Wilhoite 1

Alexis Wilhoite

Professor Moore

English 1302-Hon

21 March 2017

Addicted to Shopping

It is no secret that people like to shop and can get addicted to shopping, but sometimes

people like to go overboard on the amount of money that they spend while shopping.

Overspending is a problem that a majority of people face every day all over the world but mainly

focusing on the United States and the younger generation that is overspending and wasting

money on useless things that they want but do not necessarily need. Most young adults and

college students are the worst at overspending. By looking at the psychology behind

overspending, the credit card debt that most young adults and college students get into, and

seeing the statistics of what is causing overspending, a solution to the problem at hand will arise

to lower the amount of overspending.

Most young adults and college students do not know how to create a budget and stick to

it, they get themselves in credit card debt, and they put themselves in a financial situation that

they do not know how to get themselves out of and usually require help to get out of the black

hole of the financial world. Taking a look at the term consumer psychology will allow for a

better understanding of why the majority is overspending. Consumer psychology is the study of

the processes involved when individuals or groups select, purchase, use, or dispose of products,

services, ideas, or experiences to satisfy needs and desires.(Solomon).

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But, some of the problems that the over spenders face partially comes from student loans

and other expenses required for college, but that is not the place that most college students and

young adults are putting themselves in a financial blunder.

They are doing this online, in stores, and any place that offers a good deal or sale.

Psychology plays a part in their overspending as well. Understanding what is going on in their

minds and causing them to make the decision to spend money can send them on a downward

spiral of debt, being broke, or even send them into a state of depression. There are five stages in

the decision making process. These stages make consumers act in the way that they do when

making a decision. What is shown below in Fig.1 is the five stages of the consumer decision

making process.

(Solomon)
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Need recognition is the first stage in the decision buying process and is defined as The

consumer experiences a significant difference between his or her current state of affairs and

some desired state. Once a need has been activated, there is a state of tension that drives the

consumer to attempt to reduce or eliminate the need. (Solomon)

This stage can be considered utilitarian or even be considered hedonic, and that easily

leads the consumer into the second stage which is the information search stage. In this stage, a

consumer has already activated their need, is actively searching for a way to eliminate or reduce

it, and at this point has a one track mind about the product or service that they want to fill their

needs or desires.

A poor decision on the consumers part or once they run into the realization of how

expensive a product is can eventually contribute to causing negative affects on the consumer and

send them spiraling straight into the third stage, which is known as the evaluation of alternatives.

This stage is presented as helping the consumer to narrowing down their options to find

the cheapest price for the product they are looking for. They want the best deal, the cheapest

price, and they wont settle until that desire for the lowest price item is fulfilled.

Once they find the deal they are looking for and at the price they desire, they step into

one of the most important stages in this five stage process, the purchase stage. The purchase

stage is an important stage because the consumer is buying the product and where the

overspending happens.

They are given the good deals, sales, and coupons before the purchase stage which

encourages the consumers to purchase more products and spend more money. Sometimes they do

not even realize that they spent that much money when they do spend it or sometimes they just

do not care and spend money even if they do not have it because they think they can. This, in
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turn, leads to the fifth and final stage the post purchase evaluation. In The post purchase

evaluation stage there is a term that researchers use called CS/D. Consumer

satisfaction/dissatisfaction (CS/D) refers to the attitude that a person has about a product after it

has been purchased. This attitude, in turn, is an important determinant of whether the item will be

bought again in the future (Solomon).

Figure 1 above showed the consumer buying process, and according to author Cara

Baruzzi, between 2 and 8 percent of Americans suffer from "compulsive buying disorder,"

overspending at the mall, online stores and elsewhere, according to the National Endowment for

Financial Education. The disorder "basically is a preoccupation with shopping for unneeded

items and the inability to resist purchasing such items (Baruzzi).

Compulsive buying disorder is a serious problem and it is part of the reason why college

students and young adults are overspending. One way to help curb this disorder is for them to

create and use a budget.

The majority of college students and young adults do not know how to make a budget

and without having a budget, they do not know how to save money and know if they even have

enough money to spend on the things that want, but may not always and necessarily need.

The young adults and college students are also misusing credit cards as a way of

compulsive buying.

By having a credit card or multiple credit cards, these young consumers think they can

just swipe their card, spend money, and tend not to worry very much about the consequences that

follow, such as credit card debt, financial blunders, and a continuous compulsive buying

behavior. College students are a very attractive credit card market because there is a continual

influx of potential credit card owners into this age group every year who may develop into
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lifelong users (Palan,Kay). The reason this age group is considered a target is because they are

new adults and have no concept of saving money and do not know anything regarding a budget.

Most of their money at this young age is going to spending money on credit cards,

applying and paying for student loans that they have acquired or are still acquiring during their

time in college.

A huge percentage of students in college have credit cards as well, and according to Kay

Palan 84 percent of undergraduates have at least one credit card and the average student has 4.6

cards. In the minds of college students, credit cards are associated with spending.

When college students were exposed to a credit card logo when evaluating a product,

they were more likely to quickly decide to purchase, to make the purchase, and to spend more

than students who were not exposed to a credit card logo (Palan, Kay). All these students know

how to do is to spend money because that is all they know and are exposed to.

Since this is all these young adults and college students know, statistics are pretty high

when these consumers are involved in spending money and since these young adults own so

many credit card, an article by Veneta Sotiropoulos shows that these statistics play a part in the

cause of why and how these young adults are out of control with spending money and misusing

credit cards.

In 2004, students owed, on average, $2,900 on credit cards whereas in 2009 this figure

soared by 78% to $4,100. Moreover, young consumers account for the second largest rate of

bankruptcy in the United States (Sotiropoulos, Veneta).

With these consumers being the second largest rate of bankruptcy, this means that there is

significant problem with that is in dire need of a solution. There is a various amount of things

that can be done to help curb the overspending that these young consumers are doing. With the
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solutions to this problem the statistic making college students and young adults the second

largest reason for bankruptcy can start decreasing and help the bankruptcy statistics change over

time.
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Works Cited

Baruzzi, Cara. "'Compulsive Buyers' Find It Hard to Say No." New Haven Register (CT),

14 Aug. 2006. EBSCOhost, search.ebscohost.com/login.aspx?

direct=true&db=nfh&AN=2W62W63396354586&site=ehost-live. Accessed 2 April.2017.

Nicoli de Mattos, Cristiana, et al. "Gender Differences in Compulsive Buying Disorder:

Assessment of Demographic and Psychiatric Co-Morbidities." Plos ONE, vol. 11, no. 12,

12/1/2016, pp. 1-11. EBSCOhost, doi:10.1371/journal.pone.0167365. Accessed 2. April. 2017.

Palan, Kay M., et al. "Compulsive Buying Behavior in College Students: The Mediating

Role of Credit Card Misuse." Journal of Marketing Theory & Practice, vol. 19, no. 1,

Winter2011, pp. 81-96. EBSCOhost, doi:10.2753/MTP1069-6679190105. Accessed 2 April.

2017.

Solomon, Michael R. "Consumer Psychology." Encyclopedia of Applied Psychology,

edited by Charles Donald Spielberger, Elsevier Science & Technology, 1st edition, 2004. Credo

Reference,

http://search.credoreference.com/content/entry/estappliedpsyc/consumer_psychology/0.

Accessed 23 Mar 2017.

Sotiropoulos, Veneta and Alain D Astous. "Social Networks and Credit Card Overspending

among Young Adult Consumers." Journal of Consumer Affairs, vol. 46, no. 3, Fall2012,

pp. 457-484. EBSCOhost, doi:10.1111/j.1745-6606.2012.01239.x. Accessed 2.April.

2017.