The psychology behind BIG spending .

I’ve never been a big spender.  I attribute my frugal nature to growing up with parents who weathered a World War and a major economic depression.  My mother washed used aluminum foil to reuse and never bought anything that wasn’t on sale.

It’s fascinating to watch friends splurge on expensive items simply because they want them. And even more fascinating they don’t consider it “splurging”.  The research helps explain what drives people to spend thousands on products and experiences that could cost far less?

 1. Perceived Value & the Placebo Effect

“Research into how cost affects our perceptions shows that price matters so much to our understanding of value that we sometimes rate pricey things as superior or more effective, even if they are the exact same quality as the less expensive option.”

“In one study by The California Institute of Technology (Caltech) and Stanford University scholars, people not only rate the same wine more highly when they’re told it is more expensive, functional magnetic resonance imaging or functional MRI scans taken of their brains while they were drinking the wine suggest participants enjoyed the experience of drinking it more.”

“In another study using placebo pain killers, participants who took a fake pain-killing drug that they were told cost $2.50 per pill experienced more pain reduction during a series of shocks than participants who were told the pill cost only 10 cents.”

2. Searching for Ultimate Experiences

“How does price and perception play into our purchasing decisions outside the laboratory? If an item is twice as expensive, do buyers assume it’s twice as good?”

“Michael Norton, a psychologist and professor of business administration at Harvard Business School says yes. In fact, we may consider the experience to be more than twice as good. We’re motivated to splurge because we’re seeking peak experiences, his research suggests.”

Norton says the same logic can be used to think about why people buy very expensive products or experiences. “There’s an extra boost when you go up in the quality of experiences. So, it’s possible that a $10,000 bottle of whiskey would be more than twice as pleasurable than a $5,000 bottle of whiskey because it’s such a peak experience way out in the extreme.”

By collecting memorable experiences, consumers obtain a sense of accomplishment and progress, and enhance their self-worth.

“We examine why consumers desire unusual and extreme consumption experiences, and voluntarily choose leisure activities, vacations, and celebrations that are unpleasant and even aversive. For example, many consumers choose to stay at freezing ice hotels and eat at restaurants serving peculiar foods, such as bacon ice cream. We demonstrate that such choices are driven by consumers’ striving to use time productively, make progress, and reach accomplishments (i.e., a productivity mindset). We argue that choices of collectable or memorable (unusual, aversive, extreme) experiences lead consumers to feel productive even when they are engaging in leisure activities, as they “check off” items on an “experiential check list” and build their “experiential CV.”Some of us are searching for unique leisure experiences, even when they might be less pleasurable than other options, in order to build their “experiential CV.”  Anat Keinan, Harvard University & Ran Kivetz, Columbia University

3. Flashing the cash

Some people are spending big purely to signal they’re successful. “You might feel like you need to show everyone you’ve ‘arrived’,” 

Economic theory shows demand for some goods increases as their price drops. By contrast, a ‘Veblen good’ is more in demand as its price increases, because of its exclusive and coveted nature.

“There’s a general principle that there’s a social comparison aspect of one-upping other people in our consumption. If I have a nicer bottle of wine (…) than you do then I win, and have shown how high status I am,” Norton says. But he adds people are polarised and often choose to be either extremely conspicuous or extremely inconspicuous to show high status.”

 4. The feel-good factor

And here’s the simplest reason of all: people splurge on luxury goods because they think it will make them happy. Norton, who co-authored Happy Money: The Science of Happier Spending, says that the amount of happiness you get from spending money will depend on how you spend it and not necessarily how much.

Norton says splurging on items for ourselves is finite and doesn’t add up to increases in happiness over time. Instead, he suggests spending money on experiences rather than things. “Most of us seem to be maxed out on the happiness we can get from stuff alone.”

Giving to others seems to add up to happiness over time.

There might be an even better way to get your kicks. Norton’s research proves that giving to others can make us happier people.

“It’s not that when you buy things for yourself they don’t make you happy in the moment. Of course they do. That’s why we buy them. It just doesn’t seem to add up to much happiness over time,” he says. “Giving to others seems to add up to happiness over time.”

Frugal is as Frugal Does

I’ve have always enjoyed giving to others . . . as long as I’ve made it or it’s on sale . . . (jw)


Placebo Effects of Marketing Actions: Consumers May Get What They Pay For.




My daily dose of happy vibes

Even though I grew up in Arizona, where the summer heat can be brutal, I love sunshine.  Perhaps some of my love of being outside is connected to feelings of riding Misty Soda, my first horse, a pale palomino.  After school,  no matter the temperature, I would rush to go riding. Perhaps some of my love of the sun is remembrance of teenage years laying by the pool, getting tan, taking a dip in the cool water and the feeling of water evaporating from my skin.

Riding by Peggy

Research indicates my love of sunshine may be more than just wonderful memory triggers. 

In the top layer of our skin, we have a substance called 7-dehydrocholesterol. Sunlight stimulates the production of vitamin D3 from that substance. Vitamin D3 is then taken to the liver and kidneys to become the most effective form of vitamin D..

Most know that vitamin D is linked to strong bones and teeth.  Less known is research shows vitamin D deficiency also plays a role in some cases of depression, chronic fatigue and an increased tendency to infections.

For those who live in less sunny climates you can get vitamin D from foods too:

  • fish
  • butter
  • milk (especially full cream)
  • fortified margarine
  • breakfast cereals
  • meal replacement shakes.

Vitamin D is fat-soluble – so if you take a vitamin D supplement, eating healthy food with a little bit of fat such as fish, avocado or nuts at the same time.

Beaching it by Peggy

My adult years have been spent in California and my favorite place is the beach.  I know I am always more relaxed and happier when outside – being supercharged with vitamin D from the sun!





How to flip the switch – Shame, guilt and worry

Our brain wants us to feel good but it hasn’t quite figured out how to differentiate “good” feelings from “bad”.  When you feel shame, guilt and worry your brain is trying to reward you by activating its reward center! 

Feel’n Blue by Peggy

When you are being followed by a black cloud, Alex Korb* has some insights that might help you find the sun. It’s all about neuroscience.

According to Korb, “Despite their differences, pride, shame, and guilt all activate similar neural circuits, including the dorsomedial prefrontal cortex, amygdala, insula, and the nucleus accumbens. This explains why it can be so appealing to heap guilt and shame on ourselves — they’re activating the brain’s reward center.“

“A similar thing may be going if you just can’t seem to stop worrying. Korb says worrying stimulates the medial prefrontal cortex and lowers activity in the amygdala, thus helping your limbic system, your emotions, remain copascetic. His theory is that, even though worry is widely recognized as a pointless thing to do from a tactical point of view, apparently the brain considers it better than doing nothing at all when you’re anxious.”

How do you redirect your brain from “rewarding” you with guilt, shame or worry?

“Korb suggests asking yourself: “What am I grateful for?” His reasoning is chemical: “One powerful effect of gratitude is that it can boost serotonin. Trying to think of things you are grateful for forces you to focus on the positive aspects of your life. This simple act increases serotonin production in the anterior cingulate cortex.”

“Even more intriguingly, actually coming up with something you’re thankful for — not always an easy thing to do in a dark mood — isn’t even required. Just the acts of remembering to be thankful is the flexing of a type of emotional intelligence: “One study found that it actually affected neuron density in both the ventromedial and lateral prefrontal cortex. These density changes suggest that as emotional intelligence increases, the neurons in these areas become more efficient. With higher emotional intelligence, it simply takes less effort to be grateful.”

Serotonin Boost by Peggy

We’ve written about gratitude before – and will undoubtedly continue.  Quick and easy ways to refocus on what you can be grateful for is often hard when you’re feeling down.  Force yourself to name, list, draw 3 – 5 things every day.

They can be the same things every day and minor things taken for granted.

Examples of my gratitude:

  • I have teeth to brush

  • When I turn on the faucet water runs out

  • Blog followers clicked “like” on this post whether they “liked” it or not

Ahhhh. . .  I feel a serotonin surge in my anterior cingulate cortex and my  emotional intelligence increasing as I type . . . 


*Alex Korb,  The Upward Spiral: Using Neuroscience to Reverse the Course of Depression, One Small Change at a Time



Want to be happy? Eat Your Dessert First

We’ve all fallen into thinking “I will be happy when ___________”.  Sometimes it’s a mind set we’ve been taught: Eat your vegetables before you can have dessert;  There’s no time for happiness just “hard” work.  Often it’s simply paddling as fast as we can to keep our head above water.

Shawn Achor, author of The Happiness Advantage, maintains we need to get happy first and success will be easier for when we are in a good mood we work better, are more creative, and cope better.

The neurochemistry says it all
“Positive emotions flood our brain with dopamine and serotonin, chemicals that not only make us feel good, but dial up the learning centers of our brains to higher levels. They help us organize new information, keep that information in the brain longer, and retrieve it faster later on. And they enable us to make and sustain more neural connections, which allows us to think more quickly and creatively, become more skilled at complex analysis and problem solving, and see and invent new ways of doing things.”

Heels over Head by Peggy

Smple activities that will increase the “happy” neurotransmitters in your brain.

Recall a memory of something happy or funny
Take a brisk walk
Watch a funny video clip or cartoon
Hang out with someone who makes you smile

Proven ways to increase happiness which take a bit more time and effort:

1. Meditation (Joy on Demand”, a book on easy ways to meditate)

2. Think of something you can look forward to doing

 3. Perform an act of kindness

Acts of Kindness by Peggy

4.Modify your physical environment (go outside in nice weather, surround yourself with pictures that remind you of loved ones, happy times, trips, read positive magazines, books, videos or surround yourself with objects or symbols that bring a smile.

5. Exercise 20 – 30 min. 3X week

6. Create & nurture relationships.

 7. Use your skills and do something you enjoy















Symptoms of Happiness

I was embarrassed!

Patients who had just been released from the hospital’s psychiatric unit caught me red-handed.   I was leading a group therapy session about how important it is to focus on the positive – what you want instead of what you do not want. I went on and on explaining that when we think negatively the neo-cortex part of our brains triggers neuro-chemical emotions which correspond to those thoughts.

Not happy

Not happy

I smoothly seque-wayed into explaining what the many symptoms of depression are. The patients had been listening,  and stopped me and not so diplomatically pointed out I was focusing on the negative. Lesson learned!  MY lesson learned.

The group decided that instead of learning symptoms of depression, they would create a list of  symptoms of happiness.  

 Here’s their list:

Symptoms of Happiness

  1. Feeling good (or at least “decent”) most of the day, for two weeks or more.
  2. Eating an appropriate amount of food with good appetite.
  3. Sleeping well and awakening refreshed.
  4. Taking pleasure in most everyday activities and enjoying fun activities.
  5. Having a good energy level most of the day, every day, for two weeks or more.
  6. Having thoughts of fun or of good times to come.
  7. Being able to concentrate on the activity on hand.
  8. Feeling that one’s life matters.
  9. Able to exercise three times a week for half an hour, or more.
  10. Socialize in person or on the phone with 5 to 7 people each week. ( texting counts too)
  11. Laugh or at least smile every day.
  12. tailupsmall

    Happy is as Happy Thinks

How many happiness “symptoms” do you have?

(even one is a start).


Linda commented (below): Feeling grateful, enjoying nature, feeling loved, able to say “life is wonderful”.


Research shows you will be happier for 3 months – Music to my ears

I played violin in the high school orchestra. It was enjoyable and got me out of physical education class. Practicing was another matter.  Practicing the violin was excruciating for me. It was solely focused on doing weird, complicated, boring scales over and over and over . . . no melody, NO FUN.   I would set a timer for 1 hour: polish my violin for 10 minutes; resin the bow for 5; tune the strings for 15 and; laboriously do scales for the rest of the time. I did get better.

If only I had known that I could have practiced being in a good mood while I was practicing scales.

Yup, research now shows the more you practice being in a good mood the better you get at keeping a good mood.

Our brains seek out familiar patterns. The more we consciously focus on positive thoughts the easier it is for our brain to access those thoughts and find positive patterns in other areas.  (Of course, there is a corollary  – focus on the negative and your brain will look for more negative connections).  So the more you think about the positive things in your life, the easier it is to think of good things in your life. 

Start at any time.  Like now. Think about something “positive/good” . . . a time you had fun or laughed at a joke or a childhood celebration.  It doesn’t even have to be about you or your life . . .  something “positive” you’ve witnessed, read about or even imagined.  Share it with someone and notice feeling happier.

The more you practice the easier it will be for your brain to access the positive and lift your mood.  

Here’s an easy practice session.

   Maui Practicing, not judy, by Peggy

Pawsitive Exercise

Each day for a week, at the end of the day, write down 3 good or positive things that have happened to you that day and why they happened. 

They can be:

  • BIG things (became a grandma, bought a Maserati, won the lottery)
  • Small things (took a nice shower, ate breakfast, paid the water bill on time).
  • The same things repeated each day or different things/events listed.

When you write down why they happened give yourself credit:

  • I won the lottery because I bought a ticket
  • I took a nice hot shower because I paid the water bill on time
  • I became a grandma because I became a mother because I have kept a good relationship with my daughter because I called her and had a positive conversation.

You don’t need a fancy journal –

a notebook, post-it-notes, napkins will work.

Just do this for one week.

Research shows you will be happier for 3 months!

My violin “practice” list would have looked like this:

  • I managed to get through another violin practice session without dying of boredom.
  • I played in tune, 75% of the time
  • I polished my violin and it’s shiny.


Reference:  Seligman, M. P., Steen, T. A., Park, N., & Peterson, C. (2005). Positive Psychology Progress. American Psychologist, 60(5), 410-421. doi:10.1037/0003-066X.60.5.410



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