B Invested

Falling Into The Trap Of Consumerism

Anyone who has grown up over the last few decades has been conditioned to consume more and more. You must eat at restaurants, take holidays, buy new clothes, new cars, bigger TVs and the biggest house you can afford, filled with designer furniture.

Then you must throw a lavish wedding, spend big on birthday bashes, “treat yourself” to some expensive new shoes and so on.

You’ve fallen into the trap of consumerism and to be fair, it’s pretty hard not to these days.

Not only are humans doomed to want to compete with each other and keep up with the Joneses, but all the things we “need” in life are now made to be updated every year. The new models of smartphones, apps and other devices keep rendering the previous versions redundant, so you need to keep buying them.

And if you choose not to, how are you supposed to function in a world requiring QR code check-ins, contactless payment, photo and video scans, and so on? You have to keep consuming.

But if you’re an average person, chances are you don’t need to consume as much as you do. You don’t need to be defined as a consumer.

Bad habits

Consumers have the bad habit of consuming until their finances run out, and then consuming even more! They can do this thanks to credit cards, personal loans and other debts. Getting into bad debt that requires high interest rates to be paid off, is putting yourself behind the eight ball for life and ensuring you are deeply embedded within the consumerism system; so much so that you can’t save or spend your way out of it.

Warning signs that you are on track for this unfortunate fate include buying things on credit, regularly going over budget, buying more than you intended, mistakenly buying things you already have, hiding purchases from loved ones because you know you shouldn’t have made them and regretting your purchases later.

Get back on the straight and narrow

There are ways to halt the spending momentum so you can put your money to use working for you, rather than you working for your money.

  1. Ditch the plastic: If you’ve got a credit card, get rid of it. One way to get out of bad debt habits is to stop spending imaginary money and then paying it back with interest. Focus on clearing any credit card debt you already have, while only purchasing things you need with the money available in your account.
  2. Stop and chew: You may have heard dieticians encourage problem eaters to slow down their meal and be mindful when chewing and digesting their dinner. This also works with spending. Stop, slow down, make a list of what you need and want and buy them in order of necessity. Rather than rushing straight out to purchase, research best options and deals online and make an informed choice.
  3. Declutter your house and finances: Look around your house, what do you see? A small number of precious belongings that bring you happiness, or a bucket load of crap spilling out of every spare wardrobe? If you are a big time consumer, it will be the latter. Get rid of everything you don’t need, can live without, or that doesn’t bring great sentimental value. By cutting through the crap, you can learn to see what is important with more clarity. This also works for your finances. Check your bank balance and sort the good spending from the unnecessary spending that doesn’t benefit you.
  4. Don’t buy everything: Try renting or borrowing some items rather than just buying them each time. Renting clothes for big occasions is a great example. Borrow books, music and video games from your library. Use them, take them back, you’re not out of pocket and there’s no extra clutter in your house. If you borrow or rent, you are also more likely to put the items to use, than if you mindlessly buy them and leave them on a shelf somewhere.
  5. Imagine you were on your deathbed. What are three highlights of your life? People in these situations rarely nominate buying their TV or a sweet pair of shoes…it’s more about life experiences and the people they’ve shared them with. It’s true what they say about consumer goods…you can’t take them with you when you go. Say you had put that money to use creating an intergenerational wealth vehicle to provide for your kids, their kids, and their kids’ kids…now that would be a highlight.

Which brings us to…

Time to take charge

Now that you’re ready to step off the consumer treadmill, it’s time to put your savings to use. By taking the money you used to put into bad debts like material goods and credit card payments; and using it to acquire good debts like investment properties, you are turning savings into earnings. If you are able to amass a significant property portfolio, creating capital wealth and cashflow, you will be able to live your life the way you want. And you will soon realise that you are permanently “treating yourself”.