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Frequent, Inexpensive Purchases or Infrequent, Expensive?

Which spending pattern do you think will make people happier?

Two weeks ago I introduced some financial and marketing experts to provide comments on the barriers to financial happiness—why don’t people save for a rainy day, invest when they are young, resist retail therapy, and yes, buy life experiences instead of material items?

The third question we discuss attempts to answer the question about spending money on frequent, inexpensive purchases instead of more infrequent expensive ones. Before you hear their answers, you may want to learn what factors influence your buying preferences by taking a short survey. To learn about your spending habits, first Login or Register with BeyondThePurchase.Org and take our Implicit Buying Motives Study.

Question #3In psychology, there is a debate about if you should spend small amounts of discretionary income every day or save up for a big-ticket purchase. Which spending pattern do you think will make people happier?

Peter Bielagus: I think you can, and should, do both. It is important to have constant financial victories; you have to celebrate milestones along the way. So, if you are saving $10,000 to go to Europe, celebrate, in a very small way, every time you save another $1000. Even though this is a temporary setback to your savings, it’s important to reward yourself for the work you are doing. 

Gary Foreman: Part of managing our finances is becoming familiar with what motivates us individually. Some of us need small, frequent treats to be happy. Others will soon be bored with a weekly movie but would enjoy the thrill of accumulating savings towards a big goal (the annual vacation). I don't believe that one decision is better than the other. The trick is to match our spending to our own natural inclinations.

Sarah Hardwick: I think saving up for a big ticket item will create an experience that will be ultimately more memorable and will allow you to savor and share it for longer. Getting together with friends and telling them stories about all the good times will bring those emotions back and spread the positive feelings to others.

Michael Karwic: We know that the anticipation of a large event can be very fulfilling. Simultaneously, we also know that happiness is more highly correlated with the frequency of pleasurable events than with the level of intensity of the positive experiences. Given that, my recommendation is to do both!  However, I will go further and say that we need to rank them, and your # 1 priority should be finding a varity of frequent sources of fulfillment. Then, we should consider larger items and future events, which themselves will be unique and enjoyable through both anticipation and experience.

What do you think?

At BeyondThePurchase.Org, we are researching the connection between people’s spending habitshappiness, and values. To find out more about how your personality and values influence how you relate to money and spending, we encourage you to first Login or Register with Beyond The Purchase and then take our Sucker Rumination Scale and the Tightwad/Spendthrift Scale. We think you may learn a lot about how you and why you spend your money the way you do.

Peter Bielagus is a speaker and financial educator. Gary Foreman is the editor of the Dollar Stretcher. Sarah Hardwick is the Founder & CEO Zenzi Communications. Michael B. Karwic is the Managing Director or Iron Valley Wealth Management