With holiday shopping underway, it’s time to face the age-old question: Are you a tightwad or a spendthrift? Researchers keen to figure out why people behave as they do when it comes to spending money have devised the “Spendthrift-Tightwad” scale to compare those who spend more than they would like (spendthrifts) and those who spend less than they would like (tightwads). Actually six out of ten people are neither tightwads nor spendthrifts, but fall in the middle of the spectrum. Researchers label this group of consumers “unconflicted” (which mostly means happier).
Tightwads experience “intense pain at the prospect of spending money,” so they typically underspend. Tightwads outnumber spendthrifts three to two; are more likely to be male than female; older than younger; and be more educated. The “pain of paying” that they feel leads them to end up buying lesser quality items or passing up on indulging themselves. Result: they tend to be grumpy. Spendthrifts, however, don’t feel enough distress at the prospect of spending and thus overspend, paying more than they intend to. Being less sensitive to price, they tend to focus on the pleasure of an anticipated purchase. Result: they tend to be broke.
Researchers used MRI experiments to observe the people’s brains as they performed simulated shopping tasks. They detected when the brain’s “pain centers” or “pleasure centers” “lit up” on scans. They concluded that the “pain of paying” can be lessened in such situations as spending money for gifts during the holidays. For example, it appears that when gift-buying is viewed as a necessity, or seen as an investment in maintaining a relationship, the normal level of pain experienced by the tightwad is overridden.
Related Links
- Tightwads and Spendthrifts
This Web site, devoted to research into “why we want stuff that we don’t need,” examines the tightwad–spendthrift spectrum, including the neurological research.
(American Radio Works; accessed December 1, 2010) - Neither a Tightwad Nor a Spendthrift Be
This brief outline of the differences between tightwads and spendthrifts includes a link to the National Science Foundation Webcast featuring marketing researcher Prof. Scott Rick.
(Smithsonian Magazine, November 24, 2010) - Tightwads and Spendthrifts: A Black Friday Tradition
This article reviews the recent research on spending and shopping habits. Includes video from nsf.gov and links to related articles about consumerism.
(physorg.com, November 17, 2010) - Are You a Tightwad or a Spendthrift? And What Does This Mean for Retailers?
This earlier article explores the research on “the pain of paying”; includes a link to the spendthrift-tightwad (ST-TW) scale, which is a survey you can take to see what kind of consumer you are.
(Source: Wharton, University of Pennsylvania, September 19, 2007)