LISTEN: How Emotions Drive Our Shopping Behavior
People who are reluctant to spend money on nonessential items are often trying to manage anxiety rooted in the past, according to Ross School of Business Professor Scott Rick.
Appearing on the American Psychological Association’s flagship Speaking of Psychology podcast, Rick discussed his research into how and why people spend the way they do. He has developed a scale of how freely a person tends to spend, ranging from “tightwad” to “spendthrift.”
Often, the “tightwads” who dislike discretionary spending have experienced times of true financial need in their pasts, but they continue their stingy ways long after their economic conditions have improved, Rick explained on the podcast.
“When you listen to a lot of them talk about their feelings and their thoughts, a lot of them do have memories of real distress in the past, and it's just hard to shake it once things get better,” Rick said on the podcast. “These feelings are cultivated over time, and it's hard to switch it off like a light switch, so I think for them it helps to manage the distress.”
He also addresses how spendthrifts face particular challenges with the rise of online shopping: “It can be so effortless to pay, especially if you have all your information saved already, just a couple clicks and you're out of there. You don't even know what happened. It's just like you get carried away. If you want to control that, you’ve got to put up speed bumps.”
On the podcast, Rick also discusses how attitudes toward spending can begin at an early age, why Black Friday deals are so appealing, and how adults with mismatched spending habits can run into trouble if they become a couple.