Are you saving too much? You might regret it!
In an economic recession, most of us are looking to save more money, not less. But according to consumer psychologists from Harvard and Columbia University, this "overcompensation" can lead to a psychological hyperopia (the medical term usually used for farsightedness, opposite of myopia) where one becomes too worried about the future instead of living inthe present.
This is because obesession with planning for the future means that you aren't enjoying the power of now, which according to Eckhart Tolle anyway, is where all the magic happens. And as the NYT quotes Dr. Kivetz of Columbia University:
Splurging on a vacation or a pair of shoes or a plasma television can produce an immediate case of buyer's remorse, but that feeling isn't permanent, according to Ran Kivetz of Columbia University and Anat Keinan of Harvard. In one study, these consumer psychologists asked college students how they felt about the balance of work and play on their winter breaks.
Immediately after the break, the students' chief regrets were over not doing enough studying, working and saving money. But when they contemplated their winter break a year afterward, they were more likely to regret not having enough fun, not traveling and not spending money. And when alumni returned for their 40th reunion, they had even stronger regrets about too much work and not enough play on their collegiate breaks.
"People feel guilty about hedonism right afterwards, but as time passes the guilt dissipates," said Dr. Kivetz, a professor of marketing at the Columbia Business School. "At some point there's a reversal, and what builds up is this wistful feeling of missing out on life's pleasures."
But finding the balance between 'living now' and 'investing in your future' is a sensitive and somewhat subjective scale. Some people prefer to indulge in the present, while others will always prefer the simple and frugal. As active consumers, how do you find the balance between having 'fun' while staying within a budget of what you can afford, and saving for the future without bankrupting the rainy day account? Let's hear your thoughts.
Oversaving, a Burden for Our Times [NY Times]
Original Paper [PDF]