If you regularly pull the plastic out of your wallet for routine purchases, do an experiment: Go to the store to buy $60 in groceries, and pay with cash. It might not seem logical, but handing the cashier those three $20 bills may seem somehow more painful than paying for the milk and bread with a credit card. An economics and psychology professor at Carnegie Mellon University may be able to explain why.

SmartMoney recently highlighted research by Professor George Loewenstein, who monitored a particular region of the brain when people went shopping. His subjects were asked to look at 80 different products. Then they were shown the price, and asked to buy or pass. When they saw the price -- especially if it was too high -- the pain centers of their brains lit up.

Loewenstein told SmartMoney that the experiment bolstered one of his theories about how people make day-to-day spending decisions. Classical economics holds that someone contemplating a purchase weighs the gratification of having the chocolate bar in hand against the gratification of using the same money to go to dinner later. In other words, we make cost-benefit decisions about what we need now and what we need in the future.

Loewenstein suggests that people instead weigh the gratification of purchasing the chocolate bar now against the pain of parting with $1.25 plus tax. This may explain some of our puzzling behavior when it comes to money. We'd rather pay by credit card, because it numbs the pain of immediately parting with our cash. We'd also much rather pay a single monthly rate or a package price for something, instead of spreading out the pain by paying for every unit individually. Some of us just can't bring ourselves to spend money at all, because the pain is too much.

This neuroeconomics research may hold some fascinating insights into human nature and our economic ways. In the meantime, you can harness this research to do a little experimentation yourself.

  • Pay cash. If you're too profligate in your spending ways, put yourself on an all-cash diet. This has long been a favorite tool of the budget-conscious and people trying to escape credit card debt. Now we may know why it works so well. Experiencing more pain while purchasing might be the answer to curbing your overspending ways.

  • Break down monthly costs. You may think nothing of your $75 monthly gym membership or your $15 movie rental fee. But ask yourself: how often do you actually use those services? If you went to the gym twice and rented three movies, you have a different calculus to consider. Did you really want to pay $37.50 for the privilege of riding the elliptical trainer for 30 minutes? Maybe not. On the other hand, a $5 movie rental may easily beat the cost of a theater ticket and popcorn.

  • Don't buy it just because it's cheap. Retailers often lure you with sales, rebates, and other goodies. If you find yourself buying two-for-one bags of cookies or shoes at 50% off, see what happens when you concentrate on the merchandise and ignore the price. Think about having to dust that knickknack every week. Read the calories on the cookie package, and imagine the effect on your waistline. Try the shoes on again to see whether they're really that comfortable.

On the other hand, sometimes you really need to spend money. If you just can't bear to part with your cash, maybe you'll loosen up with a credit card! Kidding aside, a better tactic might be to weigh the respective pains of paying something now or paying more later. For instance, if you're reluctant to pony up the money to replace your roof, imagine the additional cost of water damage if a big storm comes along. If you can't stand the idea of replacing your decades-old running shoes, imagine the medical bills (and actual pain) you could face when your knees give out from pounding the pavement.

To find out more about the tricky ways of emotions and money, see these other Foolish articles:

For more on the funny things credit makes us do, take a look at the Fool's Credit Center. For more hints on squeezing out more money from your everyday purchases, Motley Fool Green Light has answers you can use for big savings. Taking a free 30-day spin is gentle on your brain's pain receptors.

Fool contributor Mary Dalrymple welcomes your feedback. The Motley Fool has a disclosure policy.