A few weeks I wrote about how a lack of money management predicts individuals' compulsive spending, regardless of their personality, gender, age, and income. These results were based on a study (Sadness, Identity, and Plastic in Over-shopping) published in the Journal of Economic Psychologywhich was conducted with two students of mine former (Grant Donnelly and Masha Ksendzova). Below, Masha and I answer a few more follow-up questions:
- Why do “materialists worry more about finances” than the average consumer but continue to spend in an irresponsible manner? Prior research suggests that materialists place a greater value on financial well-being and success--however, research also shows materialists are less satisfied with their finances and standard of living. In sum, money is important to materialists, and they want more of it. However, because they feel a lot of excitement of a seemingly promising purchase "in the now," maybe this overrides responsible planning. This might be especially true when materialists think about their insecurities; during these times they would rather focus on a simply and quick fix rather than a long-term improvement. Our own research posits that materialists may be trapped in a cycle of falling below their financial expectations and, ironically, compensating for this disappointment by shopping.
- How can you stop yourself from heading towards this direction and what can you do if you are already there? Honestly, the single best thing you can do is learn about your spending habits. That is the major reason we developed an interactive website (beyondthepurchase.org) so people all over the world could take free psychology quizzes to find out how their spending choices are affecting their happiness. We use peer-reviewed published psychological surveys to provide individual's with personalized feedback, graphics, and practical happiness tips. Once you know more about your spending habits (are you a compulsive buyer? how well do you manage your money? are you a gadget-head or an experiencer?) you can lower your risk of falling into the compulsive buying spiral by restricting yourself from credit card use and relying on cash transactions. Spending cash is psychologically more difficult. Additionally, compulsive buying tends to occur when people are experiencing negative feelings, suggesting that compulsive buying may be a coping response. Here, the person's goal should be finding alternative coping mechanisms that deal with negative emotions in a more healthy and productive way.
- There is an obvious awareness of a problem, but why can they not stop or seek treatment? There's something in psychology called "the ostrich effect," and it suggests we pay more attention to good information and try to limit our awareness of bad information. We also call it "the pain of knowing;" it may be so debilitating to think about your poor financial choices that individuals would rather ignore their debts than face them. When overspending is extreme enough to be considered compulsive buying, individuals experience a great deal of guilt and sometimes go as far as to physically hide their purchases. A sort of out of sight out of mind strategy. These individuals understand there is something wrong with their behavior, but may be too scared to face reality; unfortunately, "sticking their heads in the sand" only perpetuates the problem.
At BeyondThePurchase.Org we help people make the connection between their spending habits – how do you spend your money and who do you spend it on – and their happiness. To learn about what might be influencing how you think about and spend your money, Login or Register with Beyond The Purchase, then take a few of our spending habits quizzes:
How do your current priorities impact what you buy? Take our Life Goals and Buying Choices and on your feedback page you will learn you will learn how current priorities impact what you buy.
How does your expected happiness impact what you buy? Take our Forecasting your Happiness and on your feedback page you will learn if happiness matters more when you are buying a life experiences or a material item.
How materialistic are you? Find out by taking the Materialistic Values Scale.
Are you a compulsive buyer? Take the Compulsive Buying Scale and learn about your spending habits.
With these insights, you can better understand the ways in which your financial decisions affect your happiness.