If clients are splashing out on extravagant purchases there could be a simple solution if they are in a relationship – a joint bank account.
A new study from the University of Notre Dame’s Mendoza College of Business found that when couples have shared finances, wasteful spenders are more likely to curb their behaviour to avoid having to justify expenses.
“We found that this spending pattern was not a one-time occurrence,” said Emily Garbinsky, the college’s assistant professor of marketing. “People made these decisions over and over, which resulted in thousands of dollars spent.”
The pooling of finances with a joint account is generally motivated by convenience and a feeling that ‘it’s the right thing’ when in a relationship.
“We show that although the perceived need to justify spending is not an antecedent of the decision to pool finances, it does represent an important downstream consequence of the decision to pool, which subsequently influences purchase decisions over time,” added Garbinsky.
The study found that among those with joint bank accounts, spending on hedonic purchases such as vacations, alcoholic beverages and beauty products was reduced, while they spent more on items such as insurance, electricity, and gasoline.
Emily Garbinsky, assistant professor of marketing in Notre Dame’s Mendoza College of Business
Credit: Barbara Johnston/University of Notre Dame
“Our findings suggest pooling finances may be one simple way to spend money more responsibly,” Garbinsky concluded.
The full study “The Consumption Consequences of Couples Pooling Finances” is published in the forthcoming Journal of Consumer Psychology.
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