Having few friends and feeling alone at work or sad after a breakup can make people more frivolous with their money, according to a new study.
The study found that people tend to put a greater value on money when feeling lonely or rejected.
Hong Kong scientists explain that this is because these people often associate being wealthy with being socially rejected. Therefore, these sad and rejected people often gamble and make riskier, but potentially more profitable, financial decisions as a way to help them fit in, according a study published in the Journal of Consumer Research.
"Seeking social acceptance and maintaining close relationships are among the most fundamental and universal human needs. Consumers are often willing to invest or sacrifice important resources to secure social bonds," study authors Rod Duclos of Hong Kong University of Science and Technology, Echo Wen Wan of University of Hong Kong) and Yuwei Jiang of Hong Kong Polytechnic University wrote in the study.
"In the absence of social support, consumers seek significantly more money to secure what they want out of the social system surrounding them. Feeling socially rejected triggers riskier financial decision-making," researchers added.
Researchers had asked participants to talk about a social situation that made them feel either included or excluded. Then after each anecdote, participants were asked to choose between bets with high odds that offered low rewards and bets with low odds that offered high rewards.
The scientists found that feeling rejected encouraged riskier decisions and that participants who felt rejected or lonely were more likely to choose the risky bet that offered high rewards.
On the other hand, the study revealed that when participants discussed a scenario in which they felt happy and accepted, they were more careful about making their financial decisions.
"Given the necessity of balancing between risk and financial reward in many important financial decisions (saving for college or retirement, deciding how to pay for health care and insurance, investing in the stock market), understanding how consumers trade risk for reward could help them make more informed decisions," researchers wrote.
"For example, consumers might choose to delay important financial decisions following a breakup or a falling out with friends, colleagues, or family," the authors concluded.
Published by Medicaldaily.com