How Money Worries Can Hamper Performance At Work There’s no question that dealing with mor

How Money Worries Can Hamper Performance At Work

There’s no question that dealing with mortgages, car payments and other bills takes up time and energy. But having a tight budget may also zap our ability to think clearly, scientists recently reported in the journal Science.

In a series of clever experiments involving farmers in India and shoppers in New Jersey, scientists found that people are worse at solving puzzles — similar to those on the IQ test — when they’re first reminded of money problems.

“Financial constraints capture a lot of your attention,” says Eldar Shafir, a psychologist at Princeton University, who helped lead the study. “Then there’s less bandwidth left to solve problems. Your cognitive ability starts to slow down, just like a computer.”

And the effect is big. After a quick reminder about money issues, people’s performance on the puzzles drops down by at least a quarter — or approximately the same mental hit a person takes after staying up all night.

In the study, Shafir and his colleagues approached people at a shopping mall in Lawrenceville, N.J., and asked them how much money they earn. “We had a pretty good selection of middle-to-low income Americans,” Shafir tells Shots. The lowest salaries were about $20,000 and the average was about $70,000.

Before the participants started the puzzles, they answered a question about money: “A person’s car breaks down, and they need X dollars to fix it. Tell me what are the options they have available?”

People with lower incomes did just as well on the tests as those with higher salaries when the amount of money required to fix the car was low, like $100. But when the scientists raised the amount to $1,500, the less affluent participants performed worse on the puzzles.

“The money question tickles that part of the brain that has to do with your own finances,” says Sendhil Mullainathan, an economist at Harvard University who also led the study. “Then you start thinking, ‘Gee, how I am going to pay rent this month?’ ” And that interferes with your ability to think through a problem, he says.

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Illustration by Katherine Streeter for NPR.