It's just less than a week for Thanksgiving and Black Friday, which traditionally begins the holiday shopping season.
Every year around this time, the pressure to buy gifts and take advantage of low prices increases. Early-morning queues reflect the rush to buy some sought after prize.
From the outside, it seems these holiday shoppers are willing to pay any amount of cash.
But shoppers often behave differently than they would ideally like to behave, says University of Michigan Marketing Professor Scott Rick. The need to buy gifts may overwhelm the influence of purchase pain on spending decisions, he says.
Some consumers chronically spend more than they would like, and some consumers chronically spend less than they would like, Rick says.
Where an individual falls within the range of desiring to spend more or less largely determines whether he or she is a tightwad or a spendthrift, characteristics that determine quite a bit about a person's spending habits.
People who experience an intense pain of paying may behave as if dining out tonight requires giving up several nicer dinners next month. Rick refers such consumers as tightwads. People who experience minimal pain of paying may behave as if dining out tonight requires giving up nothing next month are referred as spendthrifts.
His research shows tightwads and spendthrifts spend about the same amount on gifts. It may be that spending money on someone else lessens the pain of making purchases. Alternatively, spending on gifts may be just as painful as usual for tightwads, but the need to purchase gifts overwhelms the influence of that pain on spending decisions.
Rick proposes that the pain of paying drives tightwads to spend less than they would like, while spendthrifts experience too little pain of paying and typically spend more than they would ideally like to spend.
The pain of paying matters most when purchases are optional, Rick says. Generally, gifts for loved ones are not optional, assuming we want to maintain those relationships.
Tightwads, also called Penny pinchers, are willing to spend more if dinner and a movie are framed as an investment in a relationship, while they spend substantially less in cases of paying for an item with cash that amplifies purchase pain.
Spendthrifts spend significantly more on coffee, clothes and entertainment. Spending trends level out again when paying for restaurants and hobbies.
Spending differences between tightwads and spendthrifts are greatest in situations that amplify the pain of paying and smallest in situations that diminish the pain of paying.
This is especially true when paying with credit cards because consumers don't immediately feel the pain associated with buying decisions.
Rick found that consumers defied economic models that assume people make spending decisions based on a purely cognitive appreciation of foregoing things in the future by spending today. Just imagine the pleasure a consumer would feel while eating a candy that she bought, and possibly the guilt she would feel after indulging.