Materialism, Quality of Life & Financial Planning Tim Kasser, Ph.D.

Advertisements

Political Discourse “…the American people have got to go about their business. We cannot let the terrorists achieve the objective of frightening our nation to the point where we don’t conduct business, where people don’t shop” (reported in The New York Times, October 12, 2001)

Materialism’s allure The percentage of incoming American First-year college students reporting it is “very important” or “essential” to be “financially well-off”: 42% in the mid 1960s 75% in the mid 2000s

Messages of Materialism Can purchase happiness Important to work and consume Life is meaningful and people are successful to the extent they have money, possessions, and the right image

Is this true? Psychological costs Social costs Ecological costs Financial costs

Measuring Materialism Survey methods (e.g., Belk, 1985, Richins & Dawson, 1992) Rate agreement with statements Sample Items –My life would be better if I owned certain things I don’t have. –I like to own things that impress people. –I like a lot of luxury in my life. –I would rather buy something I need than borrow it from someone else.

Measuring Materialism Values strategy (e.g., Kasser & Ryan, 1993, 1996) Rate many goals, guiding principles, (e.g., family, spirituality, fun, etc.) Sample materialistic items You will have a job that pays well You will have many expensive possessions You will achieve the “look” you’ve been after You will be admired by many people Examine relative importance of goals All of us are somewhat materialistic

Happiness

Diminished Happiness Kasser & Ryan, 1993, 1996, 2001; Sheldon & Kasser, 1995, 1998, 2001 Higher: –Anxiety –Depression –Physical Symptoms –Unpleasant emotions –Drug & Alcohol Use Lower –Self-actualization –Vitality –Life Satisfaction –Pleasant Emotions

Found in many samples Types of people –Middle & High School students –College Students –Adults –Business People Countries –Australia –Denmark –Germany –Hungary –India –Russia –Singapore –S. Korea –United Kingdom

Social Behavior

Care less about: –Being helpful and loyal –Mature love and true friendship –Social justice and equality –Schwartz (1996) More manipulative and competitive –McHoskey (1999); Sheldon et al., (2000) Less pro-social and more anti-social behavior –Cohen & Cohen (1996); Kasser & Ryan (1993); McHoskey (1999)

Social Behavior - Priming Vohs et al. (2006) Unscramble sentences Control sentence: “cold it desk outside is” Money sentence: “high a salary desk paying”

Social Behavior - Priming Vohs et al. (2006) Unscramble sentences Control sentence: “it is cold outside” Money sentence: “a high paying salary”

Time spent helping

# Pencils Gathered

Ecological Behavior

Ecological Outcomes Care less about the environment –Saunders & Munro (2000); Schwartz (1994) Fewer pro-environmental behaviors –Brown & Kasser (2005); Gatersleben et al. (in prep); Kasser (2005); Richins & Dawson (1992) More greed and consumption in resource-dilemma games –Kasser & Sheldon (2000); Sheldon & McGregor (2000)

Ecological Footprint Number of acres people use to support their lifestyle Transportation, food, housing Brown & Kasser (2005) –Higher materialism, higher Ecological Footprint

Financial Behavior

Three options for money –Spend –Save –Share

Spending (Richins & Dawson, 1992) If imagine a $20,000 windfall, high materialists spend $3,445 on buying for self vs. $1,106 for low materialists

Spending (Kasser et al. 2009) In 92 adults, materialism associated with habits of: - using cash card, - going shopping to lift spirits - spending money one doesn’t have - buying because of the brand

Spending (Brown, Kasser et al., 2009) 83 adults kept track of all spending behaviors >$5 for 3 weeks

Spending (Brown, Kasser et al., 2009) 83 adults kept track of all spending behaviors >$5 for 3 weeks Controlling for income, materialism associated with - More frequent discretionary purchases - More $ spent on necessary purchases

Saving (Kasser, 2005) In sample of 206 adolescents, materialism associated with saving less of imaginary $100 windfall

Saving (Kasser et al., 2009) In sample of 92 adults, materialism associated with: - Less thrifty personality - Losing sleep thinking about $ - Not following budget

Sharing (Richins & Dawson, 1992) Imaginary windfall of $20K, high materialists give away $1822 vs. $4413 for low materialists

Sharing (Vohs et al. 2006) Unscramble money vs. neutral sentences

Sharing (Vohs et al. 2006) Unscramble money vs. neutral sentences Gave subject $2 in quarters

Sharing (Vohs et al. 2006) Unscramble money vs. neutral sentences Gave subject $2 in quarters Asked for donation to University Student Fund

Amount Donated

Two-fold Strategy

Materialism

Two-fold Strategy Materialism Causes

Two-fold Strategy Materialism Causes

Two-fold Strategy Materialism Causes Healthy Values

Two-fold Strategy Material- ism Causes Healthy Values

Causes of Materialism (Kasser et al. 2004) Social Modeling –Higher if friends, parents, peers care –Higher if more television –Higher if live under neo-liberalism Insecurity –Higher if cold parenting, divorce –Higher if poverty –Higher if thinking of death

Healthy Values Grouzet, Kasser et al. (2005) Assessed aspirations in 11 domains –e.g., Spirituality, Hedonism, Affiliation, Health, etc. >1800 College students in 15 nations Circular Stochastic Modeling –Adjacent goals are consistent –Opposing goals are conflictual

Intrinsic Values Kasser & Ryan (1996) Self-acceptance “I will follow my interests and curiosity where they take me.” Affiliation “I will express my love for special people.” Community Feeling “I will help the world become a better place.”

Happiness More happiness More life satisfaction Higher vitality Less depression Less anxiety Fewer physical symptoms

Social Behavior More prosocial behavior More empathy More cooperation Less antisocial behavior

Ecological Behavior More environmentally friendly behaviors Lower Ecological Footprint Less consumption in forest dilemma game

Two-fold Strategy Material- ism Causes Healthy Values

Avenues for Change Conversations with clients - Responses to Insecurity - Voluntary Simplicity Policy changes - Advertising - Indicators of Progress

Insecurity Studies show feeling insecure can drive materialistic behaviors - past experiences with family - economic insecurities - worries about death - hunger

Insecurity - Directions Financial planners often see clients during periods of transition & insecurity Opportunity for “Post-traumatic growth” and helping clients create a new life narrative focused around intrinsic values Savings promotes security

Voluntary Simplicity Rejection of work-spend lifestyle Instead focus on “inward riches” of caring about personal growth, family, volunteer activity, and ecology (Elgin, 1993) Brown & Kasser (2005) compared 200 VSrs with 200 mainstream U.S. citizens

VS Lifestyle High Well-being Ecologically Responsible Behaviors

VS Lifestyle High Intrinsic & Low Extrinsic Values High Well-being Ecologically Responsible Behaviors

Voluntary Simplicity - Directions Explore ideas about happiness and values, and about what “affluence” really means Introduce established VS programs –Your Money or Your Life –Simplicity Circles

Advertising Designed to promote consumerism Often creates feelings of insecurity Presence everywhere promotes social norm that consumerism is good Exposure via TV associated with higher levels of materialism (Kasser et al., 2009; Schor, 2004; Sirgy et al., 1998)

Advertising - Directions Remove ads from public places Ban advertising to children Tax advertising as a form of pollution Use revenue to promote intrinsic values

National Indicators of Progress Currently Gross Domestic Product is dominant But GDP has many problems Alternative indicators include metrics of intrinsic values in computation Examples: –National Well-being –Bhutan’s Gross National Happiness –Happy Planet Index –Genuine Progress Indicator

Gross Domestic Product vs. Genuine Progress Indicator

National Indicators - Directions Adopt Alternative Indicators Hopefully, citizens will recognize that increases in GDP ≠increases in Quality of Life Thus, new policies will be developed

Summary Materialism associated with lower quality of life Can reduce materialism by - Removing causes - Promoting healthier values Financial planners can contribute