Intrinsic and Extrinsic Motivations for How We Spend Money

This post has been in my drafts for some time, but I revisited it again due to The Foot Locker shutdown due to the huge crowds for the latest Yeezy Boost.

Image credit: https://www.straitstimes.com/singapore/footwear-frenzy

Snaking Queues for the Yeezy Boost in Singapore

How much can chasing extrinsic happiness truly fulfil us? Will owning the latest Yeezy Boost truly boost our quality of life? Of course, the answer to whether or not we need the latest and greatest Yeezy Boost is, no. Most, if not all people, will know that. We also know of the high resale value of the newly released Adidas Yeezy Boost 350 V2 Men Originals which retails at $349 on the Adidas Singapore website. Ultimately, the market for the Yeezy Boost is there, regardless of whether it is bought directly or through resale.

However, it is not stopping people from wanting it, to the extent of queuing long hours and spending a good amount on anything limited edition. Singapore is not a stranger to queue cultures after all. Just on the same day, I saw a long queue outside Victoria’s Secret (consisting of young girls and some bored boyfriends) for their sale. Just a stone’s throw away, there was yet another long (reportedly 7 hour long queue) for the Fire Ramen at Cineleisure.

Why Do People Buy Yeezy?

1. Scarcity Value: Yeezy sneakers are intentionally released in small batches, which ups the scarcity value. This means that they sell out quickly, which makes them even more desirable. Companies know this, which is why releasing items in small batches (even though it might not necessarily be the case), is an effective marketing tactic. You probably would have seen it in those e-commerce ads too, with something along the lines of, ‘HURRY, THERE ARE ONLY 10 SLOTS LEFT!’

2. Status Symbol: The sneakers act as a status symbol because of the connection to celebrities. This is the same for any product fronted by celebrities, from Calvin Klein boxers worn by Justin Bieber to Gentle Monster sunglasses worn by K-POP celebrities.

This brought about the thought for me: Knowing how to differentiate between intrinsic and extrinsic happiness.

And this also often informs the way in which we interact with money and where we spend that money.

Intrinsic and Extrinsic Motivations

At the heart of what we do, essentially it boils down to two motivations for doing anything: Intrinsic and extrinsic motivations.

Intrinsic motivation comes from inside of us. For example, I love dancing and it is an intrinsic motivation. It might not make the best financial sense or even be something that pays, but I intrinsically enjoy it. I could dance alone with no one watching and that would make me a happy person. Same as those who sing in the shower. You get the drift. Basically, you don’t care if people see it or not.

Extrinsic motivation is the kind of motivation that is exactly the opposite, it originates in external factors. The obvious things that exemplify extrinsic motivation are things such as keeping up with the Joneses, or have a constant need to be entertained, or to be seen in the latest fashion trends.

Likewise, money can be used to pursue both intrinsically focused and extrinsically focused goals.

Examples of using money to intrinsically build a more satisfied and happy life:

• Using money to treat loved ones to a good meal or holiday to spend time together

• Using money to take extended time off to spend time with family or chase life-long pursuits/passions

• Using money to take time off to actually spend time with your young children growing up, so that you don’t miss out on those precious years that cannot be taken back

• Using money to improve your physical and mental health, which includes eating better, sleeping better, moving better

• Using money to give back to community

Money can also be used as a tool to purchase extrinsically-focused goals. And some prime examples of that are:

• Using money to buy stuff that you don’t need to impress people you don’t care much for

• Using money to buy fancy cars because the neighbour just upgraded (for higher SES folks)

• Using money for that swanky brunch spot with that expensive meal tabs, dressed up in an outfit you bought only for that perfect IG photo

• Using money to buy a much bigger home than you need, filled with more stuff that you don’t need, to show off

• Using money to constantly upgrade to the latest tech gadgets (iPhone 12 and PS5 anyone?)

In general, acquiring bigger toys to display wealth externally.

The key problem that plaques all of us today is the lifestyle creep of chasing extrinsic goals with money for validation. I myself have been guilty of buying Louboutin shoes and Stuart Weitzman knee-high boots in my early 20s, because I thought it would make me happier. I recall at that time that my social circle in JC included some girls who viewed #taitailife as the goal, and always hankered after Chanel 2.55 bags and Louboutin shoes. It is always the fleeting goal of the next purchase which will ‘make us feel complete’. The acquisition of yet another item can fulfil the goal of being momentarily satisfied, but that fleeting moment alas does not last, and we never truly feel complete with yet another acquisition of a material object.

It is even more dangerous to emulate lifestyles of the rich and famous (who have wealth levels in the millions and billions), if one’s networth is not anywhere near that of a millionaire or billionaire.

Today, I always try to practice mindfulness when it comes to spending. The good thing is, like flexing muscles, the more you do it, the easier it gets.

Til the next time!