In a society that values bigger and better, and more of it, how can we find balance in order to stay on track with our financial goals? Lifestyle creep can be a big issue, especially with a consumer culture all around us. This constant feeling of not having enough is not only detrimental to our mental health, but to our planet as well.
Listen to the podcast on YouTube or Spotify or read the transcript below!
Hello and welcome back to episode two of Happy, Healthy and Wealthy, the podcast where personal finance meets mindset and intention so we can make our lives just a little bit better. I’m Nicole, and I’m so happy that you’re joining me today. It’s a very cozy day. I feel very cozy in this setup. It’s currently snowing outside, and Christmas is in a few days, and the vibes are good.
I wanted to discuss something that, because of the holiday season and even just year round, I think, is a question that we should be asking ourselves more, and that is, what do you really need? And how much is enough? I feel like, especially around Christmas, because it’s become so consumerized, and even with influencers and brands and companies in our ears every single day telling us that we need this and we can’t live without it, and we need to “run, don’t walk,” to get the latest, trending items. It feels like you can never have enough, and you can’t keep up with it.
There’s always something new to buy, something bigger, better, shinier, and I feel like there’s just so much pressure and so much urgency to constantly buy things. But what I wonder is, is anyone actually stopping to consider if we actually need any of the stuff that we’re buying? In order to answer this question, we need to kind of hop into a time machine and crank it back a bit.
If we look backwards, we’ll probably notice the fact that it was common for many families to be single income households. It’s that quintessential 1950s lifestyle. You know, the man goes to work and then the woman stays home. And I feel like there’s a common complaint or sentiment that, oh, we just cannot live off a single income these days. Like, that would be nice if one of us could stay home, but we just can’t afford to.
And while I’m not going to dispute that things are more expensive now than 70 years ago, and that inflation is definitely shrinking our wallets, I think that our standards and expectations are so far beyond what they were in the 50s, and even as recently as 20 or 30 years ago. Most people didn’t have large houses or go on fancy vacations. There were no cell phones or pilates or Amazon Prime. They didn’t go on Starbucks runs and they definitely didn’t have their dinner Door-Dashed to their door. For many, even just going out to eat was very rare and reserved for special occasions.
I think on the whole what I’m getting at is life was a lot simpler. And I think that that’s the problem. Life has become too complicated, and complicated equals expensive. The idea of a simpler, more intentional lifestyle – that is timeless. And I want to preface this by saying it’s not really realistic of me to come in and say that we should start living like we’re back in the Cold War era.
I do think, however, that it’s important to recognize how generations of our ancestors survived and even thrived without a lot of these luxuries that we have today and it’s extremely necessary to differentiate between our wants and our needs, because we’ve gotten so used to and adjusted to this standard of living that we’ve taken these luxuries and turned them into necessities, unjustifiably. There’s there’s no need to say that we need to have all these things when we simply want them.
And we’ve gotten to a point in society where we’ve advanced so much that it would be nearly impossible to live life without some form of technology, right? I think most people have cell phones, they have TVs, they have a computer, but do you really need multiple of these items? Do you need multiple iPads? Do you need to get a new phone every year? Do you need a TV in every single room?
Do you need to have your McDonald’s delivered to your front door? Can you get by with a gym membership that’s $10 to $20 a month instead of something more expensive? Do you need to get your nails done every two to three weeks? Or is that just something that makes you feel good? Obviously, the correct answer is that, no, you do not need all these things. They are luxuries. They are nice things to have and that we can enjoy within reason, especially when we are trying to reach other financial goals.
And I’m not going to sit here and say that you should completely deprive yourself of everything, but do it within reason and within your budget. If you can afford to do all these nice things that you want to do, and still save and still invest and pay off debt, be debt free: Go for it, because that’s literally what financial freedom is all about.
A lot of us are going to have to choose and make tough decisions about what we spend our money on. You should not be doing these things at the expense of your financial stability and future financial security. Seriously, if you are left with nothing at the end of the month to go into savings or paying off debt or investing in your retirement or putting money towards your kids education, you should not be spending money on frivolous things.
If you don’t have enough money to cover a $1,000 emergency, you should not be going on vacation. If you can hardly afford to pay your rent or buy groceries, you should not be going out and partying on weekends. I don’t say this because I want you to deprive yourself and live a miserable life and have a horrible existence until the day that you die. Obviously, wants are a part of being human, and it’s okay and natural to want things, but it’s about having those wants align with your financial priorities and your financial goals, so that way you’re not sacrificing your peace of mind for a fleeting moment of joy. Because, really, how long are you going to wear that new shirt, that new jacket, those new shoes, and how long are you going to care about them being new before you move on to the next new thing?
And that’s what it all comes down to. Your priorities. You have to put your needs above your wants. And quick refresher, needs are things like food, clothes, housing, utilities, transportation, things like that. Needs are not going out to eat and buying stuff at the mall or on Amazon, unless you’re buying like, I don’t know, a water filter or paper towels on Amazon. Who knows?
You have to put your needs above your wants, no matter how boring or unsexy it may seem. You’re an adult, and it’s your responsibility to make adult decisions, and that includes balancing your wants and your needs with what you can actually afford. And that’s why budgeting is so important, but we’ll get to that.
A common reason so many people feel in over their heads and are living paycheck to paycheck is because of lifestyle inflation. As you make more money, you have a tendency to spend more. And if you can see the problem with that, this leaves very little margin to actually save money. So instead of reaching any meaningful financial goals, you’re just kind of throwing your money away because you’re like, wow, look at how much I have to spend. And if you’re not focusing on your priorities, you’re going to be left with nothing, even though you’re making more than you ever were.
The percentage of your money that is spent is known as the average propensity to consume, otherwise known as APC. It’s possible that this number can shoot up over 100%. So what does that mean? It means you’re living above your means. If you are spending more than 100% of what you make, of what your income is, then you’re going into debt, and that is no way to live.
It’s very, very easy to fall into the trap of lifestyle inflation or the Big Creep. And this is especially true when you don’t budget or have financial boundaries. A dinner out here or there may not seem like a lot until you add it all up, and budgeting helps you keep track of these expenses and sets limits on your spending. So it’s not in a restrictive way but in a protective and freeing way.
Establishing financial boundaries with yourself and the people around you, because both are important, okay, will also help you avoid the Big Creep. Learning how to say no, living within your means, and also learning to not care what other people think of you are going to save you so much money.
Trust me, your financial security is worth a lot more than cousin Jake thinking that you’re rich because you financed a car that you can’t actually afford. And what is rich anyway? I think that that answer varies from person to person. Everyone is going to have a different definition of what that means for them. But for me, I want to have time freedom and financial security. I don’t need to have fancy vacations or driving a nice car. I just need time to do what I love, not have to worry about paying bills because I know that they’re going to be paid, and not being in debt, because that’s very stressful.
There is so much pressure to consume that it’s exhausting. It seems like over consumption has become the backbone of America. Walk into almost any home and you’ll find stuff and things takingup counter space, crammed into closets, stuffed into drawers, pushed under beds. We buy bigger and bigger homes to hold all of our crap, and then we buy more crap to fill the empty space in our homes.
Not only does this have an impact on our finances, it also has an impact on our mental health and the environment.
Dr Joseph Ferrari, a professor of psychology who studies the psychology of clutter, states that there is a negative correlation between life satisfaction and clutter. It’s stressful, and more clutter leads to more depression and more disorders, which I can totally understand this because anytime my room is a mess, when it’s a disaster, when the house is just feeling cluttered, I get more stressed. I get more anxious. It impacts my ability to get things done. And I think that’s happening to too many people. His interview on “Speaking of Psychology“, an American Psychological Association podcast, goes into more depth, and it’s very interesting. I used this to get some more information, so if you want to check it out, I’ll link to it in the description.
There’s also the effect that this over consumption is having on the environment. The Netflix documentary “Buy Now! The Shopping Conspiracy”, does a very good job of showcasing the impact that over production and over consumption are having on the planet.
So I watched this documentary thinking it was about something else, but I did end up enjoying it, and I feel like it makes so many good points, and I’m now trying to be more conscious of what I’m buying, because just the sheer destruction that it’s caused. This effect extends from companies like Amazon to fast fashion brands like Shein and H&M to technology companies like Apple. It’s across the board. Not only are they using manipulative marketing tactics to get you to spend more of your money, they are generating tons of waste.
A 2024 report states that up to 22 million pounds of Amazon’s packaging waste from 2022 will end up in the world’s waterways and seas. 22 million pounds. That’s just insane to me.
So what can we do? I feel like it’s really hard when you’re just faced with this giant mountain, but I think that the best thing we can do for ourselves is that we need to draw a line. It’s going to be a personal line that’s very different for a lot of people, but there has to be a line where we say, this is enough. I have what I need. I don’t need more. For the sake of our finances, mental health and our planet, we have to say that this is enough.
By defining our priorities and differentiating between wants and needs, we can parse through what’s actually important. If we want more beyond basic necessities, which to be fair, we’re human, and we’re always going to want more, we need to be mindful and act with intention, not just pure emotion.
So because I’m the best ever, and I love you, I’ve got four practical tips to stop over consuming and spending, AKA wasting, so much money, and you can start these today.
The first is to buy second-hand. Facebook Marketplace or thrift stores allow you to save so much money and give new life to a product that’s already made. There are even groups on Facebook dedicated to giving free stuff away. I’m a member of one, actually, and it’s just really amazing to see what people are willing to give away for free. And this is great because we don’t have to spend any more money.
The second tip is, wait at least 48 hours before buying something. I will personally write things down in like my notes app or keep things in my Amazon cart and just not buy it, wait it out a little, maybe two days, maybe a week, sometimes longer, to be honest with you, because I forget about it, and if you forget about it, you probably don’t want it that bad. Doing this reduces waste and also saves space in your home, so you’re not buying things that you’re going to end up not using, and then you’ll have to get rid of it anyway.
The third tip is something in, something out. So I will do this quite frequently. If I’m getting something new, I will find something else to get rid of. So this keeps too much clutter from accumulating. So you’re not just stockpiling things, you’re kind of keeping a flow going. And it also, this is a big thing, it forces you to examine if the thing that you want to buy is worth getting rid of something that you already own. And if the answer is no, then why would you buy it? So, case closed.
The fourth tip is borrow from a friend or family member. If you’re trying to find something really specific that you’re really not going to use that often, maybe once a few times, see if someone you know already owns the same item or something similar that you can use. This is going to save you from having to go out and spend the money to get this item, and then it’s just going to be sitting in your house, taking up space until either you throw it out or you try to recoup your money by selling it on Facebook marketplace, or maybe, maybe you’ll keep it around for the off chance that you’ll need it at some point in the distant future.
So what do you really need? You need to like and subscribe. (I’m just kidding!) I think it all comes down to being mindful, intentional, and practical about what you spend your money on. What that is, is up to you and what you want.
But yeah, that’s it. I’m going to keep this super simple, just be mindful and intentional and practical and sometimes have a little fun, but within your means. So with that, thank you for listening to this episode. It really means a lot to me. I love talking about this kind of thing. I could yap for hours, hence the podcast, although I’m not trying to keep you here that long.
It would be great to start a conversation in the comments. Hear from you guys’ perspectives. If you have any tips, drop them in the comments. I just I want to keep this discussion going. So thank you so much, again. Like and Subscribe, I would appreciate it. And have a wonderful week, and I’ll see you next time. Bye!
Resources:
🎙️ Dr. Joseph Ferrari on clutter and mental health (Speaking of Psychology Podcast)
📺 Buy Now! The Shopping Conspiracy (Netflix Documentary)
🔗Buy Now! How Big Brands are Trashing the Planet (Plastic Pollution Coalition)