We have all heard about how we are becoming more of a consumer society. We are buying products that come in and out of fashion more rapidly than ever. Many electronic products have such a short lifespan that they may as well be disposable. There is a lot about the way businesses work and the way people perceive shopping that encourages us to constantly spend money. This article will look at the reasons why we spend money, how different types of spending can impact the way we feel, and what can happen when we become more aware of these factors.
Drives to Spend
There is always a reason a person makes a purchase. It could be a thoroughly considered and rational reason, or it could be a more impulsive and emotional decision. Here are some of the common drives to make a purchase:
Legitimate Need
This could be food, bills or hygiene products. These purchases are the ones you are least likely to look back upon with regret, and which will aid you most in your life.
Impulse and External Influences
The vast majority of people have made an impulsive purchase at some point. This is where you didn’t really need something, but bought it because you wanted it in that moment. This can be more difficult to resist when advertisers adopt marketing tactics that promote this kind of behaviour, such as the fear of missing out, scarcity cues and targeted advertising.
Behaviour and Feelings Towards Spending
Some people dread going out shopping, while others find it enjoyable. If you enjoy shopping, you are more likely to spend money. Some people may also use shopping as a form of emotional regulation, also known as “retail therapy”. For these people, it provides them with stress relief, a distraction from sadness, or relief from boredom.
People often associate shopping with positive emotions, although they can also sometimes result in regret later. Research has found that the type of purchase we make affects our emotions in different ways, some more positive than others.
Types of Purchases
Our feelings towards buying can be dramatically influenced by the type of purchase we make. Here are a few types of purchases you can make and how these affect our quality of life and emotional state.
- Personal Material Purchases: People typically report feelings of happiness while searching for and after making these types of purchases.
- Experiential Purchases: This is the spending of money on an experience. This could be a trip away from home or a spa treatment. In general, people who are living comfortably tend to report greater levels of happiness and commitment to their decisions when making experiential purchases compared to material purchases1.
- Services/Time Saving Purchases: This could be anything from hiring a cleaner to taking a taxi. This can have different effects on people depending on their attitude towards money, with people who value money over time reporting greater happiness when making time-saving purchases2.
- Buying for Others: Studies on spending behaviour have found that people report greater happiness from buying for others when compared to spending on material goods for themselves3.
- Donating to Charity: When donating to charity, you are essentially purchasing something for someone else that they really need. You could be paying for medical supplies for a community, food for a family, or the labour and material costs of building a water well. Just as making purchases for people in your life that you care about can bring you happiness, giving a gift to someone you don’t know can offer a rewarding feeling of happiness. Even very young children tend to feel greater happiness when giving to others. This feeling is amplified when there is some personal cost associated with the act of giving4.
We have looked at the drivers of spending and the kinds of purchases people can make. It is clear that spending is strongly linked to emotions and can elicit feelings of happiness. Excessive and unnecessary spending may be preceded by excitement and anticipation, but result in clutter, a lighter wallet and buyer’s remorse.
Making Good Spending Decisions
When we become more aware of the factors that drive us to spend and how this impacts us emotionally, we can make wiser purchasing decisions. It is worth looking back at your most recent purchases. What led you to buy them? How many continue to provide you with value? Were your expectations, both materially and emotionally, met?
This exercise is also useful before making a purchase. If you were considering spending £50 on a new pair of jeans, take a moment to decide if this is a legitimate need or a more impulsive decision. Consider whether it really is worth the material and emotional value you’ve placed upon it in that moment. If you are seeking that feeling of happiness you get when you buy something, is this the kind of purchase that will best achieve this? Research suggests that those who are chasing positive emotions may find even greater reward in giving to others.
If you have browsed through the pages of The Anonymous Project’s website, you will know that this same £50 could buy a whole family living in poverty food for a month. It wouldn’t be fair to say that you shouldn’t spend any money on yourself simply because someone else needs it. However, this side-by-side comparison highlights just how far the money spent on what might be an impulse buy could go if spent on something else. It emphasises how unnecessary spending could be converted into something even more meaningful and lasting. And it does this without robbing a person of their emotional reward. In fact, it may even provide a greater sense of fulfilment.
From an Aqiqah to celebrate the birth of a child to a fresh water well for an entire community, when you donate to The Anonymous Project, we have the delight and honour of delivering your gift to others. There is a great sense of satisfaction in knowing that a donation will make a palpable difference to others. We would like to believe that donating could be a rewarding alternative to an unnecessary spending spree.
Conclusion
Most of the time, the act of spending money is a positive emotional experience. Most people tend not to think much about what shapes their behaviour towards spending. This lack of awareness is often exploited to encourage sales, leading us to make impulsive purchasing decisions that we later regret.
Once we understand these influences and our own wants and expectations, we can make more conscious decisions about how to meet our needs. We can avoid regret by refraining from making unnecessary purchases and by more carefully choosing where to allocate our money.
If you are using spending to achieve a sense of happiness, the type of purchase you make can have a significant effect. People generally tend to report a greater magnitude of happiness when buying for or giving to others.
We challenge you to pause for a moment the next time you are about to make a purchase. Consider what is really behind the drive to spend. Think of what you are hoping to get from it. If the research is right, it’s possible you could gain greater value from redirecting just a small portion of the value of that purchase towards a cause that aligns with your values.
References
1. Lee JC, Hall DL, Wood W. Experiential or Material Purchases? Social Class Determines Purchase Happiness. Psychol Sci. 2018;29(7):1031-1039. doi:10.1177/0956797617736386
2. Lok I, Dunn EW. Are the benefits of prosocial spending and buying time moderated by age, gender, or income? PLoS ONE. 2022;17(6):e0269636. doi:10.1371/journal.pone.0269636
3. Lok I, Dunn EW. Are the benefits of prosocial spending and buying time moderated by age, gender, or income? PloS One. 2022;17(6):e0269636. doi:10.1371/journal.pone.0269636
4. Aknin LB, Broesch T, Hamlin JK, Van de Vondervoort JW. Prosocial behavior leads to happiness in a small-scale rural society. J Exp Psychol Gen. 2015;144(4):788-795. doi:10.1037/xge0000082