Thursday, April 5, 2012

Don't save money

When it comes to being a miser mom, "saving money" is the wrong mindset.   Being frugal is about careful spending, not about big savings.  More specifically, it's about spending less (one hopes) by directing that spent money to things that really matter.

I've been reminded of this as I was reading a fascinating little 2002 report called "Overconsumption in Australia".  When I say, "fascinating", I mean "to me".  Not everyone likes reading socio-economic reports.  But me, I was captivated.

The report describes how Aussies have learned some particularly costly attitudes from us Americans.  Attitudes like this:
It is apparent from Table 2 that 62 per cent of Australians believe that they cannot afford to buy everything they really need . . . . When we consider that Australia is one of the world’s richest countries, and that Australians today have incomes three times higher than in 1950, it is remarkable that such a high proportion feel that their incomes are inadequate. It is even more remarkable that almost half (46 per cent) of the richest households in Australia say that they cannot afford to buy everything they really need. The proportion of ‘suffering rich’ in Australia is even higher than in the USA, widely regarded as the nation most obsessed with money.
What are these things that Aussies feel they "need", the report asks?  It points to luxury kitchen appliances, cosmetic surgery, designer sunglasses, and more.  For example, "Instead of paying $800 for a fridge that would meet their needs perfectly well, customers pay $1600 or $2000 for one that has only marginally better performance."  Or this:  "While a barbeque in the 1980s was typically assembled at home from 150 bricks, a hot plate and a wood storage area, in 1998 the top of the line model cost $2,000."

The report has a definite bias.  (The last sentence hints at it: comparing "typical" goods from 1980's to "top-of-the-line" two decades later is not really an unbiased approach).  But it does do a good job of describing how the items we claim to need changes over time.  Even 10 years ago, I did not "need" a laptop; today I'd just about melt down if I had to go without it for 24 hours.   When I was growing up, many of my friends lived in a one-car household; now many of my friends have more cars than drivers.

In fact, there is lots of talk going on in the Miser Mom house right now about whether we need a new vehicle.  We have a new driver.  We're getting a new son today.  We won't fit in one car anymore -- do we need a van?

What does this have to do with why "saving money" is the wrong way to look at frugality?  Because (backing carefully away from the van question), if I don't really need that set of drill bits, but I convince myself I do need them, and if I tell myself it's good to buy them because they're on sale so I'm actually "saving money" . . . well, if all that is true, then I just spent a bunch of money.  On something I probably don't really need.

Hands back in pockets.  Put down the wallet.  You know the drill.

No comments:

Post a Comment