University News

Materialism, Debt, and Well-Being

by James E. Maddux, Ph.D, CWB Senior Scholar

In her 1913 novel The Custom of the Country, American author Edith Wharton tells the story of a beautiful but amoral and ruthless social-climbing young American named Undine Spragg whose life is centered around the pursuit of wealth, social status, and prestige. Although her social and material conquests occasionally bring her a temporary sense of victory and satisfaction, she always ends up feeling disappointed and empty, and so soon begins looking for another material or social acquisition. Toward the end of the novel, Undine finally fulfills her dream by marrying an older, wealthy man (to whom she had been married and divorced previously) and moving to Paris. In the final scene, she is descending the staircase of her Parisian mansion to greet the guests at her first dinner party. Yet, as Wharton tell us, “Even now [Undine]  was not always happy. She had everything she wanted, but she still felt, at times, that there were other things she might want if she knew about them.”

The Custom of the Country is a cautionary tale about the perils of material and social ambitions. In the 107 years since its publication, research has repeatedly found that Wharton is right – that a life spent pursuing material goods and social status is a life doomed to disappointment and spiritual poverty.

Much of this materialistic ambition – what social psychologist Helga Ditmar calls the materialistic value orientation – is driven by the need to impress other people with our purchasing power and our financial success, often to boost our self-esteem. Over-concern with the approval of other people is, by itself, detrimental to well-being. Trying to spend your way to the approval of others only makes things worse.

Of course, the idea that we buy things to impress other people is hardly new. The pursuit of money, status, and power has played a large role in social systems since ancient Egypt, Greece,  and Rome. In 1899, sociologist and economist Thorstein Veblen called this to our attention in 1899 in his influential book The Theory of the Leisure Class, in which he argues that one of primary motivations for buying expensive material goods (and expensive leisure activities such as grand vacations) is to advertise our wealth to other people – what he called conspicuous consumption. Thus, says Veblen, we not only consume expensively but we also consume conspicuously – we buy things that we can show to other people or talk about with other people.

We all do this at times, but for many people the desire to be (or at least appear to be) financially successful becomes their overriding motive in life that leads to living beyond their means – accumulating debt as quickly as they accumulate expensive, needless consumer goods and overpriced leisure activities.

Not only is conspicuous consumption not conducive to greater feelings of well-being, it is actually incompatible with it. The constant pursuit of money for the main purpose of buying things to impress other people makes most people unhappier – possibly because, as Undine Spragg learned much too late, it is a thirst that can never be completely quenched. There is always something bigger and shinier to buy, and there is always someone out there who seems to have more and do more – and seems happier for it. This is a good example of the hedonic treadmill that I mentioned in my previous column; we buy and buy and buy, but our happiness doesn’t budge. We may get a temporary emotional boost from buying a new car and showing it off to other people, but the “new car smell,” as they say, eventually wears off, and eventually we return to our pre-new-car level of happiness and life satisfaction – although a little poorer, probably just a little disappointed, and possibly in debt.

Materialistic ambitions and debt are interconnected problems because many people go into debt to purchase expensive material goods (a walk-in closet full of clothes and shoes, a 36-inch television set in every room, the latest and most expensive smartphone, etc.) or experiences (luxury vacation packages) that they really do not need but purchase anyway to impress other people or fill an emotional or spiritual void.

Debt may be, in fact, the most “anti-well-being” result of conspicuous consumption. Research suggests that debt can increase your risk of poor health, including long-term illness or disability, chronic fatigue, back pain, alcohol abuse, drug abuse, smoking tobacco, and obesity – and the deeper the debt, the greater the risk. People deeply in debt have a three-times greater risk of experiencing a mental disorder – depression in particular.  People who are heavily in debt are also at significantly greater risk for suicide; suicide completers are eight times more likely to be in debt than the average person. These studies do not prove that going into debt leads to these problems, but the evidence for cause is strong.

If conspicuous consumption and the debt that results from it can make people unhappy, can frugality and thrift have the opposite effect? The answer is yes. We can define frugality and thrift as the wise and efficient use of resources, including money.  Research suggests that thrifty, frugal people are happier than status-seeking conspicuous consumers, partly because they are better able to avoid debt. They also tend to more greatly appreciate or savor the goods and experiences they purchase and tend to pursue intrinsic goals such as living according to their values rather than extrinsic goals such as impressing other people. The problem is not the money but our motives for making it and spending it.

A few simple lifestyle changes can help keep you from falling into the trap of conspicuous consuming and debt:

  1. Work on being less concerned with how others evaluate your financial status, especially as it is reflected in your clothes, your car, and your gadgets. The people who matter most will be impressed the most by who you are, not by what you own or how much you make.
  1. Avoid what is usually called consumer debt, such as using credit cards to buy more clothes, shoes, and gadgets that you don’t really need or a vacation that you will actually enjoy more if you save up for it instead of going into debt for it.
  1. Be thrifty and frugal. Buy carefully and wisely. Buy fewer things and make them last longer (Do you really need pairs of those athletic shoes in six different colors?) Use things up before tossing them out and buying new ones.

Try this for a few months. Your sense of well-being and self-worth will be the better for your efforts.

Further reading:

Chancellor, J., & Lyubomirski, S. (2011).  Happiness and thrift:  When (spending) less is (hedonically) more. Journal of Consumer Psychology, 21, 131-138.

Dunn, E. W., Gilbert, D. T., & Wilson, T. D. (2011).  If money doesn’t make you happy, then you probably aren’t spending it right. Journal of Consumer Psychology, 21, 115-125.

Dittmar. H., & Hurst, M. (2018). The impact of a materialistic value orientation on well-being. In J. E. Maddux (Ed.), Subjective well-being and life satisfaction. New York: Routledge.

Richardson, T. , Elliot, P., Roberts, R. (2013). The relationship between personal unsecured debt and mental and physical health: A systematic review and meta-analysis. Clinical Psychology Review, 33, 1148-1162.

Srivastava, A., Locke, E. A., & Bartol, K. M. (2001). Money and subjective well-being: It’s not the money, it’s the motives.  Journal of Personality and Social Psychology, 80, 959-971.

Tay, L., Batz, C., Parrigon, S., & Kuykendall, L. (2017). Debt and subjective well-being: The other side of the income-happiness coin. Journal of Happiness Studies, 18, 903-937.