While it seems more like a utopian concept, the argument that some consumers could be addicted to saving moneymight not be as inconceivable as it sounds.
A study conducted by Professor George Loewenstein of Carnegie Mellon found that despite the challenges people have with saving money, a significant 25 percent of the general population actually found it painful to spend money.
Loewenstein studied 13,000 people to examine their brain activity patterns and response to desirable items (e.g., chocolate candy) versus undesirable items (e.g., the candy’s price tag), using functional magnetic resonance imaging techniques.
The results uncovered that if participants liked the chocolate, the brain’s reward center (the nucleus accumbens) demonstrated a positive reaction to seeing the candy. Upon seeing the chocolate’s price tag, however, the pain and disgust regions of the brain (the insula) showed activity.
These findings suggest that the brain’s negative response to tapping into a bank account is its inherent way of reeling in consumers from seeking out too many pleasure-seeking experiences. This adverse response to the thought of losing money is what might have paved the way for the different types of savers who seek to pad their savings accounts with extra cash.
There is no way to pigeonhole savers into a single, collective bunch, however. Money hoarders come with a variety of characteristics and have different motivations for saving money. Here are four different types of ultimate savers:
1. The Tightwad
Financial Philosophy: “It hurts to spend money.”
Think of the tight-fisted personality of Ebenezer Scrooge, and that’s what you’ll find when faced with a tightwad. This group of cheapskates are the sort that Loewenstein’s study identified as being pained or “disgusted” at the thought of spending money.
It’s likely that the very thought of being social sends shivers down their spines for fear of what expenses might lurk behind a seemingly innocent night out with friends. These individuals are so addicted to saving that even spending on basic necessities becomes an issue.
What to Do: If you’re a tightwad, Lowenstein recommends experimenting with different bank accounts to help keep budgets and savings priorities reasonable. For example, keep one account strictly for an emergency fund, and dedicate the other to covering discretionary items like personal hygiene products, groceries, etc.