[Editor’s Note: Today’s WCI Network post from The Physician Philosopher discusses some of the issues with what I like to call “retail therapy” and how to overcome it. For those who are not aware, Jimmy Turner at The Physician Philosopher is currently waitlisting for the Winter edition of Alpha Coaching, a physician life coaching service that also now offers some financial and business coaching. If you sign up off the wait list, you save $500 on the service. Learn more here.]
Though I love writing about the psychology of money, I must admit that I suffer the same temptations as anyone else. After all, I am human. I’ve battled back and forth on whether I should sell my car (yes, my much beloved Chevy SS). In the end, I’ve decided to keep it because, as you’ll read below, a new car isn’t going to make me any happier. This struggle involves avoiding the consumerism trap that plagues many of us. Consumer addiction is very real.
Dopamine and Consumer Addiction
Dopamine is the predominant neurotransmitter that aids in pretty much any addiction. It’s the same for consumer addiction.
Interestingly, animal models have shown that more dopamine is released in anticipation of a reward than when the reward is actually received. Along the same lines, purchasing products online that we know will arrive in a couple of days at your door also produces a higher dopamine surge than buying it in the store where you receive it immediately.
Getting that hit of dopamine is the reason many of us often purchase products. Whether we realize it or not. Unfortunately, the dopamine rush is short-lived. This is the reason we need to replace new cars as often as we replace new phones. Or new clothes.
We all adapt to our current state. Then, we are looking for the next rush. Consumer addiction can produce a financial death spiral, if we let it.
The Doctor Problem
Doctors are in a unique position when it comes to the consumerism problem for at least three specific reasons.
First, we have an extremely high rate of burnout and moral injury in our profession. It doesn’t take long to realize that buying stuff often makes us feel happier, even if it seems fleeting. This leads to repetitive spending habits as we are constantly in search of that ever-elusive happiness that being an attending physician was supposed to provide.
Second, physicians are high-income earners. This gives us the opportunity to make many mistakes. We know that our high earning potential can (probably) dig us out.
Third, there are certain expectations for what a doctor’s life should look like. Some of these are placed on us by society. Others are self-inflicted. Either way, the point is the same. Doctors are expected to drive certain cars, live in certain houses, and to provide a certain kind of education for their kids.
The Road to Burnout
It has long been my contention that the addictive nature of spending money plays an integral part in the doctor’s road to burnout.
Many of us spent countless hours in training while we learned our craft. In order to become experts, we often missed events and experienced traumatizing events while at work. This can result in significant burnout, moral injury, and compassion fatigue.
All of this sacrifice comes with the allure of the attending life making it all worth it someday. We will get to help patients while we also make a good living. Yet, when we finish, we find that medicine is now a business run by administrators, insurance companies, and electronic medical records.
It is in this situation that we make the decision to buy the doctor house, car, private schooling for our kids, and all of the other amenities that are befitting of a doctor’s life. This spending is meant to make us happy! And, initially, it does.
Only later do we realize that our consumer addiction only makes things worse. Unfortunately, it traps us deeper and deeper into debt. In turn, this only worsens our potential for burnout.
The Solution to Consumer Addiction
There are a few practical solutions to help us prevent the bad spending habits that many of us have acquired.
#1 Learn Contentment
Contentment is the real key to financial success. Studies have shown that we should be spending our money on experiences. Not on things.
Of course, the reason that the studies support this is because experiences have been shown to produce longer sustained happiness than cars, houses, clothes, or designer gadgets.
Once we recognize that the new purchase we are considering is unlikely to make us happy long term, it becomes easier to do the right thing.
#2 Perform an Inventory Walk Around
While walking around your house before going to bed, make note of all the things you own. Then, think about how happy those things made you when you first purchased them. Next, compare that to how much happiness they now provide. It’s probably not the same today as it was then.
The Dopamine simply doesn’t last very long.
#3 Be Intentional
In personal finance, each purchase is either working towards your goals or pushing you further away from them.
When tempted to make a purchase, we should spend some time thinking about the purpose behind the purchase. Is it likely to make us happier? How will we use it? Is it accomplishing our big picture goals?
In particular, this helps with big purchases. When I’ve rationalized my way to a bad decision like buying a used truck we don’t need, I think about our goals. Will that truck help us get to our financial independence any sooner? Is it going to provide utility I would actually use?
If you need help sorting out your big picture goals, then you need to go through the Three Kinder Questions.
#4 Exercise the Frugal Muscles
Financial fitness is just like physical fitness. The more often you flex the muscles of frugality, the easier it will be the next time. On top of that, you will also prevent the consumer regret that plagues so many of us after a big purchase.
The next time a big purchase temptation comes up, just decide to sit on it for a little bit. Wait a month to make the purchase. If you still feel like you need it after one month, then wait another. Eventually, you’ll realize that the right decision is to avoid the purchase altogether.
And, with each decision towards frugality, you will be one step closer to financial independence.
#5 Don’t Forget the 10% Rule
After everything is said and done, you cannot deny yourself forever. It’s just not healthy. So, remember to enjoy yourself however your heart pleases every once in a while.
My family and I do this by practicing The 10% Rule. The gist here is to take 10% of any bonus, raise, or unexpected money to spend on whatever your heart pleases. The purpose of this is to allow yourself to live a little and to make a few mistakes that won’t sink the ship.
Just don’t forget the other 90%. That should go towards your wealth accumulation rate (WAR).
Doctors are perfectly positioned to fall prey to the addiction of consumerism that runs rampant in our culture. Instead, join the counterculture of financial independence.
If you do, you’ll find that you save more money, find more contentment, stave off burnout. In addition to all of that, you’ll find an escape hatch to burnout through financial independence.
How have you balanced consumerism with working towards financial independence? What has and hasn’t worked in that process? Comment below!