If you’re someone who gets a kick out of unboxing an expensive item, clipping tags off new clothing, or impulse buying because the deal seems too good to miss out on, try not to feel too bad when those pangs of regret (known as buyer’s remorse) arise.
Retailers, from e-commerce stores to establishments in busy high streets, have spent millions on marketing tricks designed to part you and your money. From appealing to your sense of worth to placing seemingly useful items or snacks by the cash register, sending reminder emails about your abandoned cart and tempting you with bargain basement prices, the fine-tuned tactics are a force to be reckoned with.
Scientific studies tell us that spending money triggers a rush of endorphins and dopamine, the instant gratification creating a momentary feeling of pleasure comparable to a chemical high. Experiencing that sense of delight and excitement is easily triggered again with more purchases, and is enough for some to develop compulsive shopping habits. Things might be changing though…
As consumer behaviours shift and new generations define their own ways of spending money, a study from the University of Arizona found that following a budget, saving money and shopping less left millennials feeling happier and more satisfied with their lives. Better money management meant feelings of depression were less likely to be experienced. According to the survey respondents, consuming less came with a feel-good factor of helping the environment, and saving for a rainy day was equated with peace of mind.
Though we might be saving for a rainy day or a big ticket item, we’re likely to throw caution to the wind when it comes to spending money on others. That’s because it comes with a feel-good factor. Research shows that though it can be costly, what’s known as ‘prosocial’ spending - that is, spending money on others - is paired with mood-boosting feelings of generosity, promoting feelings of responsibility and emotional wellbeing. Charitable giving has a similar effect: a 2010 study found that people feel happier when they give money away, but only when they have the choice of how much to give.
Research shows that consumers spend upward of $5,000 on impulse buys every year, usually food, clothing, household items, and shoes. However, a deep dive into the subject revealed that the urge to spend wasn’t linked to a particular category: the thrill will still be the same regardless of what the money has been spent on. Forming better habits might be key to spending more sensibly.
Recognising that impulse spending is likely to occur at some point, and being well connected with mobile banking or investing apps would allow individuals to snap up a bargain when stock prices dip. This would satiating the need to spend in an intelligent way: the consumer would be investing in something that would boost their financial wellbeing, and not spark feelings of remorse hours later.
Finland, Sweden and Lithuania are recognised for having some of the happiest citizens on earth. While money is a factor that contributes to a sense of worth, satisfaction and overall comfort, an in-depth look reveals that shopping sprees and spending big aren’t the mood-boosters that some people consider them to be.
Finland is the happiest country, according to the 2022 World Happiness Report, and has been for five years in a row. While the results are based on self-perception, Finns say that a strong social support system, healthy life expectancy, absence of corruption in government and business, and the ability to spend time outdoors in nature contribute to their sense of fulfillment.
Retail therapy barely factors into the considerations, and that’s not surprising: Finns practice a minimalism the Nordics are famed for. Decisions around spending money are motivated by how practical and durable an item is, and buying from businesses that keep Finns employed are what generates a buzz for the consumers.
Located just a few hundred kilometers away, neighboring Sweden ranks 7th happiest country in the world. Though the cost of living is high, and winter temperatures can dip as low as -30°C, Swedes count work-life balance as a major reason for feeling happy. Benefits such as five weeks of paid vacations, parental leave and high salaries contribute to being able to live life to its fullest. While money is obviously a factor, it’s not being used for frivolous purchases.
Similar to Finns, Swedes generally don’t derive pleasure from accumulating things. In fact, they’ve coined a term, "köpskam", to refer to the shame associated with shopping, particularly for fast fashion that’s recognised as detrimental to the environment. Buying unnecessary items is frowned upon, giving a boost to thrift shopping and upcycling of clothing items, suggesting that this high level of happiness is derived from sources other than spending.
Sitting 1,000km almost directly south of Finland is Lithuania, the happiest country in the Baltics. Much has been done to improve the livelihood of Lithuania’s citizens: passports were among the world’s most powerful in 2021, corruption was lowering, and the cost of living was kept relatively low. In fact, Mercer’s 2019 Quality of Living City Ranking put Vilnius above the other Baltic capitals, and Business Insider rated the capital #9 in the world for work-life balance, ahead of Brussels and Munich.
Statistics show that Lithuanians living close to the Polish border will cross over into the neighbouring country to find goods at cheaper prices, suggesting that satisfaction is gained from seeking out a bargain, rather than splashing out on big ticket items.
Being aware of the link between spending money and experiencing that high gives us a logical explanation as to why we might be predisposed to purchasing things we don’t really want or need. The great news is that it’s possible to retrain our brains to experience that same feeling when we purchase stocks, invest money or save a little harder. With some determination, we can become addicted to saving, rather than spending.