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Needs vs. Wants? Explaining the Urge to Splurge

The thought of "needing a new pair of shoes," when you have a closet full of footwear, isn't technically true. Some might even call such a thought irrational. But shopaholics may like to know that a new study excuses the urge for material things, suggesting that what we think we "need" is sometimes beyond our control.

A fascinating article in Psychology Today cites the study, Love or Money: A Common Neural Currency for Social and Monetary Reward. It explains: "people care how they stack up against others. Our ancestors sought ways to look important in the eyes of others long before money was invented. Before humans evolved, apes and monkeys looked for ways to assert superiority over their troop mates. Every generation finds new ways to rise above peers, but the urge to rise is constant."

Or, put another way: Human brains crave social acceptance. If looking a certain way, driving a certain car or living a certain lifestyle means more social acceptance or praise, we literally feel compelled to go after it.

Our primal instinct to "need" things also goes beyond social acceptance to actual survival. "A mammal without a social group quickly finds itself in the jaws of a predator," the article goes on to say. "Brains that sought social support were more likely to survive."

Still, don't let yourself off the hook too quickly: Old neural habits are no excuse for new indulgences. While our brains can rationalize frivolous purchases, they can also make calculations -- and the numbers don't lie. When debating a purchase, compare prices and understand the trade-offs. A new pair of 6-inch stiletto shoes may turn into the talk of a party, but if it means walking home from said party because you could no longer afford a cab ... Ouch.

Farnoosh Torabi is a personal finance journalist and commentator. She is the author of the new book Psych Yourself Rich, Get the Mindset and Discipline You Need to Build Your Financial Life. Follow her at
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