Despite flat overall retail sales in July, sales of personal care items increased 0.4 percent reflecting a financial behavior pattern known as “Tiny Treats”. 

Although overall retail sales were flat in July, consumers increased spending of personal care items by 0.4 percent in the same month.  The increase in spending on “Tiny Treats”, such as personal care items, during times of higher money anxiety is a known phenomenon in behavioral finance.  The flat retail sales in July mirror the increase in the level of money anxiety among consumers.  The Money Anxiety Index increased 1.1 index points from 71.6 in June to 72.7 in July.  

This behavioral pattern is known as “Tiny Treats” in behavioral finance a.k.a. behavioralogy.  When the level of money anxiety increases, consumers compensate themselves with tiny treats, such as personal care items, which increased 0.4 percent in July, as a substitute for not buying more expensive items such as cars, which decreased 0.2 percent in the same month.  

Behavioralogy defines six types of financial behaviors consumers exhibit during high, average and low levels of money anxiety. Consumers modify their financial behavior relative to the economic conditions they are anticipating or currently facing.  The six financial behavior types described in the book Money Anxiety are: Mattress Money, Durable Diet, Power Play, Tiny Treats, Rate Race and Castle Craze.



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