I watched my granddaughter graduate this year, and got thinking what sort of advice I might offer those young men and women. There are so many opportunities and endeavors ahead of them. Being a textbook-case Cancer, my thoughts naturally turn to home, and that leads me, inevitably to my passions – caring for family, household management and thrift. Then, I knew what I would say.
Worry about your OWN bottom line, and
the country will take care of itself.
Perhaps one of the greatest modern bug-a-boos is “If you don't shop, our
economy will go down the toilet.” This
is an over-simplification of a complex issue.
In a FREE market, this is true.
In the highly speculative and “futures” market of today, this generalization,
more often than not, hurts the individual.
Do not fall for it. Yes, there is absolutely a correlation between goods and services bought and sold, and the country's economic growth and stability. HoweverBut, coercive rhetoric is often employed to get the consumer to shop, shop, SHOP! It's all about the corporate bottom line, and their ability to pay desired shareholder dividends. It has little to do with saving the country’s economy, merely their own. If individuals overspend and incur onerous debt, the country is far more vulnerable to economic meltdown and paralysis than it would be if everyone spent within their means. This fact will never satisfy the corporate appetite for ever-increasing profit margins, though.
The current trend is to sell. Sell HARD. Doesn't matter is the product is any good, or if it’s the ideal solution for the customer; it matters only that it is SOLD. Good luck getting service, warranty or even technical support after the transaction is complete. Despite all promotions to the contrary, know this before you purchase anything.
From time to time, I place an online order and really enjoy the ease of shopping, the variety of products, and the quick and convenient home deliveries. What I don't enjoy is getting an email, from the same vendor, a week later “wondering” why I haven’t made another purchase. Excuse me? If I need anything, I'll order. If I forget something, I'll re-order. Prompting like this is what I call anti-advertising: the overt (to me) insatiability makes me never want to shop there again.
Perhaps the most irritating tactic by retailers is the buy "x" number and get "y" free. If a person needs only one, the others are superfluous, and thereby offer no savings, but waste. The only exception being, when those items store well and are intended for eventual use, then consider the extra items. Otherwise, the purchase supports the merchant’s bottom line, not your own. You're certainly not saving anything.
This first key to a balanced budget is to know the difference between want and need. Even necessary expenditures can entice us to spend beyond our means when we allow ourselves to get “up-sold” on features or modifications that are more flash than requirement.
The second key is to learn the value of your own work. In other words, how many hours did you work in order to afford that cool whatchamacallit? Would you so willingly spend those hours at work for it? If the answer is yes, then, even if it is a want, it will add to your quality of life, and that is important. However, more often than not, when you include "hours worked" in your mental calculations, it will more clearly define those wants and needs.
We all know that when spending is greater than earnings, there is deficit. Everyone concerned with balancing his or her household budget knows this. Only a rarified few, who rely on and indulge too heavily at the money-trough called ‘Consumers’ Hard Work’ fail to accept their own influence on the lingering economic malaise. Despite their fear mongering, however, restoring the economy will never depend upon your purchasing any whiz-bang thingamajig. It seems there is little any individual can do to affect this current trend of abuse and gluttony by community leaders, but there is no need to feed the beast. So, whatever you do, don't fall for the marketing hype. Buy what you need when you need it, and save for things you foresee needing. Use credit as little as possible; save it for those emergencies when need is greatest.
The next time you feel pressured -- by corporations, by advertisers, by news broadcasters, by politicians -- ask yourself if you really NEED what they’re selling. When shopping, ask yourself, who is best served by your purchases?