Here’s the thread for the liveblogging of today’s Midmorning regarding the study, “Tightwads and Spendthrifts,” examining how we handle our spending. You can find background on the study in the next thread. Post your comments/stories here and we’ll pick out the most intriguing ones for the broadcast.
Guests: Scott Rick, author of the study; :Larry Compeau, professor of Marketing at Clarkson University School of Business. He was quoted in an interesting article in January about the symbolic tightening of the belt.
10:07 – We’re off and running. Question: How well do you and your friends really understand and believe in the concept of frugality. Parents? What do you think your kids’ perception of frugality is?
10:11 – Scott Rick, who did this study as part of his dissertation, says people usually consider what else the money they’re about to spend could be used for. He concludes that Gen Y doesn’t do this comparison.
10:13 – Tyler (in comments) raises the possibility that much of this difference in how people spend is the bank instrument involved; that with debit cards (used widely by Gen Y) creates an illusion of it not really being money, whereas people who hand over the cash (or even write a check) have more of a connection to the money being spent.
10:15 – We tend to be more frugal as we get older because we have more “pain” experiences. Larry says “this particular generation has never had to suffer a protracted economic downtown.
10:20 Women vs. men. OK, here we go. Women, the authors say, approach spending differently, that women tend to see spending as more therapeutic. “It’s not clear if their theory is correct,” Scott said.
10:24 : Gen Xer married to Gen Yer on the phone. “We’re very different,” she says.
10:26 – Scott: “There’s a genetic component to this.”
10:32 – In comments, Jessica raises the possibility that it’s the parents’ fault for raising Xers and Yers with a sense of the value of acquiring things. Lynn, on the other hand, is as frugal as they come and objects to being lumped into a generational stereotype. And David, father of a 24 year old, says he has to ask his daughter to spend money, she’s so frugal.
10:36 – How is debt viewed by “this” generation. Scott says he did in-depth interviews with a wide variety of people who had gone through bad credit and bankruptcy problems. The interviews spanned ages and household incomes. Says he got a difference in the role debt plays. Younger people tended to view being in debt as a natural part of financial accounting. Older people tended to view debt as something that was reserved for special occasions.
10:42 – A father calls and says son went from a spendthrift to a tightwad as soon as he moved out.
10:45 – Talk about conflicted. Jon Paul in comments writes:
I am a tightwad and a Spendtrift. I take responsibility seriously and I could not afford to be anythign else. I am not spending any money on anything other than Child Support, student loans, cell phone, and transportation. ( I am getting rent realatively for free) I am still not able to save.
I’ll try to pass this on to the guests next time Kerri comes to me.
10:49 – Larry: There’s a mentality on consumers behalf that they don’t want to “fix” anything (see comment below from the wife of a surgeon who says he fixes the cars).
10:53 – Scott: There’s an evolutionary ancient system that wants pleasure now, but a newer system that can override those desires. He theorizes, though, that there may not be a connection between various generations on how the brain works.
10:56 – Scott says his next study is going to be among couples. Do opposites attract? Can’t wait for that one.
This was fun. Keep talking in comments. We’ll be here all day.