Have you tried spending money to make you feel better…but were unsatisfied shortly after? Understand the psychological reasons for overspending.
Spending money to make you feel better? Then you’re probably wondering, “why do I feel so bad after spending money?”
It’s true that spending money can give your mood a boost. That’s because it triggers a release of dopamine.
But just an hour, a day, or a week later? Not so much.
That boost has left the building, leaving you to feel guilty, or unsatisfied, or like you need more to feel good again.
Hint: you can raise your happiness if you spend on the right things…which we’ll talk about in just a little bit. So, stick around!
And this spending cycle you’re on?
Well, it’s not just good for the finances.
Don’t worry. You’re going to gain a better understanding of why you feel the urge to spend, and how to control it so that you can get the maximum amount of happiness from your money.
Just keep reading!
Spending Money and Emotions – Why Do I Feel Like Spending Money?
Part of the puzzle when figuring out how to spend less money is to get ahold of your emotions and understanding the psychological reasons + triggers for why you spend.
Psst: you'll also want to check out my list of spending habits to identify even more reasons for why you spend money.
Wondering why do you feel like spending money?
It’s like one or two of several reasons:
- You Have a Legitimate Shopping Need: Because you have a need or a want, and you want to satisfy that
- You Have an Emotional Thirst You Think Can Be Fulfilled: Because you want to feel good, and shopping in the past has given you a (temporary) boost of happiness
- You are Convinced by Really Good Marketing: Because you want what the product/service/experience is telling you you’ll get by buying from them
The first one is self-explanatory. I mean, you gotta eat and clothe your family, right?
Let’s break each of the last two down so that we can understand them better.
Psychological Reasons for Overspending – to Fulfill Emotional Thirst
Have you ever stopped to figure out what percentage of your purchases are made to quench an emotional thirst?
Let me explain.
I used to work in marketing and market research. It didn’t take me long to figure out how marketing works; you survey your target consumers and find out what their needs are, what their wants are, and you build these attributes into your existing product, or you create an entirely new product based upon these consumer needs and wants. From there, advertising takes over. Your concept or product is advertised, and the message hopefully gets across to your target audience.
Marketing is an extremely useful tool. You can gauge the feelings of people from surveys and focus groups. Sitting behind the dark glass and watching a moderator ask various questions and befriend their interviewee, you get to live in the life of an American Consumer, and you get to feel what they are feeling, and learn their obstacles, their needs, their wants, and expectations.
And then you relate these very intimate pieces of information to your brand, and you sell them products.
That is the part that I had the trouble with; it wasn’t the part where you learn about people more intimately, because I loved that part. And it wasn’t the innovation, where you take consumer needs and wants and think up very creative and imaginative, out-of-the-box solutions, because that was very intellectually stimulating and fun.
It was telling consumers to purchase a product in order to fulfill their needs and wants that I couldn’t deal with.
Even so, the knowledge that I took away from this job is just amazing. I have a much clearer perspective on business, products, how to deal with clients, how to target specific audiences, how to use my brain to solve problems. What an interesting field.
Products Do Not Solve Emotional Problems
If I could shout something from the rooftops, it might be this:
Products do not solve emotional problems.
Products are for utility purposes and can only satisfy your lower or most basic set of needs on Maslow’s Hierarchy — warmth, hunger, thirst, shelter, and perhaps some safety aspects, etc.
Marketing attempts to take these products and use them to solve your emotional problems.
Marketers know that if you can tie your brand in with some sort of emotion, then consumers will come knocking down your door to buy it.
Perhaps they can bring back memories for you, or make you feel like a wonderful parent by purchasing something, or add to your seductiveness as a female or male by being associated with a certain product.
But these are promises that products cannot keep once they come home with you and sit on your shelf. And that's usually when buyer's remorse starts to set in.
Let’s look at a few examples to further illustrate some of the silly marketing and advertisements out there.
- Dove: Recognizing inner beauty starts with purchasing this soap
- Subway: Your extra weight will practically melt away if you eat at Subway for lunch each day
- Kay Jewelers: You cannot kiss anyone without first purchasing a piece of jewelry from here
- Buitoni: This pasta is part of Italian Art History; it doesn’t belong in your pot of water, but rather hanging on the wall next to Botticelli and Leonardo da Vinci
- Spice Island: You don’t need a passport to travel the world; just purchase one of these spices and it’s like you’ve already been there
- Discover Cashback Bonus card: If you are missing out on girl time with your friends, then you get this credit card, and poof! it will come back into your life
- Clorox Green Works: Nature has now been bottled, labeled, and is ready to help you wash your windows
- Ghirardelli Chocolate: Moments of timeless pleasure, right in the package!
- Campbell’s Green Bean Casserole: Without this casserole, Christmas is now a regular day
- Arm and Hammer Cat Litter: You no longer have to clean your house; using this cat litter will give you an odor-free home that will make you worthy of guests
- Jimmy Dean Sausage: Eating this will keep the morning sun from fading away
- Febreze candles: Purchasing these individually packaged candles will help you be kinder to the environment because they ‘burn more evenly than other brands’
- Axe Deodorants: Fellas, forget about pick-up lines, dressing nicely, conversation, or looks; you will get laid if you purchase this product
- Dos Equis Beer: This will keep you thirsty for life and adventure, well into your older years
Can you clearly see now how none of these products can deliver on the emotional promises they make?
Now that we’ve talked about psychological reasons for overspending, let’s talk about when you want to spend money because of excellent marketing.
Great Marketing Claims that Can Make You Want to Spend More
Let's face it: some of the most commonly used marketing messages around the holidays + beyond are plain bologna disguised as roast beef.
So how do you know which deals to focus on so that you can avoid getting sidetracked and stop buying things you never meant to?
I'm going to help you get past the hype by decrypting 3 commonly used marketing messages, starting with the one that inspired this post:
Marketing Message #1: The More You Buy, the More You Save!
Will you actually put money into savings from buying products? No. In fact, it's just the opposite. By taking people up on this marketing message and making that purchase, money flows out of your hands and into theirs.
But saying this is far sexier sounding than saying the truth, which is: the more units you purchase from us, the less the cost per unit you will pay out of your pocket.
Marketing Message #2: Hurry! This One-Day Sale Won't Last Long
Does anyone else get tired of hearing about Macy's one-day sales…which happen to take place probably 60 one-days out of the year? I feel like if you're going to call something a one-day sale, it should happen maybe once or a few times a year at most so that people get really amped up about it, like Filene Basement's Running of the Brides where wedding gowns normally priced up to $9,000 are priced down to as low as $249.
Take the urgency out of this equation by realizing that most stores who advertise one-day sales actually will put the same items on sale again in the next few months. And what happens if you find an item, pay full price for it, and then it goes on sale weeks later? If you paid with your credit card, then use your price protection program to get a refund of the difference. Over the years I've done this twice, for a total refund of $31. Ka-ching!
Marketing Message #3: Buy One Get One Free, Just Pay Shipping & Handling/Processing & Handling
Okay, okay, I expect that free deals are going to have a shipping cost tacked on. It seems quite fair, anyway. But when it's not fair is when manufacturers use this as a scheme to recoup some costs while still maintaining their marketing message that you are getting a “free” product.
Case in point: I once had an offer in my inbox saying I would get a free photo book after purchasing another one. Score! I love to scrapbook (like when I created this inexpensive family heirloom to commemorate our Hungarian roots).
Upon opening the email, I found that you had to pay shipping. Okay, I get that.
But after ordering the photo book, they charged me an egregious $10.99 for shipping & handling, for each photo book! So I had to purchase the first book, and then pay an inflated $21.98 in shipping & handling…meaning I certainly did not get a “free” photo book, after all.
Another example is on Flexablehose.com where they offer a Buy 1 Get 1 Free deal, plus processing and handling (P&H). So you end up paying $7.99-$10.99 P&H for the first hose, then an additional $7.99-$10.99 P&H for the second hose…coming to a total of at least $15.98 in P&H fees (which likely covers their cost of manufacturing for that second hose they're giving you for “free”).
Bottom line with these kinds of deals? Be sure to check how much the shipping & handling/ P&H will cost before making your decision. Then you can determine if you're really getting ahead or not.
Could any deals offered under these marketing messages still be a deal for you? Absolutely. But it's important to not go into them thinking that you are getting exactly what the marketing hype says you are…because in most cases, the truth is being stretched further than a $1.00 bill at a $1.10 dollar store.
Now that we’ve discussed how really good marketing can get you to overspend, let’s look at when you CAN get extra happiness or satisfaction with your spending.
How to Get Satisfaction from Your Spending
You might think by now that shopping is not the answer to a person’s happiness.
And, ultimately, that is the truth.
However, you can actually still increase your happiness some IF you do it in the right way.
Let’s look at how to increase your happiness by buying the RIGHT things to make you feel better.
1. Spending Money on Things Vs. Experiences
Would you be happiest with a new dishwasher…or with a weekend trip to the local beach?
A significant amount of research has been done linking happiness with spending money on experiences, rather than spending money on things.
Ryan Howell first introduced this concept. And one of the reasons for it is something called “memory capital.”
Which basically says that while you might get used to and even bored with the new dishwasher (or, insert other item you buy), the memories you’d get from an experience like going to the beach will last forever.
Psssst: Here’s further reading on how buying experiences not things will increase your happiness.
Author of French Women Don't Get Fat also has a great take on how to take action on this in real life: make sure that when you spend money on experiences, you're indulging at least two or more of your senses.
The importance of indulging the senses? Is it'll help you to feel satisfied and to get pleasure out of whatever you do.
Whatever you spend your prioritized money on, make sure you indulge at least two or three senses in order to heighten your pleasurable experience.
2. Spending According to Your Personality
After analyzing 2,000,000 transactions across 2,000 different accounts, do you know what was found?
“Personality-matched spending increased positive affect.”
In fact, the authors of this study found that people who match their purchases to one of 5 spending-personality types were actually happier than their total income or their total spending could do.
I think this can also help with guilt you might have around spending – if you spend more in accordance with your natural personality, then you’ll feel less guilty about where your money is going.
The Big Five personality traits are:
- openness to experience
Here’s a bunch more info on what you should or should not be spending your money on by your personality traits.
I hope I've shown you spending money to make you feel better usually doesn't work. That is, unless you buy experiences with your money rather than things, and if you spend in accordance with your personality trait. Aside from that, hopefully you understand your emotional and psychological triggers for spending and overspending, so that you can now keep more of your hard-earned money in your own wallet.
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