In a recent study we conducted in my lab, we investigated how consumers who are able to practice restraint in purchasing are different than those who are loose in their spending habits. The results show that there are distinct differences between tightwads, those who have trouble spending money, and spendthrifts, those who have trouble not spending money. Using the data we collected on BeyondThePurchase.org, we find there are five advantages to being a tightwad.
Tightwads use their money wisely. There are numerous articles in the consumer research that show buying experiences, like going to concerts and dining out, provides consumers with more happiness than buying material items, like jewelry and clothing. Our data shows that tightwads have a tendency to buy more experiences than material items. Also, spendthrifts tend to buy more material items than experiences and therefore do not enjoy the same benefits as more thrifty consumers.
Tightwads practice healthy spending habits. On top of not using their money to effectively increase their happiness, spendthrifts are prone to compulsive buying—maladaptive repetitive buying associated with low self-esteem and depression. Spendthrifts are also more likely to buy without thinking. Tightwads are also more conscientiousness and seem better adapted to avoid these mental health issues.
Tightwads are not easily influenced. Trusted advice is not as valuable as having the ability to make up one's own mind. Tightwads are less susceptible to having their minds made up by others. Spendthrifts are more likely to possess a desire to comply with others’ wishes.
Tightwads have eyes on the prize. Tightwads not only value achievement more than spendthrifts, they are also more open to self-development. This combination makes it more likely for tightwads to find success professionally and perhaps at home. A strong correlation between being a tightwad and positive emotions, specifically joy and contentment, suggests that exercising financial restraint may inspire happiness all on its own.
Tightwads are not what you think. Being a tightwad is depicted as a 16th century character who is an old miserly man with tight purse strings--a wretched old man who never had any fun. However, considering what these results tell us, perhaps you being a tightwad leads to being wise, healthy, happy, independent, and highly-motivated.
Beyond The Purchase is a website dedicated to understanding the psychology behind spending decisions and the relationship between money and happiness. We study how factors like your values and personality interact with spending decisions to affect your happiness. At Beyond The Purchase you can take quizzes that help you understand what motivates your spending decisions, and you’ll get personalized feedback and tips. For example:
How do you score on the five fundamental dimensions of personality? Take our Big Five personality test and find out.
How do you feel about your past, present, and future? Take the Time Attitudes Survey and learn about your relation with time.
How happy are your Facebook updates? We can analyze your last 25 Facebook status updates and determine how happy you have been.
How happy is your subconscious? Take our Happiness IAT and find out.
With these insights, you can better understand the ways in which your financial decisions affect your happiness. To read more about the connection between money and happiness, go to the Beyond the Purchase blog.