THE BLURRED LINES OF NEEDS AND WANTS
We have too much stuff. We buy and consume too much. The growth of the self-storage industry is a reflection of this. Growth in the size of typical homes, over time, is also a reflection of this. We build and live in ever larger homes, that we fill with more and more ‘stuff’. The advertising-retailing industrial complex has succeeded in steamrolling those desiring minimalism and simplicity. It throws up barriers to those seeking financial freedom.
SLAY THE SUBSCRIPTION VAMPIRE
Growth in subscription-based services can be like a death from a thousand cuts to a savings plan. Or perhaps like a vampire that sucks away your financial blood (money). What seems like only a few bucks a month here and a few bucks a month there, can really add up when you get carried away. Not paying close enough attention to subscription services can quickly cost you hundreds of dollars in discretionary monthly overhead. Examples can include things like Amazon Prime, Netflix, Disney Plus, YouTube Premium, satellite radio, Spotify, Apple Music, cable TV, cell phone fees etc. Such subscription services can easily crowd out money that could otherwise be used for monthly savings. It’s no wonder why so many people say they don’t have any money left over at the end of the month to invest. Or simply live hand to mouth.
The solution, I outlined in a previous article, is to automate your savings, by taking an allocation off the top of each pay period. Invest each month, before you pay the bills for your discretionary spending.
ADVERTISEMENT OVERLOAD
The marketing industry is a machine. Hundreds of billions of dollars are dedicated to this industry annually. It is a masterful hybrid of art and science in shaping consumer behavior. I learned as early as grade 11 about a simple acronym used in that industry; AIDA. It simply means an advertisement needed to create 1) attention 2) interest 3) desire and 4) action to buy. This is a timeless and ever-evolving approach. Marketers are masterful in playing on emotions to get people to buy products and services that they don’t actually need.
Advertisements tug on strings like fear, looking good, being popular, having fun etc. to get consumers to make purchases. It’s the manufacturing of needs. Creating an artificial desire to consume is the key. As someone who is striving for financial independence, you must be aware of these ploys and vigilant in not succumbing to the temptations to buy. The economy revolves around people trying to get other people to part with their hard-earned money.
Advertising tries to stimulate our sensuous desires, converting luxuries into necessities, but it only intensifies man’s inner misery. The business world is bent on creating hungers which its wares never satisfy, and thus it adds to the frustrations and broken minds of our times.
THE SOCIAL MEDIA SLIPPERY SLOPE
With the proliferation of social media platforms, social comparisons have become amped up. In the past, people were often simply trying to keep up with the neighbors next door. Now, however, some social media users are being exposed to and negatively affected by what they see across their entire online social network. The next door neighbors are now global, in terms of social comparison. In the social media realm, users often times only post the best versions of themselves and the best moments of their lives. “Flexing” or showing off only polished multimedia snippets naturally prompts some degree of social comparison among viewers.
Social comparison can trigger unnecessary spending in order to try and “keep up” with others. This may involve purchasing expensive vacations, vehicles, houses, clothing, electronics (i.e. the latest cell phone) etc. That is because social media can sabotage one’s peace of mind and contentment with their own situation. The more time one spends on social media, the greater the influence and temptation to make hedonic purchases.
ASK YOURSELF
There are a few things you can do to resist unrelenting consumerism and falling into the trap of materialism. First, before making any large or expensive purchase, take a pause. Give yourself a day or two to really reflect on whether or not you really need that object of desire before you. Ask yourself questions like: Can I delay this purchase? Is there a cheaper but equally sufficient alternative? Will there be long-lasting utility, benefit or pleasure from this? Could I put this money to more productive use elsewhere, like savings and investing?
You may be surprised how quickly the novelty and pride can fade away from an expensive purchase like a new car or home. Remember too, products are constantly being updated and often improved. Trends change fast. What you own will become old and obsolete faster than you can imagine. Although the marketing world would like you to, it’s very hard to keep up. Keeping yourself running on an hedonic treadmill is exhausting. Frankly, I’d rather put my time and energy into something more productive and enriching.
“We buy things we don’t need with money we don’t have to impress people we don’t like.” — Dave Ramsey
THE BLURRED LINE BETWEEN NEEDS AND WANTS
As noted on Wikipedia, Maslow’s hierarchy of needs is an idea in psychology proposed by American Abraham Maslow in his 1943 paper “A Theory of Human Motivation” in the journal Psychological Review. A graphic illustration of what he deemed our basic needs is illustrated below.
It seems to me that a large segment of the population is trying to meet esteem needs, with consumerism and materialism. Esteem needs seem to hit the glass ceiling of consumerism, that is blocking peoples’ attempts at self-actualization. It is therefore essential to always be self-aware and cognizant of the blurred lines of needs and manufactured wants.
If you want to save and invest money, in the pursuit of financial freedom and flexibility, you must separate your needs and wants. How you allocate your money between the two, will determine your financial future.
When it comes to stuff, it’s time to say ENOUGH ALREADY.