Exploring the Psychology of Spending Money

Spending money on material possessions can lead to disappointment as the expectations of change in life are not met. Aspirations for spending money trickle down from higher income groups to lower income groups. Wealth is relative and is defined in comparison to others. Nice stuff provides tangible utility and improves life, while fancy stuff offers social utility and status. Knowing how to spend money in a way that brings happiness becomes harder as income increases. After meeting basic needs, knowing what to want is more challenging than knowing what to need, which forms the core of the psychology of spending money.