(Photo by James@mannequindisplay.com )

In part III of The Money Mindset Series , I highlighted the need to invest and grow your money to facilitate living a balanced life. In order to have money to invest, it makes sense to save and be frugal about money. There is no point in talking about investing if you are living paycheck to paycheck.

In this part of The Money Mindset Series, I will elaborate on consumer spending - the mindset behind it and how it is detrimental to living a balanced life . Specifically, we will examine the following mindsets:

• Living an expensive lifestyle is happiness.
• The temptations of instant gratification.

BUYING YOUR DREAM LIFESTYLE - A MINDSET FROM MODERN ADVERTISING

Everyone one of us desire a certain lifestyle. A lifestyle is a person’s pattern of living as expressed by their interests, motivations, activities, desired experiences, and beliefs. The lifestyle that you pursue is closely related to your definition of happiness. It is influenced by your childhood experiences, parents’ lifestyles and your peers.

At the same time, our ideal lifestyle is also heavily influenced by marketers and the mass media.

In order to entice consumer’s money, some marketers project a promise to the dream lifestyle through their products. Unfortunately, this form of messaging also results in a prevailing notion that consumer spending is the path to fulfilling our deepest desire. The following advertising examples will make my point:

The copy reads “A Life More Wonderful Starts With Visa“. The underlying message: Do you want a wonderful life? Get Visa and buy your way to a wonderful life.

The above copy reads “Now you can own anything, any time, anywhere“. The underlying message: Whatever your desire, we help you to buy it - anything, anytime, anywhere!”

Here’s my favorite from the wildly successful Priceless campaign from MasterCard. This campaign has ads which sequences through a list of purchases and their prices. In return for paying these prices, you will enjoy experiences which are absolutely priceless. The campaign holds the promise of fulfilling your dreams through spending.

Everyday, we are bombarded with messages from the mass media which screams:

Frankly, I don’t think there is anything wrong with pursuing your desired lifestyle. Everyone of us has the rights to live life happily and pamper ourselves sometimes.

However, it is a problem when pursuing an expensive lifestyle becomes the only avenue to deriving a sense of satisfaction. Life fulfillment based on consumer spending is a dangerous mindset that will cost you much in the long run.

THE PRICE OF LIVING AN EXPENSIVE LIFESTYLE

Consumer spending only give us short-term gratifications. Buying branded goods, trendy sports car, latest gadgets does make you happy for a while. However, once the novelty of the experience is gone, you have to seek the next ‘high’ by spending more money. It becomes an endless pursue of happiness as you make purchases after purchases for each ‘happy experience’.

As such, each month, you spend every single cent of your paycheck. When your money is used up, you seek more ways to support your spending. That’s when credit cards and credit purchases come to the rescue.

The reason why credit spending is so prevalent is that it offers a means to fulfill our desired lifestyle without having to earn the real purchasing power first. As credit gives us perceived sense of increased in spending power, it’s a tempting shortcut to take. Essentially, the message is: “Be happy now and pay for it later“. As it is so easy, many people take up such offers to satisfy their need for instant gratifications and continue to live an expensive lifestyle, thinking it’s the way to satisfy themselves.

Such lifestyle easily results in accumulating debts. When your bills come in at the end of each month, reality strikes and you will end up with the same sense of lack and unfulfillment. In fact, you will have additional worries now, as you have mounting debts to repay.

You start to worry about job security because you have debts. For job security, you compromise your standards and your ideals. You settle for a lousy job and a slave-driving boss.

When you’re unhappy at work, there is a tendency to seek relief. As such, you continue to spend and indulge for more short-term relief. Obviously, this becomes a vicious cycle.

I hope that you see that this approach is not sustainable. It gets some desires satisfied in the short term, but you’ll end up with debts over the longer term. You cannot be happy when you have debts to worry about every month or is living from paycheck to paycheck.

HOW I TRIED TO BUY MY HAPPINESS (AND ENDED UP WITH NOTHING GAINED)

• I remember that when I was in my teens, I pursued wearing branded clothes. Some of my friends were into the latest branded wear and I wanted to fit in. I was a student from a family which is not well-to-do, and it was not easy to get money to buy these extravagant stuff. So I worked part-time and spent all my salary on these fanciful items. On hindsight, I thought that these items would get me respect and acceptance from these friends. Turned out it wasn’t the case. I left the group after some time.
• Later when I first started working, I was very impressed by the latest electronic gadgets and fanciful bikes. As such, I spent a lot of money on them. I used to think that you will earn others’ respect and admirations when you drive the most impressive car. Again on hindsight, it’s very dumb thinking, but I guess we just need to learn these lessons sometimes.
• I took up credit purchases to buy expensive electronic gadgets which depreciated very quickly. In return, I had half of my monthly salary committed to paying these debts. At first, it was a great feeling to have new gadgets to play with, but those feelings didn’t last long. I stopped enjoying these gadgets long before I finished paying my installments.
• I was very careless with money and I spent all that I earned. I did try to save for a while, but once I have some money, I ended up spending everything on big ticket items. Without a financial goal and not knowing how to grow my money, there was very little motivation to save.

As such, I lived paycheck to paycheck for many years. It wasn’t a great feeling. There’s this constant sense of lack and I kept wondering why I never have enough to get what I want.

KEY TO HAPPINESS - GROW YOURSELF AND YOUR MONEY

Contrary to what the mass media will like us to believe, the key to happiness is not about buying and spending; it is about growing. It is about growing yourself as an individual, and growing your money:

• When you grow as an individual, you will learn to truly understand that happiness, respect, love, admirations, achievements, success don’t come from materialistic pursues.
• When you grow your money, you give yourself more options in life. You gain freedom to make choices and that is a very liberating feeling.

Here’s some tips to help you overcome indulgence in an expensive lifestyle and consumer spending:

• Understand what you truly want - what type of feeling or satisfaction are you trying to derive from spending? Love? Respect? Acknowledgment? Very often, underlying these over indulgence are hidden unsatisfied desires. Try to find other means of satisfying these desires without spending OR rationalize to yourself that spending money doesn’t truly earn you that satisfaction. For example, I used to think that wearing branded goods will get my friends to accept me. Obviously, true friends will accept me for who I am and not for what I wear, right?
• Have a financial goal - many of us want to be rich, but how many people truly have a financial goal which states how much net worth you want to be and by when? When I was young, I didn’t have the motivation to save because I didn’t really understand the importance of financial goals. I wanted to be rich, but I only had empty intentions and nothing substantial to act on. As such, any moment there is an opportunity to spend, it was quickly acceded to.
• Learn to grow your money - having a goal is the start. The next step is to take substantive actions by learning to grow your money. When I learned about the power of compounding and how a few hundred dollars can grow into thousands over time. I came to truly appreciate the value of money and I became very careful about spending even few hundred dollars.
• Live a simple life - don’t complicate your life by unnecessary materialistic pursues. Whenever you have an impulse to spend on big ticket items, ask yourself if this expense is going to give you any tangible benefits over the long run. Or is this just another of those short-term satisfaction?
• Give yourself a treat once in a while -Being frugal doesn’t mean being stingy. Going the other extreme of being stingy isn’t going to help you, as you are likely to deprive yourself so much that you’ll rebound and splurge all over again. Give yourself some small treats and fun once in a while. This can help balance between your goals and desires and make this endeavor sustainable.
• You can enjoy your desired lifestyle, worry-free - I’m not advocating that you give up your dreams of desired lifestyle. I’m just saying do that wisely, over a longer term. Don’t short change yourself by seeking short-term satisfactions at the expense of your long-term happiness. When you have achieved a certain-level of financial foundation, you will have enough passive income to live your desired lifestyle, worry-free and guilt-free. Isn’t that a better option?

CLOSING REMARKS

The modern society is bombarded with messages of instant gratifications and consumer spending is the avenue to it. I’m just saddened when I see or hear of people who are living on a day-to-day basis because they don’t understand how to control their money and impulse for consumer spending.

Over indulgence in consumer spending is a myopic approach towards a balanced life and you’ll only end up short changing yourself over the longer run. I know, because I was like that.

I also know that a long term approach is hard to embrace, compared to the short-term temptations we are exposed to everyday. Understanding that true happiness comes from fulfilling relationships and meaningful work is key to breaking out of this vicious cycle. When you learn to love yourself, derive satisfaction from your work and have mutually supporting relationships, you will learn to see beyond the media messages about consumer spending. I will be starting a new series on Work and Passion to elaborate into this, so look out for it.

I hope this article gives you a stronger reason to examine your mindset about money and consumer spending. Hopefully, you’ll come to understand that the long-term approach to living your dream lifestyle is the way to go.

If you have any questions, I will be happy to exchange pointers with you. Just use the contact page, and send me your questions.

EXTERNAL RESOURCES ON FRUGALITIES

• The 10 Key Actions That Finally Got Me Out of Debt; or, Why Living Frugally is Only Part of the Solution - ZenHabits.
• Simple Frugality By The Hourly Rate - The Simple Dollar.
• Playing Around: Frugality as a Game - Wisebread
• Looking at Your Spending Map - LifeEdit.net

This blog is about leading a balanced life focusing on career, relationships and money. You can read more about balancing your life here. These articles are written for you. If you find them useful, feel free to subscribe for regular updates as new articles are posted. It's FREE. :)