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August 16, 2013

STAWAR: I’m Terry, and I’m an underspender

— I read the other day that Oprah was recently offended in some Swiss store when a clerk refused to show her a $38,000 purse. Racial profiling aside, it is shocking to middle America that even Oprah’s would want to buy a $38,000 purse, presumably to go with her $50,000 shoes.

There are things that my wife Diane simply refuses to buy, even if she wants them, just because she thinks they’re overpriced. With her, it’s not the price, it’s the principle. With me, it’s pretty much the price.

I don’t like to think of myself as a tightwad, but I’ve always had many of the symptoms. I’m anxious about spending and especially making large purchases. I still contend that it stems from all my father’s talk about going to the poorhouse if I left the lights on in the house.

Some people don’t spend money because they’re free-riders. They expect others to pay the freight and are willing to resort to dishonesty to avoid paying their fair share. These are folks who switch price tags. They may lie about ages to get discounts, they complain about perfectly fine food in restaurants to get it taken off the bill and they even used to hide their kids in the trunk when they went to the drive-in movies.

Our youngest son worked in a craft store one summer. He was pretty idealistic and would come home every night fuming about those customers who were trying to pull scams to get discounts and the worse part was how the management felt it was easier to just give in to them.

Then there are the tightwads — who are basically honest people, but have terrible trouble shaking loose with their money even when it’s necessary. I think about Scrooge making Bob Cratchit work in a freezing office just because he couldn’t bring himself to buy the coal needed to properly heat it. My father, who grew up during the depression, was obsessed with the thermostat, insulation and weather-stripping.

George Loewenstein, from Carnegie Mellon, along with his colleagues found that 24 percent of people are tightwads who have trouble spending money in most situations. To no one’s surprise, men were about three times as likely to be tightwads as women.

Using sophisticated brain-scanning techniques, Loewenstein also found that when people observe a desirable object, the brain’s pleasure centers are activated. Conversely, when they look at the price, pain receptors are triggered. Tightwads are easily overpowered by such pain messages, whereas spendthrifts (about 15 percent of the population) are more responsive to pleasure centers.

I admit that I’m brought to my knees by pain messages. Often it takes me more than one attempt to buy something I need because I get so upset by the price.

 Tightwads push frugality to an embarrassing degree. An acquaintance of mine from Florida would never order a drink at a restaurant. Instead, he’d ask for lemon with his ice water and would proceed to make lemonade, to everyone’s mortification. Another example of beverage miserliness involved a fellow who was a member of group of co-workers who took turns buying lunch. Whenever he was paying, he wouldn’t order a drink, but when it was some else’s turn, he always ordered iced tea.

Finally, there was my former boss, who had no idea what things really cost. He would give his wife a paltry sum to buy groceries each week and once during the holidays, he said to her, “Here’s an extra five, pick up a Christmas tree on the way home.”

I’m sure she still enjoys telling that story, to her second husband.

Finally, there are many people who are just thrifty. Everyone likes to brag about getting a good deal, but since the economic downturn, frugality is fashionable. It’s often difficult to distinguish between frugality and cheapness.

Cheapskates save money, but often in a socially inappropriate manner and at the expense of others, even if it doesn’t quite reach the threshold of dishonesty.

They may, for example, buy the cheapest hot dogs possible, without regard to quality. As a result, they end up cheating their families, and perhaps themselves, out of proper nutrition. A thrifty person, however, would take in to account both the cost, as well as potential benefits. A cheapskate may not tip servers, in order to ”save money,” while a frugal person budgets for such activities, including appropriate tips.

Being a tightwad is influenced by genetics, as well as cultural and familial factors. Loewenstein believes that it is a trait acquired early in life that is difficult to change. Garrison Keillor, for example, has written a lot about the concentration of parsimonious Norwegian bachelor farmers in his native Minnesota. He says the main difference between a canoe and a Norwegian bachelor farmer is that a canoe sometimes tips.

The basic criteria for a tightwad seem to boil down to: 1. failing to reciprocate financially; 2. avoiding necessary purchases; 3. making others uncomfortable; 4. refusing to help others, even in small ways, and; 5. sticker shock.

Psychologists prefer the less pejorative term, “underspenders” and according to author and psychologist Brad Klontz, “Underspenders go without things they can afford, and they have trouble enjoying their resources.:”

He says that they may frequently neglect basic self-care by not going to the dentist or doctor due to the expense. Many Americans raised during the Great Depression turned out to be underspenders. Klontz believes that the recent “great recession” may create a new generation of underspenders within the population of the children whose parents lost their jobs during this time.

Underspending is often rooted in two key beliefs: 1. “I need as much money as possible in order to feel security;” and 2. “I don’t deserve the nice things that money can buy.”

The first belief often comes from experiencing a real or imagined depravation. Spending any money at all is seen as bad, because it reduces the total amount of security you have. The second belief is related to guilt feelings that lessen self-esteem. Therapy with underspenders is often geared at correcting these two distortions.

Other strategies can also help, such as having underspenders use credit/debit cards instead of cash. Cash is too difficult to part with for many, while plastic doesn’t elicit the same trauma.

Explaining the long-term benefits of spending for health care or preventative maintenance is also helpful, as is creating a specific budget for recreational activities.

 Spending can also be reframed as “shifting assets,” from cash to whatever item that is purchased. It could be emphasized that these items continue to have value and shouldn’t be considered a loss.

Finally, package deals may be best for the underspender, since they reduce the total number of purchases that have to be made. Paying piecemeal may not be a problem for most people, but can be a nightmare for the underspender, who sees it as a never-ending attack on security.

It’s sort of like the image I get in the winter when I hear our furnace kick in and I can just visualize the meter on the No. 2 Fuel Oil pump, going a mile a minute, clicking away the dollars.

 — Terry L. Stawar, Ed.D., lives in Georgetown and is the CEO of LifeSpring the local community mental health center in Jeffersonville. He can be reached at tstawar@lifespr.com. Checkout his Welcome to Planet-Terry blog and podcast at www.planetterry.wordpress.com

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