When you get an increment, you get used to the new salary and you suddenly feel that you are underpaid 3 mths into your increment. Or you say that I'll be happy once I get X pay and when you hit that pay, suddenly it doesn't seem as much as you thought it was. Same as a bank account. I'll quit when I have X million dollars. And when you get used to X million dollars, it seems like X million dollars isn't quite enough.
Here I'll talk about some complaints in Singapore. But the theory can be used on numerous other scenarios.
1) Cab prices
Cab prices rise almost every year. There was a particular year when prices rose by a large amount across all taxi companies and many people stopped taking taxis for a period. I suddenly felt that cab prices were too expensive and decided that I would only take cab when I really needed to. Well, 2 weeks after the announcement, I really needed to take a cab. So I got into a cab and took a very expensive cab ride. I was talking with the driver and he said that business dropped since the prices were adjusted upwards. Few days later, I really needed to take a cab again and I took another cab ride... Long story short, after about 10 really urgent required cab rides, the price seemed normal. People were starting to take cabs again as normal. No one really remembers the feelings of frustration during the days when the fare was revised upwards.
2) ERP increases (This is a toll on our expressways to redirect traffic during peak hours)
Similar to the above. ERP charges increases annually. You can always choose to wake up earlier to avoid the charge. It can be free if you wake up early enough. Otherwise it can go up to SGD10 as you might need to pass through 3 gantries before reaching your workplace. When prices go up, people are all up in arms, some decide to wake up earlier to avoid the toll. Every once in awhile, they over sleep and get hit by a larger toll. Maybe it's a special day or they worked late yesterday. They decided to sleep in a bit more. What's 1 day of paying the higher toll fee. Well, 1 day became 2 days and soon waking up late everyday seems to be normal and the increased toll fee is now a normal daily expense to be included in the monthly expense.
3) Poor service quality
Another example. I'm sure you start to understand how hedonic adaptation works. There are some restaurants which give poor service quality. But their food is cheap and it's convenient. I might go once. Maybe there's no alternative. It's near my work place. I get used to their poor service standards. Service staff are grumpy. Oh well. Its cheap and its near my workplace. Well guess what! This increases my tolerance to POOR SERVICE QUALITY AS A WHOLE! Meaning, now when I go to many other restaurants, I actually accept poor service quality. Unless the branding of the restaurant is on service and quality and charge exorbitant prices for their food. Then my expectations would be raised. But for the generic restaurant/ food court, poor service quality seems to be the norm and Singaporeans readily accept it. Furthermore, it seems acceptable for a place serving good food to show poor attitude to customers. We have cases when customers are refused another empty plate to share food with their family. Or chefs telling customers off "If you can't wait then don't eat!". I doubt these eateries would survive long if they set up shop in other countries who value service quality and have people who respect themselves more. If someone shows you this kind of service or shows someone else this kind of service, a self respecting person would boycott these shops as I'm sure that there are other places to eat. Have we become a society respect and honor have given way to efficiency and convenience? I think so...
This concept is very interesting. Cos once we get used to the new normal, anything else is considered better/worse.
There was a period when I really liked to pamper myself going for buffets at about SGD100/pax. I went weekly for a whole month, when the credit card bill came, the first thing that crossed my mind was WHAT THE HELL!!! The bill was larger than normal. I was so used to eating buffets on a weekend that it became a habit and spending SGD200/week was normal. I immediately thought, "this has to stop". I did not go for buffet the next week. After 2-3 weeks. I did not have the desire to gorge myself on lobsters anymore.
Here's the risk... I've always been an advocate of balance. Sure you don't remove all desires. And you can always pamper yourself once in awhile. As I've mentioned many times, we're here to be frugal but also live a good enough life when we have the money to spend but to control our desires so that we keep a good lifestyle. However, pamper yourself today, then pamper yourself 2 days later, then maybe on the next weekend. Be it a massage for the first day, manicure for the 2nd day, nice dinner on the third day. It soon becomes normal that you need to pamper yourself on the next day with another activity. And there are so many other activities which you can pamper yourself with. So bear in mind. I can't control your life. But it would be good to take note of how your mind works. That it gets used to the good things really quickly and expects that as the new normal. It also accepts the bad fast and takes it as the new normal.
Same as spending on branded products. Most people start off with a small reward for themselves. Maybe a SGD300 wallet. Not really expensive. It's pretty affordable in Singapore. Doesn't take much to save up for one. But it IS more expensive than other wallets which provide the same purpose. Oh well. Maybe it's your birthday. Treat yourself nice for once. So you buy the SGD300 wallet. Oh guess what. bonus is around the corner. Hmmm that SGD450 leather clutch looks sophisticated. It's only SGD150 more than the wallet which you bought 6 mths back. What the heck you deserve it. You worked so hard for this year to get this bonus. Eventually the next purchase might be SGD600, then SGD800 then SGD1000, then the pattern goes on. Many people get a kick out of spending. It gives them a fuzzy short term happiness that they have made themselves happy. What many don't realise is that the mind gets used to this drug. And it now takes a larger amount to get the same kick that it once provided. "I'm not treating myself as good as last time. I already have a SGD1000 handbag. I need deserve something better".
Well now you know.
The human mind works in strange ways and getting a control over your feelings/emotions and psychology is a good way to understanding yourself and how your mind plays games on you and affect how you think. It's good to be aware and be able to prevent your mind from hurting your planning for early retirement.
I admit hedonic adaptation on my end. I have been unwilling to drop my car. I have been thinking of excuses to keep it. When I should be thinking of methods to sell it. It is my greatest sin. Having a car to drive around on weekends have become the new normal for me.
(Weekend/Off peak car is a concept in Singapore where the owner can only drive the car on weekends and public holidays. They get certain rebates for signing up for this scheme which will lower the price of the car. I moved to this scheme as I did not want to drive to work and part near the city area during my office hours costing SGD200/mth. I do not use the car for work purposes so it is an absolute waste on weekdays.)
MMM also has an article on hedonic adaptation here.
After learning about hedonic adaptation does it suddenly bring forth situations where you have been down this slippery path? Have you gotten used to something and now that becomes the new norm where you previously did not need such a luxury? Share in the comments below and we learn from each other not to be fooled by our own minds.