It wouldn’t have been fair to publish this post before Christmas, with many in the spending frenzy that takes hold despite countless good intentions. “Just an extra little something,” I’ve said to myself, “it’s Christmas.” Getting caught up in the moment can add up rapidly, and you wind up spending more. But emotional triggers that govern consumer behavior occur throughout the year. A reality check about your consumer spending can lead to more intentional decision-making with enjoyment and true peace of mind the result.
As modern consumers, the biggest thing most of us have bought is a bill of goods. Spending isn’t going to make you feel better in the long run. Throughout post-war history, generations have been brought up defining success on rather superficial terms. Keeping up with the Joneses. “He who dies with the most toys, wins.” Clique-based envy and peer pressure in school. We learn to sort things out, and then we assign characteristics to create a sense of order, and then we ascertain our place within the mix.
We can get in trouble making these comparisons, though. Inevitably, we find ourselves coming up short in some way, and we begin a compensating behavior. For some, this can be the beginning of a spiral into serious disorder, but for many more who find themselves lacking, consumer spending is the remedy. Remember pre-recession levels of retail therapy? For every recession frugalista, there’s a “shame shopper” using luxury as a kind of porn, in desperate need of a reality check.
Most of us put stuff right next to status when we’re mentally sorting. A reality check about our purchasing decisions will reveal associated factors: we thought a new pair of shoes would make us feel better about something else, or we wanted to impress someone with a fancy dinner out or luxurious car. Consumer behavior, as studied by Loretta Graziano Breuning, in I, Mammal: Why Your Brain Links Status and Happiness, is hard-wired in our physical chemistry: “Your brain longs for status the way it longs for rich food, attractive mates and the safety of the herd. . . Your mammal brain cares about status as if your life depended on it because from the perspective of your DNA, it does.”
The limbic system in the brain releases “feel good chemicals” as a reward for behaviors that meet perceived needs. This is a throwback to the simplest survival mechanisms in early mammals, but as our cortex grew in size and its function evolved to deal with concepts in the abstract, the limbic system remained linked. So, when we get the sale at work, or see the envious neighbor coveting our fancy new car, we’ll get a temporary high courtesy of a chemical cocktail of endorphins, seratonin, oxytocin and dopamine emitted by signals sent by the cortex’s limbic partner. Likewise, when our perception of social dominance is affected by failure, lack of recognition, or someone else’s expensive jewelry, the brain will release other chemicals in an echo of those ancient survival strategies.
Status, in our primate’s brain, is related to reproductive success. In modern life, this often translates into leaving a legacy of some other sort: creation in the form of a thriving company, a large bank account, art or writing. The brain will keep score and reward or respond according to its interpretation of how successful these efforts are. This is why “retail therapy” or other status-seeking behaviors only have temporary effect. Graziano Breuning says “We were not designed to gush happy chemicals all the time.” Instead, in order to get that rush, we have to once again do something that our brain interprets as advancing our personal survival prospects.
Marketers use what are called “susceptibility scales” to quantify predictive consumer behaviors and their causes. Normative social influence is that which leads an individual to engage in conforming behavior, such as consumer spending, due to a desire to be associated with a group and its social norms. In everyday life, normative social influence is prominent in everything from trends in fashion to behaviors in the workplace, with media promoting it.
In “Predicting Happiness: How Normative Feeling Rules Influence (and Even Reverse) Durability Bias,” Stacy L. Wood of the University of South Carolina and James R. Bettman of Duke University discuss how marketers influence consumers’ estimate of how long an anticipated purchase will make them happy :
A reality check would reveal our flawed thinking in overestimating how good spending money on something is going to make us feel, and how long that good feeling is going to last. In order to maintain a “feel good” consumer spending-induced state, we must frequently repeat the behavior. In The Pathway to Happiness, Gary van Warmerdam concurs: “Emotional reactions usually stem from your assumptions about how life “ought to be” not from actual events. You create assumptions about people, relationships, business deals, and stocks you invest in. Your false assumptions (beliefs) become the set up to future emotional reactions.”
Our reality check has to continue on to address the impact of what market researchers call “Maximum Use Imperative.” This is a fancy name for the impulse or incentive to purchase something that is rarely used or not needed. It’s why I’m so taken with the idea of spending money I don’t need to on a tropical wardrobe for our trip to Hawaii in a few weeks. Reality check: Minnesota summers don’t last long enough to provide a suitable return on a large investment I might make.
On Moneybold.com, April Dykman advises consumer spending should be focused on things you do every day: “Who knows how much I spent over the years, buying new apparel every time a new hobby interested me or picking up a little black dress without so much as an event on my calendar?” Dykman goes on to cite decisions such as keeping a big house so you can entertain the family once a year at Thanksgiving (a subject Pete and I discussed during our downsizing process – we had everyone at the new townhouse and things worked out just fine).
Consumer spending can also be affected by our tendency to identify present circumstances as a norm. This is called Hedonic adaptation – if we and everyone we know drives an expensive foreign car and lives in a swanky neighborhood, this becomes our norm. Hedonic adaptation creates a consumer baseline, and purchases have to meet or exceed it in order to get the limbic status reaction we crave. As our stuff and our status rise in value, our expectations and wants increase, so we gain no permanent increase in happiness.
To a certain degree, a reality check can bring awareness of what’s driving our consumer decisions. Fisker warns against their baggage:
Knowing that it’s detrimental to make foolish comparisons, and also knowing that we’re hard-wired to make them all the time, means a host of associated problems: we’re comparing our worst with someone else’s best, we’re choosing the wrong value system for the comparisons, and we’re focusing on what others are doing, not what we can do. In Stop Comparing Your Life. Start Living It, Joshua Becker advises intentional, quiet moments spent reflecting on who we are and who we want to become. From this reality check, our spending can become less reactive and more in line with our core values. The result is a happier, more focused contentment.
Andy Kessler, writing in the Wall Street Journal on The Rise of Consumption Equality, thinks this is a huge opportunity to break through convention:
Performing your own reality check and making more intentional spending decisions without linking emotional expectations with them can lead to greater fulfillment. Using Andy’s definition, how rich are you?
- John Tropea: The story of the cortex and the limbic (johntropea.tumblr.com)
- A Reality Check Delivers Career Solutions (passingthru.com)
- Getting Real: How an Honest Reality Check will Improve Your Life (passingthru.com)