The role of consumer spending self-control in the relationship between psychological needs and well-being

Abstract

Many South African consumers struggle to make ends meet and consequently spend beyond their means. Although consumers try to cut down on their spending in an already challenging economic environment, higher levels of expenditure are still evident, with reports attributing a lack of self control over spending behaviour as a major culprit. Therefore, consumer spending self-control (CSSC), which regulates spending thoughts and behaviour, served as the primary focus of this study. Consumers differ in terms of their CSSC, with some being better able to control their spending than others, thus influencing their well-being. Determining which factors influence people’s CSSC, and the resulting impact on well-being, prompt the need to explore this relationship further.

The self-determination theory (SDT), which is a theory of human motivation, provided the theoretical underpinning for this study and specifically incorporated psychological needs and well-being as SDT elements. The theory examines the interaction between extrinsic forces, intrinsic motivations as well as the way people regulate their motives, emotions and impulses, with the ultimate aim of influencing well-being. Putting it into context for this study, SDT provides the theoretical foundation for understanding how psychological needs, as well as extrinsic and intrinsic sources, influence people’s regulatory behaviour (i.e., CSSC in this study), and the resulting influence on people’s well-being. Therefore, the primary objective of this study was to explore the role of CSSC in the relationship between psychological needs and well being.

Three secondary research objectives were set and addressed in article format in three separate chapters. The first secondary objective explored the moderating effect of aspirational goals on the relationship between psychological needs and CSSC. The second secondary objective studied the roles of CSSC and financial vulnerability in the relationship between psychological needs and financial well-being. The third secondary objective investigated the roles of financial well-being and relative deprivation in the relationship between CSSC and life satisfaction. This descriptive, cross sectional study collected data using an online self-administered questionnaire distributed to South Africans who were credit active, 18 years or older, either permanently employed or self-employed. Respondents who adhered to these specific boundary conditions were sourced via a Qualtrics online paid-for consumer panel. Although 628 respondents participated in the study, a total of 608 respondents were subject to analysis. Mplus Version 8.3 was used for structural equation modelling, and Hayes’ Process Macro for SPSS Version 3.5 was used for testing moderation and mediation effects.

The results showed that psychological need satisfaction was positively associated with CSSC and financial well-being. CSSC also had a partial, complementary mediating effect on the relationship between psychological need satisfaction and financial well-being. Although the relationships between psychological need frustration and CSSC, and psychological need frustration and financial well-being did not show significance, CSSC had a partial, complementary mediating effect on the relationship between psychological need frustration and financial well-being. Furthermore, although CSSC was not significantly related to life satisfaction, financial well-being was partly responsible for the relationship between CSSC and life satisfaction. Finally, relative deprivation had a moderating effect on the relationship between financial well-being and life satisfaction, with high levels of relative deprivation having a stronger moderating effect on the relationship between financial well-being and life satisfaction.

The main theoretical contribution of this study is the advancement of CSSC literature, with CSSC acting in a regulating capacity in the SDT context. Based on the study results, several practical recommendations have been suggested. These include using psychological need satisfaction/frustration as segmentation bases, developing product/service offerings to assist consumers with CSSC and designing marketing communication messages emphasising that CSSC contributes to greater financial well-being and overall life satisfaction.

Inspired by the transformative service research (TSR) movement, which encourages service organisations to explore ways in which the well-being of people can be improved, this study strived to provide a better understanding of how CSSC can advance people’s well-being. Recognising that many South Africans struggle to control their spending behaviour, financial institutions, retailers and other service organisations can use the insight obtained from this study to develop products/services to assist people with controlling their spending behaviour, subsequently improving their financial well-being and overall life satisfaction.