Here’s How Much Money You’re Wasting Each Year on Non-Essentials
The economic troubles brought about by the COVID-19 crisis have shown us that somewhere along the way, we got needs and wants mixed up. From Amazon shopping carts to impulse buys and everything in between, the average American spends nearly $18,000 per year on non-essentials, according to USA Today. That’s a new car. A year of community college. A home improvement. An investment. A deposit for your retirement account. Think of all the things you could do with an extra $18,000!
The amazing thing is that most people are on autopilot and don’t even realize how much those non-essentials add up. Cue the COVID-19 crisis. With many Americans in jeopardy of losing jobs or having lost them already, suddenly, everything comes into perspective.
The Height Of Consumerism
It’s 1945; World War 2 is at its bitter and bloody end, and a small, relatively unknown country takes its place as a world leader on the global stage. The US emerged from the war a superpower in all things technology and military and boasted one of the world’s strongest economies. Being the only country to emerge from the war with both a strong military and strong economy in place, whereas the majority of Europe had been ravaged from years of bombings and hard fighting.
Wartime production catapulted the crippled country out of the Great Depression, and consumerism was born. Soldiers on the frontlines returned to a very different America; one of wealth and plenty, and money to go around. What else do you do with excess money but spend it? Cue the rise of American consumerism.
With new goods on the market, financing options, and plenty of jobs and money to go around, America is said to have “boomed” after the war. But what did that “boom” really do for America? Sure, it injected billions into the economy, stimulated growth and job markets, but on the flip side of the coin, it also created one of our most dangerous and destructive habits: consumerism.
The Effects Of Consumerism
Today, you can walk into just about any store, and, provided you’ve got good enough credit, walk out of that store with a financed item worth thousands of dollars. Just like that, you’re tied to the item, the loan, and the incessant need to continue filling your home with things you simply don’t need. It almost becomes an addiction, where every second is filled with thoughts of what your next purchase might be.
Not only does consumerism drive the machine of environmental damage, but it also drives us further and further into debt. According to a 2019 study, the total amount of consumer debt in America rests at around $14.1 trillion dollars, with the average person holding somewhere around $90,000 in personal consumer debt.
Our voracious appetites as Americans have cost us dearly already, with banks and financial institutions taking full advantage of our need to buy. Most people don’t even have a savings account or have less than $1,000 in one, but financing a new TV, iPhone, or vehicle is second-nature. It’s embedded in our thought process and has become an addiction.
Ditch The Non-Essentials
When we say ditch the non-essentials, we’re not saying you should starve yourself of the things that make you happy. Obviously, we all have things we enjoy buying, and there’s nothing inherently wrong with spending money. However, if you’re trying to build a stable financial future, you’ll want to cut back on that non-essential spending. Yes, that means quitting smoking (even if you replace the habit with something less expensive, like CBD), impulse-buying, and filling the house with cute nick-nacks.
Just think how much $18,000 per year really is. If you only make $40k per year, that’s nearly half of your entire income stream going towards non-essentials. Half. You could likely afford a house in a better neighborhood or with more space, or even be able to give yourself some wiggle room between paychecks if you simply curb your spending habits.
A good rule of thumb is to always give yourself about three days to think about a large purchase. Ask yourself these questions:
Does this item bring real value into my life?
Can I live without this item?
Can I afford the true cost of this item (including maintenance, financing costs, etc.)?
Is it worth my peace of mind?
How many hours did I have to work to earn the monetary equivalent of this item?
The Bottom Line
Consumerism is certainly not something that’s going anywhere. Even during COVID-19, retailers are encouraging purchasing of non-essentials, despite the need for everyone to save money and look toward their financial future, not toward the TV aisle. Either way, cutting out non-essentials from your budget can save you thousands every year, but remember that you don’t have to make yourself miserable in the process. Decide what things you want to keep and which things you could truly live without.
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