Consumerism, clutter and your financial health

courtesy of Consumer Protection Hub

We are living in times where we are exposed to hundreds and thousands of ‘peers’ instantly on social media. These are people in different countries, cultures and with different financial obligations and resources. Some of them are influencers. Hired to mention or showcase a product to boost sales, others are your high school mates. Majority of these people have an impact on our financial health.

This article defines consumerism a tendency of people living in a capitalist economy to engage in a lifestyle of excessive materialism, that revolves around reflexive, wasteful or conspicuous overconsumption. It goes ahead to define conspicuous consumption as people purchasing, owning and using products not for their direct use value but as a way of signalling social and economic status.

From malls, to influencers, betting sites, subscriptions, discounts, google and youtube, we are constantly being nudged towards consumerism. There are always better and more improved products in the market – and every so often – we agree to ‘upgrade’ or add ending up with more products than necessary, less disposable income and lots of clutter. From phones, carpets, clothes, shoes, home appliances; most of us have full pantries/ garage and are looking for additional storage solutions.

As consumerism increases in the world, financial health seems to be dwindling due to decreased disposable income, rise in payday loans, credit card debts and lack of savings for most individuals. According to Juliet Schor, the average American family’s savings can only last them one month after loss of income.

We recently came across this article of two Nigerians who were arrested due to alleged cyber crimes and wire frauds. They were flaunting their wealth on instagram and showcasing what people who follow them should aspire to have. Infact, the instagram accounts are what sold them off to the feds. Social media affirmation and validation can nudge us towards consumerism.

As Dave Ramsey famously puts it, “we buy things we don’t need, with money we don’t have to impress people we don’t like”.

clutter filled garage

Its a race for our attention and our money from everyone in the market place – tech companies, advertisers and product owners. According to this tedtalk, there are more than 100 attention engineers/ psychologists on the other side of your screen that orchestrate what you are doing. Yet we think we are in control. And we allow ourselves to impulse buy because we ‘like’ something. All to the detriment of our financial health.

It would be unfair to blame the digital era for all our financial health woes. But it contributes greatly. We need to filter what we expose ourselves to. As Tristan Harris says, we also need to acknowledge that we are malleable to consumption nudges. We need to empower ourselves with healthy financial habits and tools to guard against this influence. Having a budget, an expense tracker and a net worth tracker can guard against this.

Today when you get back to your house, guesstimate/ appraise everything in your house. From the clothes in your closet, to your shoes, home appliances e.t.c. You can categorise them to see where your money goes. Are you spending too much on shoes? clothes? Would cutting back on consumables enable you to re-focus your capital to bigger projects? When was the last time you used the stuff filling your storage space? Can you cash out on these items, perhaps take them to a garage sale? Most times we get on a moral high horse and justify ourselves with the fact that we donate these things but is that the most efficient way of giving?

Financial health is a continuous process of holding yourself accountable for your spending, tracking your networth to see if there’s progress and updating your financial habits and tools to optimise your assets. Most people wonder how they can afford an asset such as a home yet they are busy engaging in conspicuous consumption. It can be as easy as setting a goal, keeping it ‘top of mind’ and working towards it. To the extent that the next time you see a handbag you fancy, you remember your goal and leave it. You need to be flexible, be willing to delay gratification and allow time for the power of slight edge.

Simple disciplines repeated over time will create success while simple mistakes repeated over time will create failure ~ Jeff Olson

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