You Can’t Take It With You When You Go
One of my resolutions for 2019 is to have a “no shopping year.” Not a no spend year, mind you, a no shopping year. What this means is that I will put forth a conscious effort not to buy anything that I don’t absolutely need. I will be mindful of how I spend my money, rather than impulsive. This is a major challenge for me because I have plenty of clothing, shoes, jewelry, etc. but in the past, if something caught my eye, I could afford it and I could justify it in some way, I just bought it. Even though I really don’t need one more coffee mug with a cute saying on it, new sofas for the living room, or another candle holder, I can certainly give you a reason as to why I should make those purchases.
I have a pretty good head start already, seeing as I left a higher-paying job to freelance and teach as an adjunct several months ago. Without the promise of a steady paycheck, I have really had to be mindful of how I spend my money, and after taking inventory of it all and asking myself “What do I really need?” I found that a lot of the things that were once so important to me, just aren’t anymore.
Already, as 2018 comes to a close, I have cut down on spending.
First, I looked at all my subscription services. Spotify Premium? NOPE. I settled for the free membership instead and downloaded the iHeart radio app so I can listen to my favorite stations whenever I want. Scribd? Kindle Unlimited? No, I got a library card and now I borrow e-books from the library app instead. Hulu and Netflix? I kept Netflix. Amazon Prime? This was a tough one. How often do I actually order from Amazon? GONE.
Next, I looked at our bills. I examined our cell phone usage. Do we really need the expensive Unlimited data plan for our phones? Sorry kids. We now have 1G between all of us and data is turned off on all of their phones. With free WiFi virtually everywhere we go, we don’t really need it. And the only thing I use it for is my GPS which I only use on long trips. AND, no more upgrades! Once my phone is paid off with AT&T, I will probably take this a step further and go with Xfinity Mobile. I dissected our cable bill. We already had the lowest plan available with HBO added on, but we only have two boxes, so I deemed that acceptable. There are six TVs in our house (probably not necessary either, but just owning an extra TV or four isn’t costing us any money). I have one in the kitchen that is hooked up to Roku, so I can stream off the Xfinity app and have the news on when I am cooking. The girls have Apple TV and a Chromecast hooked into theirs and our kids use the one solely for video games. With five kids, ranging in age from 4 to 17, I guess it eliminates the fighting to some extent. Wifi, I had to keep. We can’t live without — I need it for work and if we aren’t going to have data then we definitely need it to keep our cell phone bill low (at $12 for each gig of data, it can add up quick).
Finally, I looked at our memberships. Gym membership. No again. I traded it in for a family membership at the YMCA, which only cost me half of what I was paying for my fancy athletic club. If I didn’t need it to save money on my daughter’s before and after school program, I could probably manage just working out at home, but the money I save having it more than pays for the cost of being a member.
I also go to the grocery store more often and we eat out less. And I meal plan, buying only what I need to make the meals I have planned out, a few snacks, and what the kids like in their lunches.
With my kids, these cutbacks will be harder. I think in general it is difficult for kids to discern between a “want” and a “need”, even though I know for a fact they teach this in 4th grade. Still, I have vowed not to buy them anything unless they need it — socks, underwear, deodorant — those are necessary items. A new laptop before the old one has died, new Nikes just because they are cool (my oldest son is a sneakerhead and already owns ten pairs, none of which are worn out), the latest release of Black Ops, makeup from Sephora, are not necessities. (In my oldest’s defense, he does have a job so anything he chooses to spend his hard-earned money on is at his discretion).
Why do we consume?
A study published in the research journal, Psychological Science in an article titled “Overearning,”(Hsee, J. Zhang, Cai, and S. Zhang, Apr 9, 2013), illustrates our society’s deeply rooted desire to earn more than we can possibly consume in a lifetime, even though having more doesn’t necessarily make us happier.
According to the authors of the study, John Maynard Keynes, an English economist, journalist and financier, who is best known for his economic theories (Keynesian economics sound familiar?), predicted in 1963, that by 2030, most people would only need to work 15 hours per week to earn the amount of money they would need to live, and would enjoy far more leisure time than previous generations. Yet, here we are, 12 years away from his prediction, and most people are working more than their grandparents at 40 to 60 hours per week.
A friend of mine who is a financial planner has always said, “the more you earn, the more you will spend, it’s all relative.” But, what happens to all that stuff when we leave this earth? We leave it all behind for our loved ones to deal with. I can’t even begin to tell you how much of my grandparent’s crap we ended up throwing away after they passed. Sure, there were some items that held treasured memories for those they left behind, but there was also plenty of junk that nobody wanted. Taking into consideration that they were part of the Greatest Generation, the generation that didn’t spend all their hard earned money on “things,” I can only imagine the amount of stuff that Boomers and Gen Xers will leave their Millennial and Gen Z children; the latter being two generations that have rejected having stuff for stuff’s sake, living beyond their means, and the accumulation of debt.
Is having more stuff less important than it used to be?
We live in a sharing economy that was pretty much created by Millennials in response to the lack of jobs in their field and the growing lack of affordable housing they faced upon college graduation. They were told to attend college to get a good job, and they did, but they also accumulated student loan debt in the process. A lot of Millennials had no choice but to take lower paying jobs in the hospitality industry despite being the most overeducated generation in history and because they couldn’t earn enough money to pay off student loans, AND afford their own apartment AND own a car they tend to place less emphasis on the materialistic.
In contrast, Generation Z places less emphasis on a 4-year college degree. Not education, just the need for a degree. They are opting instead for alternative forms of education that will leave them with less debt. Born between 1997 and 2010, they are the first generation to experience a world in which smartphones and constant access to entertainment have always existed. They are extremely tech-savvy, creative, open-minded and ambitious. They are also more cautious than previous generations. Socially aware, they are determined not to make the same mistakes as their parents and grandparents and therefore steer away from risky behaviors toward more sensible choices. They also outnumber Boomers and Millennials — making up 25% of the current population.
Gen Zers are a whole new kind of consumer. They view consumerism as a vehicle for change. They care more about supporting brands and purchasing products that serve a greater purpose. They will make up 40% of consumers by 2020 and everything they want to purchase they can buy through their phone. It remains to be seen how this generation will contribute to society, but their views on consumerism are already influencing the way we shop; and as their buying power increases, it will be interesting to see what their lifestyle looks like and what they spend their money on.
The big lie: If I make more money, I can buy more stuff, and therefore, I will be happier.
Don’t get me wrong, this “no shopping year” isn’t going to be easy. It is difficult for anyone to cut back on spending when we live in a society where consumerism runs rampant. We are obsessed with shopping and the accumulation of stuff. This is evident in our holiday spending alone with the National Retail Federation predicting that this holiday season, sales will top $1.1 trillion, which includes online sales. But how does all the stuff we buy actually contribute to our overall happiness?
Dr. Martin Seligman, an American psychologist who has studied happiness and well-being, believes there are five factors that contribute to happiness: positive emotion and pleasure, achievement, relationships, engagement, and meaning, with engagement and meaning being the most important. In The One Thing, Gary Keller and Jay Papasan talk about wealth-building and how it can positively contribute to happiness if there is a purpose behind it. Keller writes “Becoming more engaged in what we do by finding ways to make our life meaningful is the surest way to finding lasting happiness. When our daily actions fulfill a bigger purpose, the most powerful and enduring happiness can happen.” He goes on to say, “I believe that financially wealthy people are those who have enough money coming in without having to work to finance their purpose in life…To be financially wealthy you must have a purpose for your life. In other words, without purpose, you’ll never know when you have enough money, and you can never be financially wealthy.”
Research suggests that having more money (and therefore the buying power to accumulate more stuff) doesn’t actually make us happier. To a point, it can, but there is also a point where it stops. Keller says, “Securing money or something we want can spike our happiness meter — for the moment. Then it goes back down.” Why? “Once we get what we want, our happiness sooner or later wanes because we quickly become accustomed to what we acquire. This happens to everyone, and eventually leaves us bored, seeking something new to get or do.” The worst part of this, Keller warns, is that we seldom slow down to actually enjoy anything we have acquired. This creates a vicious cycle of achieving to acquire and acquiring to achieve. “If we’re not careful, we wind up ricocheting from achieving and acquiring to acquiring and achieving without ever taking time to fully enjoy any of it.”
The relationship between money and happiness has been studied extensively over the ages. In a recent study in the journal, Nature Human Behavior, researchers found that “income satiation,” the level of income where earning more does not increase the level of one’s happiness, occurs globally at an average salary of $95,000 a year (more or less depending on where you live — in wealthier regions, for example, the income level may be greater and vice versa) (Jebb, Tay, Diener, and Oishi, January 2018). This means that at an income satiation level of $95,000 if you earn $105,000 and your neighbor earns $200,000 a year, theoretically, your neighbor isn’t any happier than you are despite the fact that she earns almost twice as much as you. On the other hand, the person in the next neighborhood over who earns $60,000 a year could, theoretically, be less happy than you or you neighbor. The problem with this theory is that it doesn’t account for things such as household size, your mortgage payment, or other debt accumulation. Obviously the person making $105,000 a year who lives in a $300K house with a family of four, and two luxury cars isn’t going to be as well off as the single person with the same income who lives in a $100K townhouse with no dependents and drives a Ford. Likewise, the person who is making $200K a year who has the same situation as her neighbor — $300K house, family of 4, and two luxury cars may have more disposable income, so they may also own a boat and send their kids to private school or take their family on an expensive vacation every year. Which brings me back to my financial planner friend’s observation that it’s all relative.
When I look around my house at all the stuff I have accumulated in my adult life, I often wonder how much of it I could do without. Every year I clean out the house and end up taking bags and bags of clothing to Good Will and consignment shops, selling unused items on Facebook Marketplace, and holding a garage sale to get rid of the toys that my kids just had to have but only played with once or never even touched.
My mother always said that some of the poorest people in the world are the happiest people, and I believe that to some extent. Speaking from my experience, I can honestly say that getting rid of stuff and cutting out what we don’t really need instead of stressing over how we are going to afford it has definitely made me happier. We also spend more time together as a family. I read more, I write more, in short, I am much more purpose-driven and I do more of the things that feed my soul.
While I am nowhere close to being a minimalist, I have downsized considerably. I would rather spend money on the “experiences” that give way to treasured memories — a family vacation, camping trips, ice skating in Central Park. Who wants to dust all this stuff anyway?
Originally published at www.thekristinachronicles.com.