Understanding the Psychology of Overspending When Feeling Alone
Many individuals struggle with the urge to overspend or engage in retaliatory spending, prompting questions about these behaviors. Overspending refers to excessive use of money or resources, while retaliatory spending signifies impulsive consumption resulting from pent-up emotions. An illustrative example of retaliatory spending is the explosive consumer behavior observed in domestic luxury sections of department stores during the COVID-19 pandemic.
Though the sense of confinement from the pandemic has eased, global situations continue to be grim, marked by wars, natural disasters, rising interest rates, stagflation amidst economic downturns, and persistent inflation. Paradoxically, even amidst these conditions, consumer spending tendencies remain insatiable. According to official statistics, online shopping in South Korea has grown by an average of 16.6% annually over the past five years, with the value of online transactions exceeding 200 trillion KRW for the first time in 2022. Notably, the rise isn't just in spending volume but also in the demand for high-priced goods, especially luxury items, indicating an elevated satisfaction threshold.
Individuals often express frustration, admitting that despite intending to reduce spending, their list of desired items keeps growing. Implementing plans to cut back spending for the month is not as simple as it seems. Why is this the case?
In fact, cognitive psychologists place less emphasis on willpower and determination. The focus isn't on the phrase "I shouldn't do this" (e.g., "I shouldn't spend too much"), but on its outcome – a likely result of something already rooted in one's mindset. Thus, the effectiveness of determination depends on addressing the fundamental causes before the outcome. Two overlooked but vital aspects of the psychology of overspending are rest and loneliness.
Lack of Rest Spurs Impulsive Spending
Modern life is often hectic, leaving little time for rest and relaxation. People desire stronger stimuli as their minds become busier. A study by Dutch psychologists Reine C. van der Wal and Lotte van Dillen provides insight into the correlation between a cluttered mind and stimuli. Participants were given lemonade (or cranberry juice) and asked to evaluate the intensity of the flavors. Subsequently, Group A memorized a sequence of seven-digit numbers, while Group B memorized simple single-digit sequences. Lemonade (or cranberry juice) was consumed again, and the intensity of the flavors was assessed in comparison to the pre-consumption evaluation. Those memorizing seven-digit sequences required sweeter, more intense drinks to achieve the same perception as the pre-consumption state, suggesting that busier minds demand stronger stimuli.
To experience true satisfaction in any activity, focused attention is required. Distraction diminishes the quality and amount of satisfaction, even with the same activity. Thus, as per the findings, busy minds tend to desire more intense and stimulating experiences, potentially shedding light on the roots of overspending. When cravings for bigger rewards and stimuli become prevalent, it's advisable to reflect on whether your mind is overloaded, and whether unnecessary tasks and a busy lifestyle contribute to this.
Loneliness and Its Impact on Wasteful Spending
Research presents significant insights into the phenomenon of dissatisfaction during periods of recession or pandemics. The study led by Cynthia Cryder at Carnegie Mellon University is titled "Misery Is Not Miserly," hinting at its implications. Past research indicated that individuals experiencing psychological distress tend to overspend on unrelated items. Cryder's study indicates that even watching sad or disaster movies could trigger similar behavior. Why are distressed individuals more susceptible to overspending?
The study delves into the underlying reasons and processes. When facing difficulty, individuals naturally seek means to recover from emotional stress. A significant portion of this desire shifts to unrelated objects, representing a form of misdirected recovery. Similar occurrences are observed in daily life, such as overindulgence in food or alcohol following emotional wounds. In individuals who have faced inadequate recognition during their upbringing, a strong desire for rewards and an excessive fixation on external validation is common. During periods of societal turmoil and economic crises, the drive to recover through misdirected rewards becomes widespread.
Cryder's research also offers hints for solutions. Participants who didn't exhibit tendencies toward overspending or luxury consumption during similar circumstances demonstrated a relatively low self-focus. This means that these individuals did not attribute hardships or challenges solely to themselves, suggesting that introspection can influence the impact of external events. Those who consider difficulties and challenges to be uniquely their own tend to feel more isolated and susceptible to overspending. This highlights the necessity of combating loneliness through interaction, communication, and engagement with others, particularly in uncertain times.