How can I Reduce my Compulsive Spending Habits?

Last week I wrote about how a lack of money management predicts individuals’ compulsive spending, regardless of their personality, gender, age, and income. These results were based on a study (Sadness, Identity, and Plastic in Over-shopping) published in the Journal of Economic Psychologywhich was conducted with two students of mine former (Grant Donnelly and Masha Ksendzova).

I received quite a few emails and there were a number of follow-up questions people wanted to ask. So, I decided to ask Masha to answer the top five most popular questions:

Confessions of a Shopaholic

What drives materialists to buy compulsively? Our study suggests that materialists are more likely to be compulsive buyers (although not all compulsive buyers are necessarily materialists) because they don’t manage their credit as well as general consumers, believe that purchases will transform their lives, and buy for emotional relief. If people are materialistic, it means that they value the acquisition of tangible products and believe those products will bring them happiness. If the same individuals do not regulate their credit use, they loosen the reins on their spending – they can shop as much as they want without a real restraint. If we add retail therapy into the mix, and the promise of a purchase to improve one’s life and self, then we have a recipe for consumer disaster.

Why do shopaholics, as they’ve been called, overspend? If we’re talking about compulsive buyers, the ones who suffer terrible financial and emotional consequences from their shopping behavior, then most researchers will tell you that these individuals shop in reponse to negative emotions or negative awareness of the self. Shopping is something to do, but it is mindless. It is engaging mentally, but requires little effort. If people value material possessions, the idea of going to the mall over doing something else is more likely to pop up in their minds at the moment of low self-esteem. If these people have credit cards and are too focused on the promise of their purchases instead of future financial consequences, they can get engage in out-of-control spending. With a slide of a credit card and delayed payment, we don’t experience the same psychological impact of parting with money – we get excited about a purchase now, face the pain of acknowledging our spending behavior later, and don’t learn as well from this cause-and-effect relationship. Some people value material things, and they take this value to the extreme when they have the right tools.

What role do credit cards play in compulsive buying? With a slide of a credit card and delayed payment, we don’t experience the same psychological impact of parting with money – we get excited about a purchase now, face the pain of acknowledging our spending behavior later, and don’t learn as well from this cause-and-effect relationship. Credit cards get rid of restraints, both of actual money and our psychological discomfort of spending it. When we handle cash, we physically part with it, and our awareness of spending money increases. The consequence is immediate. When we use a debit card, we can think of our balance dropping to an eventual zero – there is a real bottom to hit. When we slide the credit card, we can delay the consequences – we can stick our heads in the sand like ostriches. 

Does bad credit management come from ignorance or is it intentional? It is somewhat intentional ignorance. Rationally speaking,  people who value possessions should be MOST concerned with managing their money for one simple reason – with better financial standing, they can buy more! However, they would have to pace themselves and buy less first. This behavior doesn’t mix well with the frantic desire for a quick fix of identity and emotion in the now. However, because some individuals really value money, they have trouble facing the fact that they’re not spending it wisely or that they just don’t have it. There’s something in psychology called “the ostrich effect,” and it suggests we pay more attention to good information and try to limit our awareness of the bad. We also call it “the pain of knowing,” which may be so debilitating that individuals would rather ignore their debts than face them. When the overspending is extreme enough to be considered compulsive buying, individuals experience a great deal of guilt and sometimes go as far as hiding their purchases out of sight. These individuals understand there is something wrong with their behavior, but may be too scared  to face reality, and “sticking their heads in the sand” only perpetuates the problem.

What can be done to help with compulsive spending habits? If someone fills out a clinical screener and turns out to be a compulsive buyer instead of a casual overspender, then counselling and professional help. Most often, compulsive buyers experience a great deal of negative emotion, and the actual shopping isn’t the root of their problem. That’s where therapy comes in. If people just want to spend money more wisely, we urge them to shop using cash or at least debit, not to buy immediately (instead, take a break between deciding on a purchase and actually getting it, walk around the store or save the page if shopping online), and question their motivations – will this item really make you happier, make people like you better, and make you feel more self-confident, or is it just something the media wants you to think? Do you really need it?

At BeyondThePurchase.Org we help people make the connection between their spending habits – how do you spend your money and who do you spend it on – and their happiness. To learn about what might be influencing how you think about and spend your money, Login or Register with Beyond The Purchase, then take a few of our spending habits quizzes:

How do your current priorities impact what you buy? Take our Life Goals and Buying Choices and on your feedback page you will learn you will learn how current priorities impact what you buy.

How does your expected happiness impact what you buy? Take our Forecasting your Happiness and on your feedback page you will learn if happiness matters more when you are buying a life experiences or a material item.

How materialistic are you? Find out by taking the Materialistic Values Scale.

Are you a compulsive buyer? Take the Compulsive Buying Scale and learn about your spending habits.

With these insights, you can better understand the ways in which your financial decisions affect your happiness.

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The Billionaire’s Brain: Do You Have One?

This week I am posting a guest blog by Dr. Daniel Crosby.

I’m convinced that one secret of Warren Buffett’s enduring popularity is his “everyman-ness.” While “The Oracle” is insanely wealthy, he is also grounded and approachable which makes replicating what he has done seem almost doable for regular schlubs like you or I. Buffett famously said of intelligence and investment success, ”You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.” But is he right? Are billionaires really just ordinary folks or do their brains operate in a more rarified way?

Luckily for us, Jonathan Wai, a research scientist at Duke set out to answer this very question. Wai found that about 45 percent of billionaires were in the top one percent of cognitive ability, beating out Senators (41%), Fortune 500 CEOs (38.6 percent) and especially those dummies in the House of Representatives (21%). But despite the overall braininess of the ultra-wealthy, many other factors certainly play in, factors like work ethic, privilege, discipline and luck. So, assuming a big brain isn’t all it takes to make the Forbes 400, what are some of the behavioral attributes of the Warren Buffett’s of the world that make them so successful.

To name a few, they are:

A contrarian mind – Buffett is what is referred to as a “value investor”, one who buys stocks that others have discarded for not being sufficiently glamorous. While most of us run out of the market just as stocks are going on sale, two prominent billionaires, Buffett and Sir John Templeton made their fortunes taking a different tack. Buffett’s advice in this respect was to, “Be fearful when others are greedy and greedy when others are fearful” whereas Sir John counseled that, “The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” In both cases, their fortunes were made not necessarily by smarts, but by swimming upstream.

A patient mind – As a human race, we are prone to “present bias” or to use the psychobabble term, “hyperbolic discounting.” The present reality tends to win out over a desired future reality, since our future selves are experiences as being less real. Consider every diet you’ve ever been on (if you’re like me). You have an idealized vision of your future self, one with better abs and at least one fewer chin, but your present bias keeps getting in the way. That future self lives somewhere in the ether, but those cookies?! Those sweet, buttery cookies? They are here right now. This sort of impatience leads us to make easy decisions now that don’t serve the wealth building efforts of our future self. Billionaire hedge fund manager Ray Dalio and media mogul Oprah Winfrey both practice meditation as a means of fine-tuning the wealth building competence of patience.

A simple mind – Excuse me? A simple mind? Before you accuse me of calling the 1% of the 1% simple-minded, let me elaborate. Consider some of the highest profile billionaires around and how they made their fortunes. Mark Zuckerberg got rich helping us connect more effortlessly. Steve Jobs made his billions by streamlining the personal computing experience. Sam Walton spawned a family fortune by putting everything you need under one roof at a low price. I have no doubt that each of these individuals are bright or that there is true genius in making the complex seem simple. But in each case, the brilliance of their discovery was how commonplace it looked after the fact. With 20/20 hindsight we shake our heads and ask, “Why didn’t I think of that?” Rather than complicating something for its own sake, or out of some sense of intellectual showmanship, these three made it big by making it easy.

It may be the case that you have the kind of intellect that can propel you to fortune and fame. But if not, perhaps being a plodding, simple-minded contrarian will do the trick just as nicely.

At BeyondThePurchase.Org we help people make the connection between their spending habits – how do you spend your money and who do you spend it on – and their happiness. To learn about what might be influencing how you think about and spend your money, Login or Register with Beyond The Purchase, then take a few of our spending habits quizzes:

How do your current priorities impact what you buy? Take our Life Goals and Buying Choices and on your feedback page you will learn you will learn how current priorities impact what you buy.

How does your expected happiness impact what you buy? Take our Forecasting your Happiness and on your feedback page you will learn if happiness matters more when you are buying a life experiences or a material item.

Which spending decisions will make you happiest? Take our Spending Choices and Happiness survey and on your feedback page you will learn how to spend your money to be happier.

How happy are you these days? Take our Happiness and Life Satisfaction quiz and find out your happiness score.

How materialistic are you? Find out by taking the Materialistic Values Scale.

Are you a compulsive buyer? Take the Compulsive Buying Scale and learn about your spending habits.

With these insights, you can better understand the ways in which your financial decisions affect your happiness.

Educated at Brigham Young and Emory Universities, Dr. Daniel Crosby is a psychologist and behavioral finance expert who helps organizations understand the intersection of mind and markets. His clients include Brinker Capital, Morgan Stanley, RS Funds, Guardian Life Insurance and NASA. Dr. Crosby’s well-reviewed book, “You’re Not That Great” applies elements of behavioral finance such as loss aversion and availability heuristic to the pursuit of a meaningful life. You can follow Dr. Crosby (@incblot) on Twitter.

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Why Do Shopping Addicts Keep Spending Their Money?

Did you know that approximately 10 percent of adults in western countries are believed to have a compulsive spending disorder? Their spending habits lead them to lose control over their buying behavior, and this trend is on the rise. Interestingly, these shopaholics are addicted to buying things, regardless of whether they want or need them.

Am I a compulsive buyer?Importantly, compulsive consumption, or chronic and repetitive purchasing that is accompanied by a loss of control over buying behavior, results in continued shopping despite numerous harmful emotional, social, and financial consequences. Specifically, compulsive buying often contributes to debt, guilt and disappointment with self, and worsening social relationships.

So, why do shopping addicts, or compulsive buyers, keep spending their money even in the face of harmful financial, emotional, and social consequences?

We wondered the same questions, and so my students and I conducted four studies to answer this question. We surveyed more than 1,600 adults who answered questions about their money management, shopping habits, and how much they value material possessions. What we learned is that compulsive buying is fueled by poor credit management and a belief that new purchases will create a happier life.

In sum, our results showed that a lack of money management predicted individuals’ compulsive spending, regardless of their personality, gender, age, and income. In particular, out-of-control-shopping was primarily driven by poor credit management, such as not paying attention to credit card statements, not paying credit card bills on time, and exceeding credit limits. Compulsive shoppers reported that they bought items to get a buzz or put themselves in a better mood. They also believed the purchases could change their life, for example by transforming their appearance, self-confidence, reputation, and relationships.

Our result demonstrated that compulsive shoppers tend to be people who bury their head in the sand and ignore credit card bills, as we found that these individuals keep on buying because they are looking for that “buy high.” We think that one possible reason why credit cards may facilitate compulsive shopping is because they allow consumers to separate the pleasure of buying from the pain of paying.

So is there any hope? Yes.

While we know that a person’s values impact their shopping habits, values aren’t the easiest thing to change. However, our statistical models showed that, even if you are materialistic and you have the desire to acquire more possessions, it’s how you manage your behavior that counts. Our findings suggest that you can keep your shopping under control by paying attention to your credit cards and checking in with yourself about whether you are shopping for emotional reasons.

At BeyondThePurchase.Org we help people understand the relationship between money and happiness. To learn about what might be influencing how you spend your money, register with Beyond The Purchase and then take a few of our happiness quizzesconsumer psychology surveys, and personality tests. After each quiz, we will provide you with personalized feedback and graphics as well as practical happiness tips so you can will learn about how you can make little changes to be happier.

Is shopping an addiction for you? Take the compulsive buying scale and learn about your spending habits. We think you may learn a lot about what causes you to part with your hard-earned money.

With these insights, you can better understand the ways in which your financial decisions affect your happiness. Responses to these surveys will also help researchers further understand the connection between money and happiness.

“Sadness, Identity, and Plastic in Over-shopping: The Interplay of Materialism, Poor Credit Management, and Emotional Buying Motives in Predicting Compulsive Buying,” was published in the Journal of Economic Psychology. I co-authored the paper with former SF State graduate student Grant Donnelly and undergraduate student Masha Ksendzova.

 

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Are You a Happy Shopper? Research Website Helps You Find out

Psychologists have found that buying life experiences makes people happier than buying possessions, but who spends more of their spare cash on experiences? We now know that extraverts and people who are open to new experiences tend to spend more of their disposable income on experiences, such as concert tickets or a weekend away, rather than hitting the mall for material items.

In a recent study, we examined the responses of people who completed online questionnaires about their shopping habits, personality traits, values and life satisfaction. These habitual “experiential shoppers” reap long-term benefits from their spending: They reported greater happiness.

While these data show that being an ‘experience shopper’ is linked to greater happiness, we wanted to find out why some people gravitate toward buying experiences.

Participants’ personality was measured using the “Big Five” personality traits model, a scale psychologists use to describe how extraverted, neurotic, open, conscientious and agreeable a person is. People who spent most of their disposable income on experiences scored highly on the “extravert” and “openness to new experience” scales.

This personality profile makes sense since life experiences are inherently more social, and they also contain an element of risk. If you try a new experience that you don’t like, you can’t return it to the store for a refund.

Also, we believe that it could be easier to change your spending habits than your personality traits. Even for people who naturally find themselves drawn to material purchases, these results suggest that getting more of a balance between traditional purchases and those that provide you with an experience could lead to greater life satisfaction and happiness.

At BeyondThePurchase.Org we help people understand the relationship between money and happiness. To better understand the benefits of specific consumer choices, we continue to investigate the relationships between consumer preferences, psychological needs, happiness, and values at our website by allowing people to take tests on personality. To learn about what might be influencing how you think about and spend your money, register with Beyond The Purchase, then take a few of our personality quizzes:

Which spending decisions will make you happiest? Take our Spending Choices and Happiness survey and on your feedback page you will learn how to spend your money to be happier.

With these insights, you can better understand the ways in which your financial decisions affect your happiness. Responses to these surveys will also help researchers further understand the connection between money and happiness.

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How to Negotiate a Higher Salary

How to Negotiate a Higher Salary

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What Is the Best Way to Spend $100?

As you probably know if you if have read this blog, many recent studies focused on the relationship between money and happiness have shown that individuals who purchase life experiences are generally happier than individuals who purchase material items. However, not all life experiences are created equal. My lab and I were interested in the most popular life experiences.

So, as part of an ongoing investigation into the types of life experiences that people like and dislike, we asked members of the BeyondThePurchase.org community to identify the types of experiences that they felt were most (and least) appealing.

After obtaining our survey results, we then teamed up with the people over at Ranker.com (who collect data through the crowdsourcing), to see if our findings would replicate. We asked visitors to Ranker to answer the question “What is the best way to spend $100?”

This consistency of the results was incredible. We found that data collected via these two very different websites was nearly identical to data collected through traditional online sources. Most importantly, the top five most preferred experiences on BeyondThePurchase matched the top five ranked experiences on Ranker exactly. When rating or ranking life experiences, the top five choices found in both studies were:

1. Traveling
2. A Dining Experience
3. A Concert
4. Museums
5. Massage

A similar, though not quite identical, pattern was found for the least popular experiences. Listed below are the lowest ranking experiences on Ranker, with the BeyondThePurchase rankings in parentheses:

1. Hunting (Last)
2. Manicure (Middle)
3. Golfing (Second to Last)
4. The Opera (Middle)
5. Bungee-jumping (Third to Last)

I asked my students what they thought of these results and one of them had a really interesting quote.

“With crowdsourcing becoming increasingly common, it is important to evaluate the quality of this data, as compared to traditional research methods,” said Graham Hill, community manager of BeyondThePurchase.org. “Our research indicates that crowdsourcing may offer a convenient and scientifically valid method for organizations to study consumer psychology.”

At BeyondThePurchase.Org we help people understand the relationship between money and happiness. To better understand the benefits of specific consumer choices, we continue to investigate the relationships between consumer preferences, psychological needs, happiness, and values at our website by allowing people to take tests on personality. To learn about what might be influencing how you think about and spend your money, register with Beyond The Purchase, then take a few of our personality quizzes:

Can money buy happiness? Take our experiential buying survey and on your feedback page you will learn how to spend your money to be happier.

Which spending decisions will make you happiest? Take our Spending Choices and Happiness survey and on your feedback page you will learn how to spend your money to be happier.

With these insights, you can better understand the ways in which your financial decisions affect your happiness. Responses to these surveys will also help researchers further understand the connection between money and happiness.

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If You’re Happy and You Know It, Check Your Text

I have been asking people to tell me about their happiness since 2003. It is a fun topic to talk about; sometimes I find that people don’t often think much about their own well-being. However, there was one question that a number of people asked me that I didn’t have an answer for: “is thinking about my happiness actually good for me?” In other words, should you constantly be thinking if you are happy or not. Until recently, I would always say “I don’t know.”

That was, until a recent study examined this issue.

In a fascinating study, Effects of Intensive Mobile Happiness Reporting in Daily Life, Tamlin Conner and Katie Reid asked people to rate their happiness 1, 3, or 6 times a day. They concluded that people with a pre-disposition to depression felt less happy as a result of reporting their happiness compared to individuals with no pre-disposition to depression, who felt happier as a result of reporting on their happiness. Thus, using mobile technology to track one’s mood may actually affected individuals’ moods over time.

Why is this?

It is possible that individuals without a pre-disposition to depression felt that the daily updates were a positive interaction and they expected positive feedback. Whereas people with a pre-disposition to depression, the text message updates increased their self-awareness, which was already high, and had a negative effect on their self-evaluation of their happiness.

So what’s the takeaway? Using mobile technology to evaluate your mood may actually increase your happiness overall–but only if you are not pre-disposed to depression.

This also made me think of the many websites that provide you with personalized feedback about your attitudes, behaviors, and emotions. Specifically, I helped co-found a website that provides individuals with a variety of online quizzes to help them learn more about themself as an individual and as a consumer. When people see the results of our surveys, they have an improved awareness of their personality and values, as well as how their decisions as a consumer are impacting their happiness in the short- and long-term.

For example, it turns out that living in the moment may make us feel happier in the short-term but may negatively impact our finances in the future, causing less happiness or satisfaction in the long-term. So when people take the Zimbardo Time Perspective Inventory or the Material Values Scale from Beyond the Purchase they learn how their time perspectives affect their decisions. We tell people how living in the moment doesn’t always translate into greater happiness in the long-term because of its financial impact. Hey, if it’s a carpe diem perspective that’s driving your daily actions, you may feel more highs but the impact on your finances may cause more lows down the road. In addition, when a person takes the experiential buying survey we provide ways for them to improve their ROI in consumer spending so they get more satisfaction and happiness out of their purchasing.

I have told people that instead of going to see an expensive financial planner, quizzes such as these will help them understand what is impacting their consumer-spending behaviors. These tools are a great way to learn more about yourself while also empowering you to use your spending power to enhance your happiness.

But, the results by Conner and Reid have challenge me a bit. It might be that self-awareness only has a positive impact on some people. I am left to wonder how the quantified self movement impacts people who are already depressed.

In today’s highly networked world of multiple mobile applications and a perpetual on-line mode of living, you can use technology like Beyond the Purchase to gain self-awareness, which, and, I hope, this awareness helps you to make buying choices that improve your overall happiness — for your lifetime, not just for today. However, in the future we want to examine how our feedback has an impact on all people’s happiness.

Kristen Gramigna is Chief Marketing Officer for BluePay, a merchant service provider, contributed significantly to this blog entry. She brings more than 15 years of experience in the bankcard industry in direct sales, sales management, and marketing to the company and also serves on its Board of Directors.

 

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The Costs and Benefits of “Living for Now”

Psychologists describe people who focus attention on the activities and events happening in the present as having a present hedonistic time perspective. We were interested in identifying the costs and benefits of “living for now.” In this study we measured people’s time perspectives, money management skills, tendency to experience positive emotions, and personality factors. Results indicated that focusing on the present has positive impacts on emotions; however, this hedonistic time orientation may come at a cost to your bank account.

Benefit: People who have present hedonistic time perspectives experience the positive emotions joy, love, amusement, and compassion more frequently. Research has shown that focusing on the past reduces the frequency of positive emotions and compassion for others. To be happier and experience more positive emotions, you can focus on the present more by savoring the experiences you have and enjoying them thoroughly.

Benefit: If you take a present hedonistic time perspective, you tend to value stimulation in your life, and probably agree with statements like “change is good” and “whatever the challenge, bring it on.” The benefit of having these perspectives is intuitive; life is consistently changing and providing new challenges, so being able to adjust to these novelties comes in handy.

Benefit: A present hedonistic time perspective can affect your social life as well. People who focus on the now are more likely to be extraverted, active, and high-spirited. Research has shown that extraverted individuals tend to be happier than introverts.

Cost: “Living for now” can have detrimental effects on your bank account. Those who have a present hedonistic time perspective report weaker desires to save money. Research has suggested that individuals who score higher on savings management tend to feel more financially secure and are more satisfied with their lives. Focusing on the present is a great way to increase positive emotion and social connections, but it should be balanced with a conscious awareness of the finances being used in the moment as well.

Cost: People who live in the now are also less likely to have financial clarity. This means they are less likely to know how much money they have, what they owe, and know how much to plan for future events. Research has suggested that individuals who don’t manage their money well are more likely to make compulsive and impulsive purchases, have less savings, more debt and are less satisfied with their lives.

At BeyondThePurchase.Org we help people understand the relationship between money and happiness. To better understand the benefits of specific consumer choices, we continue to investigate the relationships between consumer preferences, psychological needs, happiness, and values at our website by allowing people to take tests on personality. To learn about what might be influencing how you think about and spend your money, register with Beyond The Purchase, then take a few of our personality quizzes:

Do you tend to make decisions considering the past, future, or more immediate needs? Take the Zimbardo Time Perspective Inventory and learn how time perspectives have been linked to a wide variety of human behaviors.

How materialistic are you? Take the Material Values Scale and learn about your spending habits. We think you may learn a lot about what causes you to part with your hard-earned money.

Can money buy happiness? Take our experiential buying survey and on your feedback page you will learn how to spend your money to be happier.

Which spending decisions will make you happiest? Take our Spending Choices and Happiness survey and on your feedback page you will learn how to spend your money to be happier.

How happy are you these days? Take our Happiness and Life Satisfaction quiz and find out your happiness score.

Are you a compulsive buyer? Take the Compulsive Buying Scale and learn about your spending habits.

In what ways do you hope your purchases will transform your life? The Transformation Expectations Questionnaire will tell you about what you expect from your next big purchase.

With these insights, you can better understand the ways in which your financial decisions affect your happiness. Responses to these surveys will also help researchers further understand the connection between money and happiness. To read more about the connection between money and happiness, go to the Beyond the Purchase blog.

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You are Not That Great

This is a guest blog by Dr. Daniel Crosby

You’re not that great. Yes, you read that right. Wait a minute, you think, “this must be about that extra fifteen pounds I’m carrying around.” Nope. “Well, maybe it’s because I always seem to quit on my New Year’s resolutions in the first two weeks.” Wrong again. “Wait a minute, how does he know about the time I swore at my teacher under my breath?” I wish it were that insignificant a problem.

No, the reason you’re not great is much deeper than all the sins of commission you could recall. Your problem is far more pervasive. Your problem is one that you’re less aware of and is far more insidious than anything you’ve ever consciously done. Your problem is one you likely never even knew you had.

You see, for far too long, we’ve assumed greatness. We’ve all wanted to take the mantle of “special” upon us, but haven’t wanted to do the hard work that accompanies it. Even more damaging, we’ve put ourselves on autopilot because we’re tired. The long hours, the commute, the t-ball games, the ornery bosses, all of it just wears. us. out. But being great has and always will take effort. Intentional effort. Our natural tendency is to choose the path of least resistance, to not rock the boat and to worry more about not screwing up than being exceptional.

You're Not That Great:

Click on the image to watch Daniel Crosby's TEDxHuntsville motivational speech.

But maybe, just maybe, if you’ll consider the seven counter intuitive truths in this video, you’ll start to make changes. Small changes at first, but changes that push you to be more aware and more alive. So, today, you’re not that great, but it’s not because there is no greatness within you. Living a great life is fundamentally about scraping away all of the bad lessons and fallacious visions of happiness you’ve been sold. It’s about realizing that the less you need to be special, the more special you’ll become. It’s about realizing that greatness isn’t achieved at the top of the mountain, but at every rest stop and slip-up along the way. Most of all, it’s about realizing that what makes you unique can’t be bought, earned, or accomplished. It can only be unearthed as you have the personal courage to admit that you’re pretty average, and in so doing, put yourself on the path to becoming so much more.

At BeyondThePurchase.Org we help people understand the relationship between money and happiness. To learn about what might be influencing how you think about and spend your money, register with Beyond The Purchase, then take a few of our personality quizzes:

Can money buy happiness? Take our experiential buying survey and on your feedback page you will learn how to spend your money to be happier.

How do you find happiness? Take our happiness quiz and find out your happiness score.

How materialistic are you? Take the Material Values Scale and learn about your spending habits. We think you may learn a lot about what causes you to part with your hard-earned money.

Educated at Brigham Young and Emory Universities, Dr. Daniel Crosby is a psychologist and behavioral finance expert who helps organizations understand the intersection of mind and markets. His clients include Brinker Capital, Morgan Stanley, RS Funds, Guardian Life Insurance and NASA. Dr. Crosby’s well-reviewed book, “You’re Not That Great” applies elements of behavioral finance such as loss aversion and availability heuristic to the pursuit of a meaningful life. You can follow Dr. Crosby (@incblot) on Twitter.

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Money and Happiness: The Costs and Benefits of Living for Now

Time Perspective Zimbardo

A New Study by BeyondThePurchase.org Explores the Link between Money and Happiness—Reports Costs and Benefits of “Living for Now”

Psychologists describe people who focus attention on the activities and events happening in the present as having a present hedonistic time perspective. We were interested in identifying the costs and benefits of “living for now.” In this study we measured people’s time perspectives, money management skills, tendency to experience positive emotions, and personality factors. Results indicated that focusing on the present has positive impacts on emotions; however, this time orientation may come at a cost to your bank account.

Benefit: People who have present hedonistic time perspectives experience the positive emotions joy, love, amusement, and compassion more frequently. Research has shown that focusing on the past reduces the frequency of positive emotions and compassion for others. To be happier and experience more positive emotions, you can focus on the present more by savoring the experiences you have and enjoying them thoroughly.

Benefit: If you take a present hedonistic time perspective, you tend to value stimulation in your life, and probably agree with statements like “change is good” and “whatever the challenge, bring it on.” The benefit of having these perspectives is intuitive; life is consistently changing and providing new challenges, so being able to adjust to these novelties comes in handy.

Benefit: A present hedonistic time perspective can affect your social life as well. People who focus on the now are more likely to be extraverted, active, and high-spirited. Research has shown that extraverted individuals tend to be happier than intraverts.

Cost: “Living for now” can have detrimental effects on your bank account. Those who have a present hedonistic time perspective report weaker desires to save money. Research has suggested that individuals who score higher on savings management tend to feel more financially secure and are more satisfied with their lives. Focusing on the present is a great way to increase positive emotion and social connections, but it should be balanced with a conscious awareness of the finances being used in the moment as well.

Cost: People who live in the now are also less likely to have financial clarity. This means they are less likely to know how much money they have, what they owe, and know how much to plan for future events. Research has suggested that individuals who don’t manage their money well are more likely to make compulsive and impulsive purchases, have less savings, more debt, and are less satisfied with their lives.

At BeyondThePurchase.Org we help people understand the relationship between money and happiness. To better understand the benefits of specific consumer choices, we continue to investigate the relationships between consumer preferences, psychological needs, happiness, and values at our website by allowing people to take tests on personality. To learn about what might be influencing how you think about and spend your money, register with Beyond The Purchase, then take a few of our personality quizzes:

Do you tend to make decisions considering the past, future, or more immediate needs? Take the Zimbardo Time Perspective Inventory and learn how time perspectives have been linked to a wide variety of human behaviors.

How materialistic are you? Take the Material Values Scale and learn about your spending habits. We think you may learn a lot about what causes you to part with your hard-earned money.

Can money buy happiness? Take our experiential buying survey and on your feedback page you will learn how to spend your money to be happier.

Which spending decisions will make you happiest? Take our Spending Choices and Happiness survey and on your feedback page you will learn how to spend your money to be happier.

How happy are you these days? Take our Happiness and Life Satisfaction quiz and find out your happiness score.

Are you a compulsive buyer? Take the Compulsive Buying Scale and learn about your spending habits.

In what ways do you hope your purchases will transform your life? The Transformation Expectations Questionnaire will tell you about what you expect from your next big purchase.

With these insights, you can better understand the ways in which your financial decisions affect your happiness. Responses to these surveys will also help researchers further understand the connection between money and happiness.

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