Why People Spend Money
Because I've been creating a website on frugal living I've been thinking about unhealthy reasons why people spend money. If you can think of any others can you let me know in my comments please. Here are some of my preliminary thoughts.
1. Comfort. I think that this is a huge reason why people spend money unnecessarily. Of course there are many sub-reasons that would fall under this but it seem that comfort is a major reason for waste. I'll examine the sub-reasons:
a. Convenience. There are so many items created for people so that they can do a little less work. From convenience foods to disposable dishes. We should evaluate our purchases and decide whether the added cost is really worth the convenience that it gives us. We should also evaluate whether convenience has other hidden costs like cost to environment.
b. I deserve it. We all used this excuse before. After a hard day at work we justify some expense by declaring that we deserve it. I included this under comfort because I believe that people use this excuse to comfort themselves when they are stressed.
c. Nicer Items. This comfort category would include things like new furniture because our old ones are "ugly". People justify these purchases by saying that they feel better when they are surrounded by nice things. This category is closely related to the last category. Often people will use both excuses for the same purchase.
2. Entertainment. This is a huge area of expense. Everyone needs some leisure time but people justify all sorts of expenses in the name of leisure. Really, there is no reason to spend money on leisure. Anybody can take a walk or read a book. People like treats and the more expensive leisure activities are more fun.
3. Social Customs. All sorts of socials rules dictate that we spend money. Consider the norms for dating or Christmas. People feel very bound by these arbitrary rules. We need to break away from tradition and allow our priorities dictate our spending habits.
4. Keeping up with the Jones'. Many people are driven to spend because they are afraid of looking like less when compared to their peers. Everybody recognizes that others do this but it's harder to identify in ourselves because it can be subtle. This can in I've seen this pressure on myself with regards to buying thing for kids such as new books and learning toys. I've felt like if I didn't buy these things I wouldn't be as good a mom as others. Advertisements feed this anxiety all the time.
5. Trying to fill an inner void. A lot of people shop because they feel depressed. Advertisements tell us that new things can make us happy. For a lot of people there is a short pleasure associated with getting something new.
I don't think that my list is exhaustive but I think that it covers the most of the main reasons that people spend.
Posted by rose at March 2, 2005 01:25 PM
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