Here's How Your Brain Justifies Big Purchases

Maybe cartoonist Sarah Andersen speaks for you in her popular comic "How I Spend Money." Her protagonist sensibly mediates her spending on groceries, clothes, and household items, but at the bookstore, she makes it rain. Researchers have pinpointed the part of your brain that can scrimp on little things but splurge on big purchases, and it turns out that primates like us are kind of bad at scale.

Neuroscientists at Washington University in St. Louis set up an experiment by tempting monkeys with their favorite kinds of juice. While hooked up to monitoring equipment, the monkeys had to choose between different combinations of juice — grape versus apple, for example, or three grape juices versus one apple juice. Two sets of neurons in the area just above the eyes fire off during the decision-making process, each one relaying how great the monkey's interest in each option is.

It turns out that your neurons fire faster when you value something more highly. This can increase when you consider something more valuable — say, a new pair of designer shoes versus different types of bubble gum — but only up to a certain point. There's a speed barrier our neurons can't break, which means we may cheerfully make decisions about add-on features in a new car as we do when buying a new computer. If we're already spending a lot of money, larger additions don't seem that concerning, even if we wouldn't consider those purchases separately.

All that means is that if you are planning a big purchase, plan ahead and budget as much as you need to. Even for in-the-moment splurges, take a step back and remember that money doesn't stop being real after a certain threshold. Your brain may skip over the distinction between $1,000 and $1,300, but your bank account certainly won't.