Overspending is often a battle of reason over emotion. Here’s how to be more frugal
A few weeks ago, I purchased a set of Japanese pens for no reason other than I could afford them. A box of 20 cost me $48.
Never mind that I already had an unopened box of pens stashed away in a drawer somewhere while I got through the ten that are currently in use.
Within seconds of hitting the ‘buy now’ option, I started to question myself. Did I really need so many pens? Could that money be better spent elsewhere?
I was in the grips of buyer’s remorse – that awful pang of guilt that you get when you buy something on a whim.
According to Brendan Markey-Towler, economist and behavioural scientist at the University of Queensland, it’s an all too common phenomenon that is fuelled by a cognitive battle of wills.
“When you’re about to tap the card [or] … hand over some money … what you’ve got going on in your mind is a bit of a war,” he tells ABC RN’s Life Matters.
“Sometimes the emotional part of the brain wins. Sometimes the rational part of the brain [does], but it’s always [a] struggle between these two parts of the mind to work in tandem.”
Spending highs and lows
Did you know the part of our brain involved in spending is the same part that loves a good dopamine hit?
“A lot of the reason … we buy is to just feel better, [for] that little ‘sugar high’ that we get,” says Nazeem Hussain, the comedian and former tax consultant who presents the ABC’s The Pineapple Project.
“But once you actually hit buy or receive the product, the feeling is nowhere near as good as the point leading up to that purchase. So, it’s just a disappointment … then you’re riddled with guilt. And then to overcome that you might buy something again. So it’s this cycle.”
Dr Markey-Towler agrees.
“The part of our brain that is doing this responds to sugar in a similar sort of way. It also responds to cocaine and alcohol,” he says.
“It’s that part of the brain that’s driving us when we’re making those sorts of [spending] decisions.”
And according to Dr Markey-Towler, the more awareness we have about how that part of the brain works, the more frugal we can be.
How much does price matter?
You might think that cost plays a role in our spending decisions but Dr Markey-Towler says that’s not necessarily the case.
“You’ll typically hear that price is the most important factor. In reality, it’s a bit more of a [mental] check [in]: okay, can I afford this?” he says.
“What’s really driving you is that emotional hit, that need to satisfy a desire that’s welling up deep inside you.”
Dr Markey-Towler says when we make purchasing decisions, there’s a tension between two competing parts of the brain.
“The more rational and forward-thinking parts of your brain are [saying] ‘hang on … emotional mind, I, rational mind, am trying to get you to look at the longer-term impact of your decisions’,” he says.
This struggle to make the right decision, Dr Markey-Towler adds, is what can lead us into that cycle of impulsive shopping and regret.
The good news is that thrift can be cultivated – if we exercise a little self-awareness.
“[Before] hosting the Pineapple Project, I would … just spend needlessly … to make me feel better, I [would] buy clothes and wear them once or twice,” Hussain says.
“But once you’re aware of how much your emotions play a role in buying or making the decision to buy, you’ll be surprised at how much you do needlessly spend,” he adds.
“If you can deal with [the] underlying emotion, you might save yourself a purchase.”
Dr Markey-Towler says it also comes down to willpower, which, like a muscle, grows stronger with practice.
“[Willpower] strengthens with use over time … so it needs replenishment,” he says.
“So, the longer you are [away] from that replenishment, the more this muscle, which is your willpower, is depleted and … unable to restrain your emotions.”
Frugality vs miserly
How do you know if you’ve crossed the line between savvy shopper and Ebenezer Scrooge? Again, self-awareness is the key, Dr Markey-Towler says.
“You can look inside yourself, and … if you find that you’re becoming really obsessive over saving money, that it physically hurts to hand over the credit card, then you know that you’re probably crossing the line from frugality into something that’s a bit more pathological,” he says.
As for me and my pens, I’ll admit it didn’t physically hurt me to purchase any of them. But from now on, I’ll pay more attention to my emotions before I hit ‘buy now’.