A while ago I posted a video by my favorite behavioral economist Dan Ariely about the pain of paying. Now I've come across an article by Elizabeth Dunn and Michael Norton that is related to said video. In "Happier Spending", they argue that "...we derive greater happiness from goods we pay for immediately, but don't use for some time, than we do from goods we use now but pay for later." Or as I like to call it: prepaying for happiness :-)
There are mainly two reasons for why this works. First of all, it doesn't take away the pain of paying, which helps you to not overspend as you might be tempted to do if you can delay payment until after having used/enjoyed the purchased good/service.
There are mainly two reasons for why this works. First of all, it doesn't take away the pain of paying, which helps you to not overspend as you might be tempted to do if you can delay payment until after having used/enjoyed the purchased good/service.
Just as the sensation of burning tells you to pull your hand from the stove, the pain of paying can keep spending in check. This isn't just a metaphor. Paying high prices for goods and services activates the region of the brain associated with the anticipation of actual physical pain.