The ‘What-the-Hell Effect’ holds that for even the most disciplined, whether trying to stick to a budget or a diet, one little slip can lead to another.
Karen Basha Egozi, CEO of the Epilepsy Foundation of Florida, is trying to reduce and control her use of credit cards.
When shopping is a problem
Most people experience the “What-The-Hell Effect” without letting it govern their lives. But April Lane Benson, author of “To Buy or Not To Buy,” says shopping may be a problem for you if:
• It’s your equal opportunity, all purpose mood changer.
• It makes you feel guilty or ashamed.
• You have a closet — or car trunk — full of unopened bags or items for which you haven’t removed tags.
• You avoid opening your bills or answering your phone in fear it’s a creditor.
Consider this
Are you carrying a credit card balance and saying, “What the Hell” to just one more purchase that probably won’t make a difference, anyway? Experts urge you to instead consider:
• That your balance — because it comes with an interest rate — is bumping up the sticker price of each item, sometimes doubling or tripling its actual cost.
• Your debt could wind up tying you to a job, making you unable to sock away the funds needed to chase after an opportunity.
• Your state of mind — ask yourself why you’re shopping and how you’ll pay the bill, which will put some space between the impulse and the action — helping you gain control.
Most people experience the “What-The-Hell Effect” without letting it govern their lives. But April Lane Benson, author of “To Buy or Not To Buy,” says shopping may be a problem for you if:
• It’s your equal opportunity, all purpose mood changer.
• It makes you feel guilty or ashamed.
• You have a closet — or car trunk — full of unopened bags or items for which you haven’t removed tags.
• You avoid opening your bills or answering your phone in fear it’s a creditor.
Consider this
Are you carrying a credit card balance and saying, “What the Hell” to just one more purchase that probably won’t make a difference, anyway? Experts urge you to instead consider:
• That your balance — because it comes with an interest rate — is bumping up the sticker price of each item, sometimes doubling or tripling its actual cost.
• Your debt could wind up tying you to a job, making you unable to sock away the funds needed to chase after an opportunity.
• Your state of mind — ask yourself why you’re shopping and how you’ll pay the bill, which will put some space between the impulse and the action — helping you gain control.
By Brett Graff
brett@thehomeeconomist.com
By all reasonable measures, Karen Basha Egozi is a strong-willed person. The 55-year-old has risen to CEO status — today heading up the Epilepsy Foundation of Florida — and has recently lost 20 pounds after deciding suddenly that the weight needed to go. Now, she’s banishing debt by packing away all her credit cards. Why? Because when it comes to activities such as shopping and eating, it takes just one slip — perhaps a charge at Macy’s or a sliver of cake — for Basha Egozi to shrug and decide that another (and after that, another) can’t possibly hurt. Can it?
“I’m pretty disciplined and organized,” she says. “I don’t know what a Type A personality is, but when I put my mind to something, it happens. But when you feel overweight you tend to eat, thinking it won’t make a difference. Same with credit cards, you say ‘I owe this much money, so what’s a little more?’ ”
Researchers for decades have dubbed it the “What-the-Hell Effect” and their work has long-proven it plagues the most disciplined of dieters — who in studies were, after slurping high-fat milkshakes, more likely to accept a plate of cookies. But new experiments show it’s also an attitude adapted by the strongest-willed shoppers. They’re most likely to pay their bills on time and carry zero balances.
But once the most regimented among us rack up some real debt — meaning it’s over about 3percent of their available credit limit — they’re a group of people who then build up the highest, most expensive balances, says Keith Wilcox, an assistant professor of marketing at Columbia Business School. Experts say it’s easy to draw a parallel between spending and snacking, seeing as they’re both forms of consumption. But also that the majority of the strong-willed folks who decide just one more won’t matter — even if it’s a decision made frequently enough to accumulate a mass that matters very much — can easily reverse the expensive thought process with just a few simple tricks.
“It’s true, very few people are perfect in this regard and most of them don’t have serious problems. But the higher your self-control the more likely you are to say, ‘What the Hell,’” says Wilcox. “The ones most focused on avoiding credit card debt spend more when they get it.”
Wilcox did a series of experiments based on the effect he knew had been originally documented in the dieting domain. First, he administered to a group a widely accepted psychological questionnaire that gauges each person’s self control and also obtained their credit card statements. In combining the two and combing the data, he found a correlation between the high self control and high balances. Even later, in a separate study, Wilcox asked people to participate in an online auction, finding that those with the strong self-control and high credit card balances were also willing to pay the most for a new iPad. And finally, he gave subjects hypothetical financial information and saw this effect – its technical term, in dieting anyway, is counterregulatory [CQ] eating — occur when disciplined people were dealing with imaginary figures Read more here...
“I’m pretty disciplined and organized,” she says. “I don’t know what a Type A personality is, but when I put my mind to something, it happens. But when you feel overweight you tend to eat, thinking it won’t make a difference. Same with credit cards, you say ‘I owe this much money, so what’s a little more?’ ”
Researchers for decades have dubbed it the “What-the-Hell Effect” and their work has long-proven it plagues the most disciplined of dieters — who in studies were, after slurping high-fat milkshakes, more likely to accept a plate of cookies. But new experiments show it’s also an attitude adapted by the strongest-willed shoppers. They’re most likely to pay their bills on time and carry zero balances.
But once the most regimented among us rack up some real debt — meaning it’s over about 3percent of their available credit limit — they’re a group of people who then build up the highest, most expensive balances, says Keith Wilcox, an assistant professor of marketing at Columbia Business School. Experts say it’s easy to draw a parallel between spending and snacking, seeing as they’re both forms of consumption. But also that the majority of the strong-willed folks who decide just one more won’t matter — even if it’s a decision made frequently enough to accumulate a mass that matters very much — can easily reverse the expensive thought process with just a few simple tricks.
“It’s true, very few people are perfect in this regard and most of them don’t have serious problems. But the higher your self-control the more likely you are to say, ‘What the Hell,’” says Wilcox. “The ones most focused on avoiding credit card debt spend more when they get it.”
Wilcox did a series of experiments based on the effect he knew had been originally documented in the dieting domain. First, he administered to a group a widely accepted psychological questionnaire that gauges each person’s self control and also obtained their credit card statements. In combining the two and combing the data, he found a correlation between the high self control and high balances. Even later, in a separate study, Wilcox asked people to participate in an online auction, finding that those with the strong self-control and high credit card balances were also willing to pay the most for a new iPad. And finally, he gave subjects hypothetical financial information and saw this effect – its technical term, in dieting anyway, is counterregulatory [CQ] eating — occur when disciplined people were dealing with imaginary figures Read more here...
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