[Editor's Note: Today's WCI Network post from The Physician Philosopher discusses some of the issues with what I like to call “retail therapy” and how to overcome it.]
Though I love writing about the psychology of money, I must admit that I suffer the same temptations as anyone else. After all, I am human. I’ve battled back and forth on whether I should sell my car (yes, my much beloved Chevy SS). In the end, I’ve decided to keep it because, as you’ll read below, a new car isn’t going to make me any happier. This struggle involves avoiding the consumerism trap that plagues many of us. Consumer addiction is very real.
Dopamine and Consumer Addiction
Dopamine is the predominant neurotransmitter that aids in pretty much any addiction. It’s the same for consumer addiction.
Interestingly, animal models have shown that more dopamine is released in anticipation of a reward than when the reward is actually received. Along the same lines, purchasing products online that we know will arrive in a couple of days at your door also produces a higher dopamine surge than buying it in the store where you receive it immediately.
Getting that hit of dopamine is the reason many of us often purchase products. Whether we realize it or not. Unfortunately, the dopamine rush is short-lived. This is the reason we need to replace new cars as often as we replace new phones. Or new clothes.
We all adapt to our current state. Then, we are looking for the next rush. Consumer addiction can produce a financial death spiral, if we let it.
The Doctor Problem
Doctors are in a unique position when it comes to the consumerism problem for at least three specific reasons.
First, we have an extremely high rate of burnout and moral injury in our profession. It doesn’t take long to realize that buying stuff often makes us feel happier, even if it seems fleeting. This leads to repetitive spending habits as we are constantly in search of that ever-elusive happiness that being an attending physician was supposed to provide.
Second, physicians are high-income earners. This gives us the opportunity to make many mistakes. We know that our high earning potential can (probably) dig us out.
Third, there are certain expectations for what a doctor’s life should look like. Some of these are placed on us by society. Others are self-inflicted. Either way, the point is the same. Doctors are expected to drive certain cars, live in certain houses, and to provide a certain kind of education for their kids.
The Road to Burnout
It has long been my contention that the addictive nature of spending money plays an integral part in the doctor’s road to burnout.
Many of us spent countless hours in training while we learned our craft. In order to become experts, we often missed events and experienced traumatizing events while at work. This can result in significant burnout, moral injury, and compassion fatigue.
All of this sacrifice comes with the allure of the attending life making it all worth it someday. We will get to help patients while we also make a good living. Yet, when we finish, we find that medicine is now a business run by administrators, insurance companies, and electronic medical records.
It is in this situation that we make the decision to buy the doctor house, car, private schooling for our kids, and all of the other amenities that are befitting of a doctor’s life. This spending is meant to make us happy! And, initially, it does.
Only later do we realize that our consumer addiction only makes things worse. Unfortunately, it traps us deeper and deeper into debt. In turn, this only worsens our potential for burnout.
The Solution to Consumer Addiction
There are a few practical solutions to help us prevent the bad spending habits that many of us have acquired.
#1 Learn Contentment
Contentment is the real key to financial success. Studies have shown that we should be spending our money on experiences. Not on things.
Of course, the reason that the studies support this is because experiences have been shown to produce longer sustained happiness than cars, houses, clothes, or designer gadgets.
Once we recognize that the new purchase we are considering is unlikely to make us happy long term, it becomes easier to do the right thing.
#2 Perform an Inventory Walk Around
While walking around your house before going to bed, make note of all the things you own. Then, think about how happy those things made you when you first purchased them. Next, compare that to how much happiness they now provide. It’s probably not the same today as it was then.
In the end, we must learn to be content with what we have. When tempted to buy something new, think long and hard about the diminishing happiness that will likely accompany the purchase.
The Dopamine simply doesn’t last very long.
#3 Be Intentional
In personal finance, each purchase is either working towards your goals or pushing you further away from them.
When tempted to make a purchase, we should spend some time thinking about the purpose behind the purchase. Is it likely to make us happier? How will we use it? Is it accomplishing our big picture goals?
In particular, this helps with big purchases. When I’ve rationalized my way to a bad decision like buying a used truck we don’t need, I think about our goals. Will that truck help us get to our financial independence any sooner? Is it going to provide utility I would actually use?
Further Reading:
If you need help sorting out your big picture goals, then you need to go through the Three Kinder Questions.
#4 Exercise the Frugal Muscles
Financial fitness is just like physical fitness. The more often you flex the muscles of frugality, the easier it will be the next time. On top of that, you will also prevent the consumer regret that plagues so many of us after a big purchase.
The next time a big purchase temptation comes up, just decide to sit on it for a little bit. Wait a month to make the purchase. If you still feel like you need it after one month, then wait another. Eventually, you’ll realize that the right decision is to avoid the purchase altogether.
And, with each decision towards frugality, you will be one step closer to financial independence.
#5 Don’t Forget the 10% Rule
After everything is said and done, you cannot deny yourself forever. It’s just not healthy. So, remember to enjoy yourself however your heart pleases every once in a while.
My family and I do this by practicing The 10% Rule. The gist here is to take 10% of any bonus, raise, or unexpected money to spend on whatever your heart pleases. The purpose of this is to allow yourself to live a little and to make a few mistakes that won’t sink the ship.
Just don’t forget the other 90%. That should go towards your wealth accumulation rate (WAR).
Take-Home
Doctors are perfectly positioned to fall prey to the addiction of consumerism that runs rampant in our culture. Instead, join the counterculture of financial independence.
If you do, you’ll find that you save more money, find more contentment, stave off burnout. In addition to all of that, you’ll find an escape hatch to burnout through financial independence.
How have you balanced consumerism with working towards financial independence? What has and hasn't worked in that process? Comment below!
I absolutely agree. The best things in life aren’t things.
We’re thankfully reached the point via frugality where we can buy about anything we want. And we splurged a little here and there. In the end, every thing that is purchased has to be managed – it has to be stored, maintained, and maybe insured and that takes work and time. Fine jewelry? Better keep it in the safe. New car? More expensive insurance and taxes. Bigger house? More to clean, heat and cool. More clothes? Closet gets cramped. And right now, where to wear them? It isn’t worth it.
People over generalize the claims that people prefer experiences over material purchases. As with anything else, to should be phrased as SOME people prefer experiences. It also depends on the alternatives.
There are three choices, not two. One can buy experience. One can buy material goods. One can buy neither and save the money instead. Frequently, I choose the latter. Save instead of spend.
I spend more on material goods than experiences because I need some of the goods. Like food, electricity, heat, gasoline…
I don’t need to take a trip, go to a concert or attend a party.
Most of the time when I take a vacation trip, I end up wishing I had stayed home. Not only would it have saved money but being home would have been more pleasurable than going wherever I went. In my life, I can think of 3 trips that were enjoyable enough that I am definitely glad I took them. There are about 4 others that are roughly toss-ups. Not miserable and had some good points but barely worth the cost and unpleasant parts.
The rest, the vast majority of them, I would have preferred to stay home. NOT that I would have preferred to spend the money on some physical object. Just that I would have preferred not to have taken the trip. I would have been happier and I would have saved the money.
The whole experience vs material comparison assumes that one must spend money on something in order to be happy. Why not learn to find happiness in the things you have? Why not enjoy simple pleasures that are cheap or free? Don’t go to an expensive movie or a fancy restaurant meal. Eat at home. Read a book. Take a walk.
No trade-off of spending on experience or material purchases. No purchases at all.
I don’t think the blog states it’s an either or proposition i.e.. one must spend money on things or experiences. And as you point out, many pleasurable experiences are free or very inexpensive, and I think a lot of us that employ frugality have figured that out.
And I’m sorry to hear your trips were mostly duds. It’s awful to spend time and money on an experience that you just as soon would live with out.
I also think it’s part of human nature to compare yourself to others…often we think about this in the context of “keeping up with the Joneses” and leading to undesirable behavior.
It can cut the other way too. Check out this stat from the world bank-
“Over 1.9 billion people, or 26.2 percent of the world’s population, were living on less than $3.20 per day in 2015. ”
Thinking about this sort of thing every now and then, or when you’re feeling angst about an extravagant purchase, I think can bring you down to Earth.
Money can’t buy you happiness, but it can buy you a nice boat to be unhappy on. 😛
Now that’s really funny! I prefer your attitude compared to wet-blanket Alan.
dude I’m with you man!!! I prefer cheap/free staying at home and doing nothing! excitement and trips are overrated. god I sound boring. But I think diving deeper society sells us into taking vacations to the carribean, skiing, cruises, Disney World, etc to take advantage of our human tendency to enjoy experiences and profit off it. We have to focus on activities and experiences that we would enjoy with family and friends, not because some Disney commercial told us this would make you and your kids happy.
btw give it a few more years- those crappy trips you remember will seem rosier 🙂
The 10% rule is such good advice! Unfortunately, it’s easier to comprehend than it is to follow.
One of my all time favorite quotes:
“If you want to be happy for a day, go out and play golf. If you want to be happy for a week, go on a cruise. If you want to be happy for a month, get a new car. If you want to be happy for a year, win the lottery. But if you want to he happy for a lifetime, make sure you add value to everyone you come in contact with.”–Lou Holtz.