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With interest rates continuing to rise, inflation at its highest level in 40 years, and student debt soaring, there are plenty of reasons to be nervous about your finances. But here’s some information that might make it easier to cut back on your spending: According to a recent study by Duke University’s Fuqua School of Business, people are actually less satisfied with the purchases they make when they’re feeling financial stress.
Why? “This sense of financial strain causes people to rethink their purchase and think about what else they could have done with that money, also known as the ‘opportunity cost’,” Gavan told the Journal. Fitzsimons, a marketing professor at Fuqua and co-author of the findings. of consumer research. Thus, “every time they think about this purchase, they will be less satisfied with what they ended up buying”.
And that was true that people buy things or experiences, regardless of cost, according to “Spending and Happiness” research by Fitzsimons and his team.
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Financial stress makes you less satisfied with what you buy
People in financial difficulty are “more likely to buy things for [try and] improve their happiness,” Rodrigo Dias, Fuqua’s PhD candidate and one of the co-authors of the research paper, told Fuqua, “but our research shows that exactly the opposite is happening.”
The disconnect is that, “as a society, we’ve fallen into this trap where we believe that material possessions are going to make us feel better,” Fitzsimons told Select. But the truth is, the excitement of buying new things fades as we get used to a purchase — “we don’t fully realize how quickly we adapt,” says Fitzsimons.
Fitzsimons adds that in the past 50 years, American consumers haven’t been any happier. In fact, the consumer misery rises regardless of income level. And with the results of Duke’s new research, he’s not sure that will change any time soon: “Everyone feels [financially] compelled,” he says. “I’m not sure it’s temporary.
How to maximize the emotional value of your purchases
Fortunately, according to Duke researchers, there’s a way to maximize the emotional value you get from buying something when you’re financially stressed: Plan the purchase.
Since opportunity cost is a reason for dampened “purchasing happiness” among financially stressed people, it helps when shoppers are “already thinking about possible alternatives for how they might have spent that money,” Fitzsimons said. .
A good way to plan is to shop around for the best deal. If you’re looking to buy a new TV, for example, start searching online at local retailer websites as well as other shopping sites like Amazon. If you have access to wholesale stores such as Costco, BJ’s, or Sam’s Club, consider shopping there for additional savings. Also worth mentioning is searching the Facebook Marketplace to find a used unit in your area.
Once you’ve figured out exactly where you’re going to buy an item, how you pay for it can also make a difference.
You can, for example, consider purchasing that new TV with a cash back credit card such as Chase Freedom Unlimited® to reap further rewards and use additional benefits, including extended warranty and product protection. purchases.
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Foreign transaction fees
Information about Rakuten was independently collected by Select and was not reviewed or provided by the company prior to publication.
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Get cash back on qualifying purchases, automatic coupons and price comparisons.
How to use it
Buy from Rakuten.com, the Rakuten app or install the browser extension.
How to receive your savings
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Or maybe you just decide not to buy. Instead of buying a new iPhone as soon as it’s released, try diverting that money to your emergency fund or a tax-efficient Roth IRA retirement account instead.
At the end of the line
Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.