1828: The Science of How We Spend

So Money with Farnoosh Torabi

Farnoosh Torabi

Entrepreneurship, Business

4.7 • 1.9K Ratings

🗓️ 19 May 2025

⏱️ 28 minutes

🔗️ Recording | iTunes | RSS

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Summary

Ever wonder why we take on debt knowing it will cost us — or why flashing a credit card can feel like flashing status? It’s not just poor math or bad habits. It’s biology, psychology, and marketing, all tangled together.

In today’s episode, we unpack the psychology of spending with Wright State University professor and author John Dinsmore, whose new book The Marketing of Debt: How They Get You breaks down the subtle — and not-so-subtle — ways marketers capitalize on our optimism, impulsivity, and desire for status.

We talk about:

Why your brain underestimates the pain of future debt
How credit card companies brand products to play on our egos
Why handling money can make us less generous
The hidden costs of “quiet luxury” and keeping up appearances
And how Dinsmore’s own research found that just touching $20 bills increased testosterone and reduced charitable giving

Transcript

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0:00.0	Are you ready to take control of your finances and build the life you've always dreamed of?
0:07.3	I'm Jessica Morehouse, a Canadian money expert, accredited financial counselor, bestselling author, and host of more money.
0:14.4	Each week, I bring you inspiring interviews and practical advice to help you make smarter financial decisions.
0:22.1	Tune into more money on your favorite podcast platform and let's start your journey to financial empowerment today.
0:29.7	So Money episode 1828, The Psychology of Spending and Why Our Brains misunderstand debt.
0:38.5	You're listening to So Money with award-winning money guru Farnush Torabi.
0:43.4	Each day, get a 30-minute dose of financial inspiration from the world's top business minds,
0:48.7	authors, influencers, and from Farnoose yourself.
0:52.7	Looking for ways to save on gas or double your double coupons?
0:56.5	Sorry, you're in the wrong place.
0:58.7	Seeking profound ways to live a richer, happier life.
1:02.1	Welcome to So Money.
1:04.9	If you look around now at credit card offers,
1:07.0	you will see a lot of like free paid credit cards
1:10.2	or higher interest credit cards for
1:11.9	people with lower incomes that are branded platinum and diamond and all these things.
1:17.6	And what researchers have found is that when someone has, particularly someone of lower
1:24.1	means, if they have one of these status branded cards, they like to
1:28.1	use them more often in front of other people whose opinion they care about and they tend to spend
1:33.4	more as a result. Welcome to So Money, everyone. I'm Farnoush Tarabi. Ever wonder why we take on debt
1:40.5	knowing it's going to cost us? Or why flashing a credit card at dinner with friends can feel
1:46.2	like flashing status. It's not just bad math or bad habits. It's biology, psychology,
	...

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