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Episode 032: Are You a Spendthrift or a Tightwad? with Dr. Scott Rick

June 6, 2018

Spendthrift or tightwad?

Take a 5-minute survey to see where you fall on the Tightwad-Spendthrift Scale.

How do you feel about spending money? Does it give you a thrill or fill you with anxiety? My guest, Dr. Scott Rick, an Associate Professor at University of Michigan’s Ross School of Business, has dedicated his research to understanding the emotional causes and consequences of these feelings.

After observing evidence that a pain center in the brain of “tightwads” was activated by the thought of spending money, Dr. Rick and George Loewenstein, his graduate school advisor, created the Tightwad-Spendthrift Scale. This survey tool measures where people fall on this spectrum. Recently, the scale was adapted for children.

In this episode, Dr. Rick shares what it means to be a tightwad or a spendthrift. Who’s happiest? We discuss where our feelings about spending come from and how/when they are developed. Dr. Rick shares research he recently conducted to see where children ages 5-10 fall on the Tightwad-Spendthrift Scale and provides some tips for parents.

We also discuss how these dynamics work (or don’t) in partner/spousal relationships (see his writing on Fatal Fiscal Attraction) and he gives a preview of his upcoming research exploring the successful bank account structures of married couples.  

Follow Dr. Rick on Twitter.  

Topics discussed in this episode:

  • How the Tightwad-Spendthrift Scale came to be (2:56)
  • Couples and “fatal fiscal attraction” (9:00)
  • The Tightwad-Spendthrift Scale for children (14:15)
  • How can parents use this information? (17:04)
  • Does your place on the Scale translate to other areas of life? (22:20)
  • The emotional component of your place on the Scale (22:34)
  • Gift giving and receiving for Tightwads vs. Spendthrifts (25:15)
  • Final advice for parents (27:56)
  • Who’s the happiest—Tightwads or Spendthrifts? (31:25)
  • Dr. Rick’s resources (32:30)
  • What’s next? (33:26)
  • Bonus questions (35:07)
  • The wrap up (41:55)

Guest Bio:

Dr. Scott RickScott Rick is an Associate Professor of Marketing at the University of Michigan’s Ross School of Business. Rick received his Ph.D. in Behavioral Decision Research from Carnegie Mellon in 2007, and he then spent two years as a post-doctoral fellow at Wharton. Rick’s research focuses on understanding the emotional causes and consequences of consumer financial decision-making, with a particular interest in the behavior of tightwads and spendthrifts. The overarching goal of his work is to understand when and why consumers behave differently than they should behave (defined by an economically rational benchmark, a happiness-maximizing benchmark, or by how people think they should behave), and to develop marketing and policy interventions to improve consumers’ decision making and well-being.

Notable & Quotable:

Through a fMRI, we found neuro evidence of the pain of paying. —Dr. Scott Rick #successfulgenerations


Tightwads don’t love saving; that’s called frugality. Instead, they experience so much anxiety and distress that they can’t spend and they don’t like it. —Dr. Scott Rick #successfulgenerations


Whether you are a tightwad or a spendthrift, the extremes of the scale are unhappy. —Dr. Scott Rick #successfulgenerations


Research suggests that feelings about spending money develop early. Genetics, role modeling of parents, and socialization all play a role in this. —Dr. Scott Rick #successfulgenerations


Spendthrifts can look at opportunity costs—if I spend now, what am I giving up later? —Dr. Scott Rick #successfulgenerations


What kind of spending are you modeling for your children? —Dr. Scott Rick #successfulgenerations


Resources mentioned in this episode:

  • Tightwad-Spendthrift Scale
  • More about Dr. Scott Rick
  • Collection of Articles Written by Dr. Rick
  • Dr. Scott Rick on Twitter @scottianrick

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Want more of Successful Generations? Check out our other episodes: 

Episode 031: Impact Investing with Jennifer Oertel
Episode 030: Holistic Weight Management with Cynthia Damaskos
Episode 029: Giving Back Through Giving Circles with Dr. Jason Franklin
Episode 028: The Family Business Podcast with Russ Haworth
Episode 027: The Power of Mindset with Dr. Nancy Jonker
Episode 026: Reflections from Four Decades in Philanthropy with Rob Collier
Episode 025: Power20—10 Ways to Set Your NextGen Up for Success in the Family Enterprise
Episode 024: Pump it Up! Strength Training and Leadership Development
Episode 023: Leadership Development and Agility with Greg McCann
Episode 022: Getting Started in Philanthropy with Colleen Mitchell
Episode 021: Taking Over the Family Business with Mitchell Kaneff
Episode 020: Women and Wealth w/ Adrienne Penta
Episode 019: The Allyn Family 2.0, Part 2
Episode 018: The Welch Allyn Family Business Story with Eric Allyn (4th Gen), Part 1
Episode 017: Achieving Your Goals through MasterMind and Peer Groups
Episode 016: Reframing Limiting Beliefs with Ellie Frey Zagel
Episode 015: Beyond the Piggy Bank with Father, Author, and Entrepreneur Clint Greenleaf
Episode 014: More Awareness and Less Stress through Yoga
Episode 013: Raising Children to be Amazing Business Owners with Paige Cornetet
Episode 012: Generous Genes with Susan Crites Price
Episode 011: Digging into the Family Business Landscape with Daniel Van Der Vliet
Episode 010: 10 Things My Family Did to Engage us in Family Philanthropy
Episode 009: Stress Management and Holistic Health with Cynthia Damaskos
Episode 008: Family, Fights and Ferry Tales with Chris Shepler
Episode 007: Raising Financially Responsible Kids Through the Holidays (and Beyond)
Episode 006: Join the Philanthropic Revolution with Michael Moody
Episode 005: Estate Planning 101 aka Estate Planning is Not Optional with Susan Gell Meyers 
Episode 004: Ginny Esposito – Engaging your Family in Family Philanthropy
Episode 003: Leadership, Wellness, and Concierge Medicine with Dr. Bill Baer
Episode 002: Douglas D Box, Texas Patriarch – A Legacy Lost
Episode 001: About Your Host Ellie Frey Zagel

Learn more about Successful Generations:

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Twitter: @EllieFreyZagel
Email: ellie@successfulgenerations.com
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If you are the next generation of family business, philanthropy and wealth, and have a topic you think we should discuss, let us know at Ellie@successfulgenerations.com.

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Family Wealth

Ellie Frey Zagel

Ellie Frey Zagel is 3rd Generation, Vice Chair and Trustee of her family’s foundation the Frey Foundation based in Grand Rapids, MI. For nearly a decade she has been deeply involved in working with the next generation of family business, family philanthropy, and family wealth, first as Director of the Family Business Alliance and now as President of Successful Generations, a company she recently founded.

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