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Spending Money is a Choice

Spending MoneyIn a fun way, the behavior in the video below touches on the mentality behind why so many people have such a difficult time-saving and such an easy time spending money. The question is, why do we behave this way?

Certainly the prevalence of advertising plays a role. It’s not difficult to find the latest and greatest gadget. We’re inundated with product advertising everywhere we look. Watch television and you can’t help but get hit with commercials for cell phones, cars, just about anything you could possibly want.

But advertising is only effective when it targets an existing bias. The stronger the bias, the more effective the advertising.

Take a look at the video and then read on to discuss the different biases we have toward spending money.


Spending Money Biases

More is better than less. Why buy one item, when you can have two for the price of one? My parents grew up with one television in the house. Now most households have televisions in every room, and even one in the car. We have been conditioned to accept the assumption that more is always better.


More expensive is better than less expensive. Along the same lines, it’s not just that having more stuff is better. Having more expensive stuff is even better. A luxury car is better than an economy car. Our mindset is that if something is more expensive, it must be better. Sometimes that’s the case. And sometimes just because a product is better, doesn’t mean that you actually need the better product.


More stuff equates to more happiness. The more money you make, the happier person you are. Many believe that if they only had a bigger house, a nicer car, or could afford a more expensive vacation then all their problems would magically disappear. This explains why someone is willing to take a higher paying job even though it will be more stressful, require more time away from the family, and make you more miserable.


Spending Money Doesn’t Make You Happy

Compare how you feel after sitting around watching television vs spending the day working outside. That’s the same feeling you get when you spend money expecting to find happiness. Watching television is fun for a while, but in the end you aren’t any better off than before. While working outside leaves you feeling accomplished. It’s also much healthier.

Once you get on this treadmill of wanting more expensive stuff, and spending money to get it, you’ll find it’s never-ending. There is always someone who makes more money. It may be a cliché, but until you realize that more stuff doesn’t buy happiness, you’ll struggle.

Discover the things in life that make you happy and find ways to incorporate more of those things into your life.


Readers, what are some things that make you happy that don’t involve spending money?


Permanent link to this article: http://financialslacker.com/spending-money-choice/


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  1. Finance Solver

    Whoa the video was really impactful. The thing with having nice stuff is, we only focus on what we see and not that we don’t see. We don’t ‘see’ the coffee after it’s in the cup, per se, but we see the cups and that’s what’s displayed for the whole world to see. We see the nice cars and the watches but we don’t see our savings (just numbers in our bank account statements). The effects of visuals on psychology is so interesting!

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    1. Financial Slacker

      That’s what I felt after watching the video as well. The visual is so much more effective than just words.

      We all need to stop worrying so much about the stuff and focus on the living.

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  2. ambertreeleaves

    great video.

    Things I like that do not cost a lot: seeing a great sunset, biking with the kids while they talk about some of their world problems, a good and interesting discussion with someone, a sign of appreciation….

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    1. Financial Slacker

      I love hearing about what’s happening with the kids. There’s nothing like seeing the world through their eyes.

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