The psychology of spending, debt and budgeting, with Abigail Sussman, PhD

The podcast explores the psychology behind spending habits, focusing on why people overspend and struggle with financial decisions. Dr. Abigail Sussman, a marketing professor, explains that buy now pay later services lead to increased spending because they make purchases seem more affordable by highlighting the initial payment rather than the total cost. People also fail to accurately budget for unexpected expenses, often underestimating their spending because they don't account for irregular costs. Retailers exploit psychological biases by presenting products as necessities, offering limited-time discounts, and using AI to target consumers with personalized ads. Additionally, social comparisons exacerbate conspicuous consumption, as individuals focus on visible spending rather than savings and debt.