Home » Blogs » Bipolar Advantage » Your Brain on Spending

Your Brain on Spending

How do you make purchasing decisions? Are you aware of your “moment” of choice, the “click” in the brain, to buy or not to buy? What happens in the moments before your hand reaches for your debit card, cash or credit card?

I began exploring how I make purchasing decisions and became fascinated with my own process in relation to the new field of neuroeconomics, the field of studying the brain circuits behind the financial choices people make!

Take the four-foot head of the Buddha that hangs on the towering wall in my foyer. I looked and looked for a wall piece like this for over two years. I started out with an idea of what I wanted. Something serene, spiritual and a piece of art that spoke to my soul. I began the hunt. I searched the net, visited galleries and many specialty stores. I found nothing that was “just right.” Then, unexpectedly, during the wine and art festival in my hometown, I found it. The moment I saw the Buddha head, I fell in love with it and I knew it was the perfect piece of art I was looking for. My purchase decision took less than a minute and cost didn’t enter into the picture. My “knowing it was the right piece” trumped cost. Then rationalized thought came in, “You will not find another piece that speaks to you so strongly, buy it now, it might not be here later and you will figure out how to make the cost work.” When I reached for my cash and then asked how much it was, I was totally surprised that the cost was under $300. If it had been over $1,000, I still would have bought it. I knew it was the “right” piece.

Now, my purchasing decisions with buying a new purse involves a whole different process. I smell the leather and feel it’s suppleness. Then I try the bag on, see how it hangs on my shoulder, see if it’s the right length with my torso. I found I like the flatter bags best, like the hobo bags or a large black flat bag, simple in design. Once I find a bag that fits my criteria of fit, size and shape, I move on to price. I never look at price first and censor myself that way. I wait to inflict pain on myself.

It’s here, with price where my pain begins. The bag lady inside of my head says, “Is it really worth that much?” “Don’t you think $300 is a lot to pay for one bag?” “Maybe you should buy a bag that’s a repro.” “How important is a bag anyway?” Sometimes, the conversations in my head about price make my head want to explode. The wasted time on indecision and paralysis. I give in to my inner bag lady. I put the bag back, go home and think about it again for days. Sometimes I repeat this dance several times before I actually purchase “the right bag for the right price.”

In researching the field of neuroeconomics, I’m glad to find out I’m not as crazy as I thought I might be when it comes to the way I make purchase choices. At least I understand the “why” behind my purchasing behavior now!

Researchers from Stanford University, Carnegie Mellon and Massachusetts Institute of Technology studied people’s brains through magnetic resonance imaging (MRI) while simulating (via a video screen) possible purchasing choices.

It was discovered three parts of the brain are involved when we make a purchasing decision. When you see something you desire, the limbic system in your mid-brain lights up like a Christmas tree. The greater amount of pleasure you imagine from the object of your desires, the more intense and brighter are the lights on your internal Christmas tree.

The limbic system is part of our primitive brain. It’s the part we share with the animals. The limbic system seeks pleasure and avoids pain. It’s the part of the brain most active in impulsive and compulsive behaviors. The mantra of the limbic brain might sound like this, “I see it, I want it, I buy it.” Your limbic brain cares nothing about the cost or consequences.

Secondly, another part of the brain kicks in, called the “insula.” The insula is beneath the cerebral cortex and is the brain’s emotional pain center. The insula is known as the “tightwad” of the brain. The insula helps you anticipate the pain of payment immediately before a purchase. The more active this part of the brain, the more you are likely to leave the store without the purchase of your desire.

Have you ever gone shopping and placed items in your cart and when all is said and done, you don’t buy a thing that was in your cart? Somewhere between placing items in and taking them out, you talked yourself out of the purchase. That means you have an “insula” that is very active, which means that you have lots of blood flowing to that area. When I go purse shopping, I have an overactive insula!

However, if the price of your desire is less than you expected it to be, a third part of the brain kicks in, which is the medial prefrontal cortex, known as the CEO or the place where rational thought lives. The frontal cortex does a cost benefit analysis.

Researchers have found that if you have more blood flow in your insula, then you will “leave” the purchase. If you have greater blood flow in your mid brain and frontal cortex, you will “make the purchase.” All the while, these three parts of the brain play off each other in making financial choices.

Maybe this new research will help us understand why some people make poor money decisions, like splurging on the present and not saving for retirement. Maybe we will better understand why we are savers or spenders.

Researchers at Carnegie Mellon designed a “tightwad / spendthrift” scale to see which part of your financial brain is most active. Take the survey and see if the results match what happens for you in real life with your purchasing choices!

Take the Carnegie Mellon researchers’ survey here.

Your Brain on Spending

denise k. hughes ma

2 comments: View Comments / Leave a Comment



APA Reference
, . (2019). Your Brain on Spending. Psych Central. Retrieved on October 23, 2020, from


Last updated: 21 Apr 2019
Statement of review: Psych Central does not review the content that appears in our blog network ( prior to publication. All opinions expressed herein are exclusively those of the author alone, and do not reflect the views of the editorial staff or management of Psych Central. Published on All rights reserved.