The biggest threat to anyone’s retirement is the amount of consumption happening in the daily lives of all Americans. We spend almost 90 % of discretionary income buying an immense amount of stuff we probably could live without. Is shopping Americas Biggest addiction, I believe it is and the numbers behind it easily back this up. If we look beyond the needs of the average person it goes to show that living the American dream is definitely misguided in todays society.
Overall consumption is basically hurting the planet, robbing our future, making people addicted to a so called shopping thrill, and setting up the next generation for an epic failure in the future. In contrast the government loves to report the increases in GDP which is fueled in part by our shopping and spending behaviors. The Gross Domestic Product figure in 2018 will probably be at an all time record high of 20 trillion dollars. IF I’m not mistaken that figure has doubled in the last 10 years since 2008. It is projected to reach 24 trillion by 2021. What does this say about where we are spending the good old Benjamin’s?
I have a shopping mall about 10 minutes away from me and on any given Sunday it is full by 10 am. The parking lots are overcrowded with cars by people aimlessly shopping inside the mall for unnecessary things. Its hard to fathom that everyone who is in attendance at the mall on the weekends is in search for a need. NO they are searching for wants and the list of wants gets bigger every year to coincide with the GDP growth.
Is Shopping Americas Biggest Addiction?
Gambling in the United States is a severe problem and only getting worse as in 2016 the amount of legalized gambling was 116 billion dollars as reported. Just imagine the amount of illegal gambling added to the amount above. Now contrast this with the amount people spend shopping 10 trillion dollars. Granted a vice like gambling compared to the amount spent on consumption is not a fair comparison due to the fact that not everyone gambles but everyone consumes something. Putting aside the total consumption figure and seeing the effects of hyper buying, low savings rates (5%) and the lack of recognition that an overspending problem exists is a red light on our American way of life. This is why I believe spending addiction is greater than gambling addiction. We are rolling the dice in the next few decades and things need to change for the positive.
The fact of the matter is that this spending trend cannot be sustained any longer and the first step is to admit that a majority of people have a spending addiction. If you make 50K a year, spend most of it on housing, transportation, and taxes. The last small percentages go to debt, food, and vices. The trick is that we must reverse padding the companies pockets and instead increase the personal savings rate to 15% at a minimum, once the debt is managed or eliminated.
The real cure is finding what is causing the overspending, which will help to heal the unhappiness occurring either at work or home. Once you can trace it to the root of the problem then you can come out feeling more confident with finances. When you feel the urge to shop or spend unwisely begin to do your most enjoyable hobby. For example you can read a book, walk, watch a movie, go to visit family. Join me in sharing and participating in a new challenge #Save>spend. Savings is always greater than spending.
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Rich Uncle EL
