We live in a consumerist society. Even after a long, painful recession, most of us still feel entitled to consume more than we can actually afford. Over the years, Americans have learned to expect a certain standard of living that previous generations could only dream of. We want more of everything, we want everything to be big and new and shiny, and we love to surround ourselves with every new gadget possible and with daily, expensive luxuries that really add up. Take a look at the following three habits. If you see yourself in that list, it’s probably time to cut back, save more and spend less.
A Sense of Entitlement
We have developed a strong sense of entitlement when it comes to our standard of living. There are certain things we have come to expect, such as a big house with a yard, an SUV as soon as we have more than one child, a big screen TV, and pretty much any new and shiny Apple gadget that goes on the market.
Looking at my own family, we’ve lived for several years in a 2-bedroom apartment, which we loved. It was bright, spacious, had a great downtown location and we loved having a pool and a maintenance guy at our constant service. But then our second child was born, and by today’s standards of living, a family of four cannot possibly manage in a 1200 SF, 2-bedroom apartment. So we moved to a big, 3000 SF, 2-story house with a large yard.
The house is beautiful and very spacious – we have more space here than we actually need – but it is also very expensive, both in terms of the monthly payment and in terms of maintenance. We’ve been talking about downsizing, and although we will probably hold off with that until our youngest heads off to college in ten years, I do know several young families with children who are decidedly choosing smaller houses that are easier to maintain and easier to pay off.
I’ll admit it: keeping up with the Joneses was part of my own family’s decision to move from our beloved 2- bedroom apartment to a big house. My older child started Kindergarten in a posh private school (we do have our reasons for sending our kids there), and I admit that I just couldn’t stand the horror in the other moms’ eyes when they realized we were living in a small apartment.
I wanted to keep up, to be like everyone else, and so we moved into a beautiful home and all was well. But of course it never stops there – there are luxury cars and annual vacations to exotic locations and expensive watches, designer clothes and various gadgets.
If you succumb to the “keeping up” mentality, it will likely not stop with a house, and could easily consume way more of your resources than it should. Those same resources that should go towards paying debt, building an emergency fund and saving for retirement.
Your daily habits make a difference too. Many of us don’t even think about them anymore – we take that daily trip to Starbucks, eating lunch out with coworkers, and takeout dinners, for granted. But these do add up to hundreds, even thousands of dollars, per year.
This is actually one area where my family is doing well. Tired of mediocre, overpriced food and coffee, we brew our own freshly ground Illy coffee at home, and prepare most of our lunches and dinners. Eating at home instead of dining out is good not just for our budget but for our health – restaurant food is often too fatty and laden with sodium and with artificial additives.
Looking at your own life, how are you doing? Are you spending too much, trying to keep up and taking an expensive lifestyle for granted? Or are you trying to be conscious of your spending habits, ignoring the neighbors and consuming less?