The Psychology of Spending

Why, exactly, do we spend so much money on consumables?

I saw stephanerd’s blog post about her trouble dealing with her overspending and it brings to light an issue in how consumers - at least US consumers - view spending money.

US consumers have been pounded for decades with advertising and television programs that tell them they need more to be happy. That they are not metaphysically worth as much as the people they see on television because the clothes they wear are older, the car they drive is less luxurious, and their house is less ostentatious. Salaries have not kept pace in the United States with inflation, and education of consumers has dropped. Although the United States boasts one of the best educational systems in the world, many college graduates hold a degree that means nothing. How many communications majors or philosophy majors were actually interested in those subjects entering college? How can a person expect to earn a major salary with an education they probably weren’t too interested in?

But, I’m digressing from the point a bit: US consumers (and they are even labeled as ‘consumers’, not ‘citizens’, ‘residents’, or ‘natives’) are told from birth that they need expensive things to be happy, and they have no real way to earn the money that’s needed to support that lifestyle. To earn really big money, it takes a lot of work, some abnormal creativity and a bit of luck. It also takes time, which is what nobody wants to invest.

Thus, we find solace from our pain by spending, because that’s what we’ve been told will make us happy. And we rarely buy things that will invigorate us, most people do not buy a new book to read to make themselves feel better, they go to an expensive dinner or buy a $300 pair of shoes. Neither of these will make us financially independent, which is what we really want. So - as dysfunctional as it is - we spend money because we want to be rich.