lastly, we’ll discuss the pressing need to increase financial literacy in youth to prevent money related issues, and how to tackle such problems.
As an overarching theme, I want to start with an analysis of Maslow’s Hierarchy of Needs. If you’re a psychology student, you’re likely familiar with this model. Humanistic psychologist, Abraham Maslow, organised a series of what he believed to be essential needs for human flourishing into a pyramid, stating that needs at the base would have to be achieved as a prerequisite to achieving needs at the top, in an ascending order (McLeod, 2025). The pyramid begins with physiological needs, safety needs, then love and belongingness, self-esteem needs, and self actualisation.
As per the theory, you must fulfill each need before moving onto the next from the bottom up; kind of like advancing through levels. In the modern day, money can actually play a role primarily in each of the first three categories. For physiological needs, food is involved in order to keep ourselves alive and nourished. We buy food day in and day out, making it one of mankind’s most recurring and common expenses. The umbrella term safety needs includes shelter - as in, housing, and regardless of whether you’re buying or renting, this costs a substantial amount of money. Next, love and belongingness - and this will be the key stage of analysis in this blog.
In order to maintain friendships and seek belongingness, Aristotle argues that friendship must be active - what he specifically mentions is living together, but the essence of this point is that friends must spend time with one another (Aristotle). Even doing things like travelling can help enhance the bond of friendship. However, there is a common denominator associated with all these activities - and it is that generally, these activities require financial stability and independence. It would be extremely difficult to travel anywhere, for instance, if you did not have the money to do so. And even if you did have the funds to just travel, you would also have to account for the enriching experiences that you would want to indulge in on your holiday, like trying local foods, going to local attractions, and exploring the place you are visiting. If we think on a smaller scale, even going out to dinner with a group of friends costs money - a price that not everyone may be able to afford, or at least not on a regular basis.
If you aren’t able to splurge on a holiday, go watch the latest release in IMAX, or even just grab a quick bite, and these are activities your friends hope to do, then it is inevitable that you may inadvertently become excluded from group, and over time, you may find that this weakens the bond of your friendship. At the very least, your involvement in your friends’ lives will decrease, and this could lead to you feeling out of the loop.
That said, it is arguably more difficult to sustain a romantic relationship when finances are strained. When you’re in a relationship, the pressure becomes a lot more immense. Standards are raised, expectations are higher, and finances become a much larger factor in the success of the relationship.
There is the long-standing debate of who pays on dates, how to handle finances when you are living together, if a joint bank account is the right fit for you, and the list goes on. Yet, whatever angle you choose to take, financial decision making is one of the make or break factors in a romantic relationship. According to TD, 71% of Canadians would think about breaking up with their partner if they were being dishonest about their finances (Toronto Dominion Bank, 2025).
One way in which this happens is the “if they wanted to, they would” mindset. This ideology usually places more of the onus on males, suggesting that people will do things for you if they really want to, and you shouldn’t have to ask, suggest, or negotiate. For instance, some people believe you shouldn’t have to ask a man to pay for you on the first date, and that if he really wants to pursue things seriously with you, he’ll just do it. However, this mindset totally ignores various cultural and socioeconomic backgrounds, and further does not consider any situational factors. For instance, if you are going out to grab a coffee, or a quick bite, and your partner usually pays but didn’t offer just one time, this doesn’t seem absurd. That said, things can shift if things come to an always or never crossroads - 65% of Canadians said that they would consider breaking up with their partner if they never offered to pay for anything according to TD - not accounting for any gender differences.
Figure 1 (Chou, 2016)
One factor that influences attitudes towards financial management could be the difference between coming from an individualist vs. a collectivist culture. It tends to be the case that people with individualist inclinations will choose to focus more on their own personal needs, and people with collectivist habits will prioritise the needs of the group above their own. Hence, in Western cultures, splitting the bill or paying for yourself seems to be a norm due to roots in individual beliefs, where everyone should be responsible for themselves. Other cultures, like Chinese culture, score very low on individualistic tendencies, only 20 out of 100 as per Hofstede’s score - and often, individuals will even argue to pay for the entire bill, no matter how large the party, as it indicates investment, care and respect for the relationships at hand (Nguyen, 2016). Even in my Pakistani culture, we see paying the bill as a gesture that comes from a place of love, to express how much we value our relationship with the people we surround ourselves with, as a way to take care of our near and dear.
So, we have all these scenarios laid out - now what do we make of them? How do we navigate these issues, or better yet, put ourselves in the best possible position to minimise them altogether?
My line of argument is highly aligned with my part-time job as I make my way through university, because I believe that this skill is so important to acquire from a young age. We grasp the habits and lessons we learn when we are young far more deeply than at an older age, and it’s easier to build habits early on. That’s why I strongly believe that children should be exposed to important financial conversations, because believe it or not, they really do get it when you explain it to them in a digestible, simplified way. I teach after-school programs that are all about developing important life skills, one of them being financial literacy. When I was a child, I remember getting pocket money every month, but there was one rule - I was allowed to spend only 30% of my allowance on wants, and 70% had to go towards saving. This was a more simplified version of the more common 50-30-20 rule. The 50-30-20 rule suggests spending 50% of your income on actual necessities, allocating 30% for spending on wants, and 20% is direct towards investments. Now, at a young age, I wish I had also been introduced to investing, because it is not quite as intimidating as it may sound. Now, as I teach it to older elementary school and middle school students, I know that it is an achievable concept to grasp even at a young age!
The way you could describe it to a kid is like growing a tree. You plant a seed, and over time, your tree will grow - it might take a while, it might be affected by the seasons, but logically, the tree will continue to grow under the right conditions - that is, if you plant it in good soil, water it, and continue to give it sunlight. This is the same as saying, you can put a little bit of money into a reliable investment asset, like an exchange traded fund (ETF) or a share in a company, and over time, keep adding small amounts of money to it - and over the months and years, you will likely make a return. There are so many factors that go into understanding what sort of investments you may want to make, based on factors such as your risk tolerance, intended investment time frame, and even things like your overall personality. To read more about investments made simple, I would highly recommend reading Emilia Kasprzak’s article on the topic, “Mind Over Money”
All that to say, introducing children to healthy financial habits can help shape their relationship with money later on in life, which can significantly impact outcomes in terms of social relations in adulthood. Although this is the ideal outcome, it’s not always that simple. Sometimes, the financial environment we grow up in can stunt our ability to become financially independent even later on in life - not because it’s not possible to grow out of a place of limited financial means, but because it can affect our mindset. Take, for example, people who have grown up in poverty. Going back to Maslow’s hierarchy, if your parents weren’t able to afford proper groceries, if your electricity got cut, if your family was struggling to pay rent, this likely meant you were not able to attain the basic needs in the pyramid like physiological needs and safety, then this in of itself can create a form of childhood trauma. You may find yourself grappling with financial anxiety, self-worth, a scarcity mindset, overworking yourself to compensate, and most relevant to this article, difficulty in relationships. Not only due to the cost that comes with connection, but also because you may find it hard to relate to others. If your friends or significant other talk regularly about their lavish getaways, expensive cars, and even the organic produce they buy from the store, you may feel alienated (Reismen, 2024).
If you find yourself relating to any of these situations, you are not alone, and there are ways you can begin to heal your trauma. You don’t have to make leaps and bounds right away - just taking baby steps to begin with is all you need to ease your way into making lasting change.
Psychology Today has put together a list of things you can do to make the transition into financial independence much easier. The first step you can take is to name your experience. Put into words exactly what you experienced, because that can be the first step towards accepting that this happened, and solidifying your intent to move forward. Next, you can begin to take small steps towards creating safety and caution, to a healthy extent, surrounding money. For instance, creating an achievable budget for the week, even if it’s subject to change from week to week depending on your expenses, will allow you to feel more secure in your spending. Thirdly, always remember to be considerate and compassionate towards yourself, as this will help you let go of the financial guilt or shame you may have. The next step you can take is to make sure you aren’t isolating yourself - this will only cause you to ruminate over your shame and regret, and seeking help, be it a friend, family member, or a professional, can help you get what you’re carrying off your chest. Lastly, work with trauma-informed professionals specifically, who use methods like trauma informed cognitive behavioural therapy or eye movement desensitisation and reprocessing (Marter, 2025).
Overall, the most important thing to remember is that no matter where you are in your financial journey, what hand you’ve been dealt in life, or where you may be at in terms of your interpersonal relationships - there’s always room for growth, and more understanding of one another, especially for young people who are navigating some of their most formative friendships and relationships.
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