How Much Money Do You Waste Buying Stuff You Don’t Need?

If everything we have purchased, and now do not use, were to float on the ocean for all to see, we would not have room to surf.  Think about how much stuff you personally have in your closets, garage, car trunk, and so forth that you no longer use or do not really need right now?  If it were floating on the ocean, what would that look like?  Here is a quote from Steve Martin, the comedian, that really sums up how silly we are when it comes to all the “stuff” we buy: 

I love money. I love everything about it. I bought some pretty good stuff. Got me a $300 pair of socks. Got a fur sink. An electric dog polisher. A gasoline powered turtleneck sweater. And, of course, I bought some dumb stuff, too.

Add up all the money you have spent on things you no longer use, and the total would be a small fortune.  How hard is it not to want something?  Pretty hard when you consider that we are being pushed to consume by constant exposure to advertising.  You see it on the Internet, billboards and TV.  Who isn’t selling something?  

And what about our kids? They are constantly pressuring us to buy stuff. shutterstock_92894512I was standing in line to purchase bread at a grocery store the other day behind a mother and two boys who looked to be ages 4 and 6.  The 4-year-old asked his mother if he could have some candy.  She gave a stern reply, NO!  (I think it was to remind her not to buy things, more than to tell her son no.)  Anyway, the boy kept asking and even changed how he asked, until finally on the fifth try his mother broke down and bought him the candy.  Then the older brother asked too, because after all, his little brother got some, so why not him?  The mother was so perplexed and in a sigh told the 6-year-old he could have some, too. My observation of this event was that the mother had just trained her children to ask five times to get what they expect in life.

The only solution to unnecessary consumption is to determine in advance what you want and need and then set priorities before you make purchases.  You must decide at the beginning of each month how you will spend your money.  Don’t BUDGET your money. Instead, prioritize where your money will go. The only way to do this is to create a Spending Plan, not a budget (check out the link to see the difference).

When you are creating your Spending Plan it’s always a good idea to set aside some money for FUN, like candy, a movie or travel.  To do this, allocate a small percentage of your monthly income to an “emotional spending” category in the Spending Plan. That way, if your son wants some candy in the checkout line at the grocery store “spur-of-the-moment” you will have already created a specific spending category for this and the money will be available.

With that in mind, let’s revisit the two kids and the mom in the grocery store:  The 4-year-old asks for candy.  The mom could simply say, “Yes, you can have the candy, but then we cannot buy the toy car you asked for the other day.  Which would you rather have?”  This way, the mother doesn’t have any drama going on, nor does she have to say no.  In addition, her kids are getting some valuable training as they are being taught that they can have anything they want, they just can’t have everything.  In other words, just like their mom, who must prioritize what is truly important to her and decide how she’s going to use her money in a way that makes her and her family the most happy, her children will also be learning at a young age, that they must prioritize their spending too.  Wouldn’t it be better for them to learn this now than after they graduate from college?