Thirty-two year old sales representative Luke Cooper is a self-confessed tightwad who works two jobs, owns an investment property and lives as cheaply as possible.
He dislikes spending money unlike Melbourne fashion model Susannah Murray; a shopaholic with eight wardrobes of clothes and soaring credit card debt who is addicted to the emotional high she gets from shopping.
But their two distinct reactions to spending are all in their head according to research by Assistant Professor Scott Rick from the University of Michigan.
Assistant Prof Rick found that our shopping habits hinge on the level of psychological pain we feel when handing over our cash.
By studying the brains of shoppers through MRI scans he created what he dubbed a ‘Spendthrift-Tightwad’ scale.
People who experience the most psychological pain from parting with their money are at the tightwad end of the scale, while those who experience a sense of reward are the spendthrifts.
Shopping pain increased when consumers used cash, while credit cards provided a retail anaesthetic.
In the lead up to Christmas Ass Prof Rick found tightwads and spendthrifts spent the same amount on gifts for others.
“It may be that spending money on someone else lessens the pain of making purchases. Alternatively, spending on gifts may be just as painful as usual for tightwads, but the necessity of buying gifts overwhelms the influence of that pain on spending decisions,” he said
The research found that spendthrifts spend significantly more on coffee, clothes and entertainment.
A fact supported by Ms Murray who admits she is addicted to shopping for clothes and accessories.
“I live on Chapel Street, so there are times when I have popped down to the shops for a clove of garlic and come back with three new dresses,” she said.
Ms Murray, a 207 Big Brother constestant, and her partner had to move to a bigger house recently to accommodate her enormous collection of clothes.
She admits shopping gives her an emotional buzz and sense of well-being, but her high credit card debt and lack of assets is starting to worry her now that she is in her thirties.
It’s a lifestyle that Luke Cooper can’t imagine. He baulks at the idea of spending $50 on a new shirt and is not interested in material items.
“I live and eat pretty cheaply, I don’t need fancy things or gadgets. I have a really old car and a pre-paid mobile and I’d rather buy secondhand where I can. I don’t enjoy spending money,” he said.
Splash or Stash? What works for you?