If you want to break bad spending habits, you need to understand what is causing you to act that way in the first place. That will allow you to really correct the habit that is causing you some form of financial difficulty.
Living in a consumerist society like in America, correcting bad spending habits is easier said than done. That is why you need to find out things like the philosophy behind your spending style. If it turns out that your style is defective by itself, then you know the root cause of your problem. You can choose to change the way you spend so you can develop better purchasing habits.
There is an interesting article on the HuffingtonPost.com that is written by an 18 year old teenager who grew up in Pakistan. According to the author, Shanzeh Khurram, The American Dream is “always a bit materialistic.” She said that she sees the nation buying a lot of unnecessary purchases. It started with a home and a car – which are necessities. Now, it has grown to include an iPhone, designer items and other expensive stuff that are extravagant.
The acquisition of these things have become a need simply because Americans are trying to live up to a lifestyle that they cannot afford. It is a lifestyle that society itself have set. While buying things in a consumerist society is deemed normal, it is oftentimes destructive – especially when consumers start to borrow money just to buy these products.
Explaining the different styles of spending: things vs experiences
The spending style of consumers are categorized into two: materialism and experientialism. These two will define what influences you to spend your money. On one side, you are influenced by the product that you will pay for. On the other side, your spending is influenced by the experience that you will get from the product.
Let us try to define and explain further what both of them mean based on the Merriam-Webster.com definition.
Based on the online dictionary, this is “a way of thinking that gives too much importance to material possessions.” The philosophy explains that consumers buy things just for the sake of owning them. This is actually what consumerism wants. Those who practice this type of spending style think that they need to get the most expensive and the most flashy of the products in the market. They get satisfaction from the more expensive items because they associate value with the price tag.
This is the mentality that will breed habits that will make you a financial failure. If you continue with this way of thinking, you will end up with a lot of possessions that cost a lot, but you will get tired of easily. Before long, what you thought was valuable just ends up as junk and clutter in your home.
According to the online dictionary definition, this is “a philosophical theory that experience is the source of all knowledge.” If materialism gives importance to the thing being bought, experientialism gives importance to the experience that goes along with it – rather than the product itself. Simply put, you buy things so you can enjoy it and derive a meaningful experience from it.
This is how people can break free from the grip of consumerism. Since you are concentrated on the experience that is associated with a product, the price and the brand will not matter to you. You will not be compelled to buy designer products and sometimes, the cheaper products will suffice for you to feel satisfied.
Comparing the two, you know that the latter, experientialism, is the better spending style simply because you can opt to spend less and still feel good about your purchase. Between a $200 and a $50 pair of jeans, you have no problems paying for the latter because you are after the use of the product and not the price. A materialistic person will choose the more expensive item because they will feel that it is the more valuable of the two. By choosing to value the experience more than the value you can make smarter spending choices that will keep you from overspending.
Between the two, what spending style can you identify yourself with?
What purchasing behavior will make you happier?
If you want to be a financial success, you may want to choose the right spending style that will lead you there. As much as you want to put your finances in order, you want to make sure that you will end up happy too. Restricting yourself from spending is not how you will find financial happiness. You need to understand how you can utilize your spending so it will give you the most satisfaction.
A lot studies have been done to compare what gives the consumer a higher happiness level – materialism or experientialism. In one study, authored by Leaf Van Boven for the University of Colorado and published on Colorado.edu, it is revealed that the latter make people happier because of three factors.
“Experiences are more open to positive reinterpretations.”
Material things are tangible and something that you can never alter. The more you look at it, the more it becomes ordinary to you. When you are basing your satisfaction on experiences, this is purely a mental recollection. In most cases, what we remember is intensified by the emotions associated with it. So when an experience makes you feel happy, your recollection of that will intensify and thus making the memory all the more satisfactory.
“Experiences are less prone to disadvantageous comparisons.”
Since your eyes are focused on the experience, you will hardly find that the lower price of a product will bring your satisfaction level down when it is compared to a higher priced item. Your experience, being secure in your mind, is protected from any comparison. In fact, given the first factor that we have discussed, you can assume that our mind is powerful enough to make our experience seem superior to any other comparison.
“Experiences are more likely to foster successful social relationships.”
In most cases, experiences are shared with other people. That is what boosts the happiness level of people when they prefer experientialism. Although material things can be shared, it is the experience that is brought about by that sharing that makes a huge difference. It is what makes the spending style all the more pleasant.
Think about it. When you buy stuff, you will get bored with it eventually. But when you store the experience associated with it, your memory of the product will only get better as you recall it again and again.
In the end, you know that it is a win-win situation if you choose to change your mindset to experientialism. It may be tough in the consumerist society that we live in but you know that it is the better choice. The key is to focus on the life experiences that you will get from every purchase.
Whenever you are faced with a spending decision, think about what experience this will give you and how you can share it with your peers. It allows you to go beyond the question of “what will this product bring to my life?” It can also make you ask the second question of “how can I achieve the same experience but for a lesser price?” Materialism will only focus on the first while experientialism will proceed to ask the next question.