From Elizabeth Dunn’s “Happier Spending”
“you’ll get more happiness for your money by following a different principle: pay now, and consume later.” (p. 80)
Prepaying will make you happier because you will get great pleasure from the anticipation and fantasy of the thing you want. Also the pain you get from paying will be long gone by the time you receive the thing you want.
Pay Now, Consuming Later, Will Make You Happier.
- “I think of TripAdvisor as being in the happiness business. We are really upstream in the planning process, and I believe that people derive as much pleasure from that phase as from the trip itself. It’s the dreaming phase, the fantasizing phase, when they think about how great the tapas and the sangria are going to taste.” (p. 83)
- “Marcia Fiamengo paid Virgin Galactic $200,000 for the privilege of spending six minutes in space, but the value of the trip stems in part from looking forward to it. And Virgin Galactic has done a masterful job of maximizing the pleasure of anticipation for its clients.” (p. 82)
- “In a recent experiment, college students chose whether they wanted a Hershey’s Kiss or Hershey’s Hug. They either ate their chosen chocolate immediately or waited thirty minutes. When students had to wait for their candy, they enjoyed it more and expressed more interest in buying additional Hershey’s chocolates.” (p. 88)
- “Asked to choose between attending a concert by their favorite band tomorrow or in two weeks, some 60 percent of people recognized that waiting two weeks would confer the added benefit of anticipation, providing them with two weeks of extra happiness.” (p. 90)
- “In short, delaying consumption can enhance pleasure, but people don’t always recognize the benefits of delay. Even when they do, they may balk at the idea of paying for it.” (p.91)
- “A study that examined another kind of kiss found an apparent exception to our unwillingness to pay for delays. Offered the opportunity to buy a kiss from their favorite movie star, people were willing to pay over 50 percent more to postpone the kiss for three days, presumably to savor seventy-two hours’ worth of thoughts about this fabulous but fleeting experience.”(p.91)
- “Now imagine that you had prepaid for both the taxi and the babysitter the previous week. At the moment you paid, you would still experience the pain of paying. You have to suck it up at some point. But how might prepayment change your evening? The ticks of the taxi meter would be less salient, and the time with your spouse less monetized.” (p. 96)
- “Liz took a related approach to her destination wedding in Mexico, encouraging her guests to spend several days at the all-inclusive resort where the wedding was held. Because the guests paid for their stay months in advance, they could enjoy meals, drinks, and activities without ever reaching for their wallets. At most hours of the day, guests could be found sipping margaritas or mojitos and exclaiming something along the lines of “It’s so tasty because it’s free!” Of course, the drinks were not free (though some ambitious guests did consume enough to keep their average drink cost remarkably low), but because the all-inclusive vacation had been paid for months earlier, they tasted free.” (p. 97)
- “When people pay for groceries with cash rather than cards, they tend to fill their baskets with peaches, granola, and other healthy products. They are less likely to leave with armfuls of impulse purchases like Chips Ahoy and cheesecake.54 Cash makes paying more painful, and this immediate pain undermines the pleasure of cruising the cookie aisle. Delaying consumption provides a similar benefit. People are more likely to make healthy purchases from an online grocer when there will be a longer delay between order and delivery.” (p. 99)
- “While Kayak.com searches the Web for your flight from Toledo to Tucson, the site gives you a real-time update of the work it’s performing (now searching American Airlines . . . now searching Delta . . .). Research shows that waiting can increase satisfaction if customers get the impression that work is being done on their behalf during the delay. This “labor illusion” is so powerful that it leads customers to prefer services that make them wait to services that provide the same quality immediately.” (p. 92)
Other Good Quotes About Prepaying.
Prepay your monthly services. Example: Birchbox mails their customers a surprise gift box of cosmetics each month. Customers are required to pay weeks in advance before they actually receive the giftbox. Customers love the anticipation and trying to guess what’s inside the box. They also feel like what they are getting is free!
Credit cards take the opposite approach of “pay early and consume later.” Credit cards say “consume NOW, and pay later.” This is bad. When people consume now and pay later, they often overspend because they don’t feel the pain of paying right away. Overspending can lead to dept. The joys of consuming right away can not match the pain and stress of dept.