The disturbing thing that happens to your brain when you lose money

Snoop Dogg famously rapped in 1993 that he keeps his mind on his money and his money on his mind, but according to a new study, he’s certainly not the only one. 

Researchers at the National Research University, Higher School of Economics say critical financial or economic situations, more specifically losing money, evoke tangible changes in the human mind.

Our brains recognize the importance of these events quickly, sparking alterations in the cortex that make it easier for the mind to recognize, process, and react to similar occurrences in the future. 

We all know the feeling. After a long day at work or out and about you come home to find a stack of bills waiting for you in the mailbox. Perhaps you just finished a day of holiday shopping only to discover a hefty parking ticket waiting on your car’s windshield.

The moment you see those letters or spot the pink ticket sitting on your car, you’re filled with dread. Similarly, many people can’t help but think the worst whenever they receive an unexpected call from their accountant. 

How can something as vague as a phone call or pink note on your windshield in the distance spark such intense worry so quickly? After all, that call from your accountant could be good news and that “parking ticket” may turn out to be a flyer for a new restaurant.

The research team says that when an individual experiences a financial loss, the brain takes note and remembers to react strongly to similar future events. 

It’s well documented that learning a second language or mastering a musical instrument sparks changes in how the brain interacts with external stimuli. A seasoned musician can differentiate the sounds of various instruments instantly, and someone fluent in French will immediately recognize that language if they hear it being spoken in a room full of English-speakers. 

These unique, individual sensitivities to external factors are a result of changes in the brain, just like how someone who trades every day on the stock market instantly feels a sense of panic when they see red arrows pointing down.

“We hypothesized that, like the plastic changes in the brain during the learning of a second language or playing a musical instrument, similar neuroplastic changes occur for certain signals that are associated with important economic outcomes. For example, the sound of a slot machine can for a long time be associated with a big win or loss while visiting a casino, which causes a particularly strong reaction in our brain in the future,” explains Anna Shestakova, director of HSE University’s Centre for Cognition & Decision Making, in a release.

For this research, scientists gathered 29 participants and had them play an economic game called the monetary incentive delay task (MID Task). The game requires players to react as quickly as possible to signals representing an opportunity for reward or a chance to avoid a loss. This specific task was chosen because it allowed study authors to separate participants’ “brain reward processing” into two phases: reward/loss expectation & learning.

Throughout multiple rounds, each subject could lose anywhere between one and 50 “monetary units” depending on the specific sound they heard during each game. The idea was that after a few rounds the person would recognize which sounds precede big monetary losses and react accordingly to avoid said financial setbacks.

As expected, participants started showing plastic changes in the auditory cortexes of their brain as the game went on. These changes helped their minds quickly recognize and act on sounds predicting a loss of money. 

“This is the first experimental evidence to show that economic activity can actively change the brain,’ comments study co-author Aleksey Gorin, a graduate student at HSE University. ‘Signals leading to financial losses evoke rather fast neuroplastic changes. Therefore, they are identified by the brain automatically, and do not require voluntary attention.”

A link was also noted between these auditory cortex changes and subjects’ “learning signals.” In simpler terms, participants who showed the ability to learn quickly in general also displayed more prominent cortex changes. This suggests brain changes in response to financial situations are a learned behavior like any other.

It’s no secret that money shapes our lives. The numbers in our bank accounts dictate where we live, what we buy, and how we spend our days. It isn’t always fair, but that’s reality. This research suggests that beyond all of that, an individual’s financial experiences throughout life also influence how they perceive the very world around them and react to varying sounds, images, and events.

The full study can be found here, published in Scientific Reports.