You can’t begin a debt free journey without starting to re-think your relationship with spending, credit cards, and consumerism. It’s a worthwhile exercise.
This is an example from my own life. It’s a good example of consumerism and how it’s possible that we are piling up debt on credit cards to buy luxury goods we want and don’t even know why.
She was a very pretty girl who was used to getting whatever she wanted. That much was always clear to me. She worked as an assistant to a Wall Street executive and was used to having men with huge egos and bank accounts woo her. She always wanted to have dinner at one of the three most expensive and or hottest restaurants in New York. Nobu and a few others I can’t even remember. Honestly, at the time, I was ok with all of that. She was actually very smart and insightful, but her financial expectations became frustrating even then.
We spend money we don’t have, to buy things we don’t need, to impress people we don’t even like.
Why do I bring this up? We were dating during The holidays a few years back and she mentioned she wanted lingerie from La Perla. Think Victoria’s Secret but with a 700% markup. I had to research it myself. I became really interested in this company and brand because I have almost never seen a markup like that for any other product. Their bras were like $100-$200. As an investor and business prof, I was very intrigued. “Why was La Perla so good? Is it the quality? The fabric? Why is it so much more expensive than every other brand?,” I asked her. She was annoyed and defensive and I think she may have even intimated I was being cheap (Me Frugal?). I was very confused.
And I quickly realized that she didn’t know what made it the best. She didn’t know why it was better than other brands. All she knew was that her friends would be impressed. She knew the name and the cost. And that was all that mattered. This is the world we live in: consumerism.
She didn’t know why she wanted it. She just did.
This reminds me of a podcast of The minimalists I just heard where they talked about how Rolex became such a powerful brand. Apparently, in the 1950’s and 1960’s, men used to go on vacation and dive using Rolex watches. These were wealthy, rugged, adventurous men who preferred a quality dive watch. And other men started to buy the watches and it became the huge brand it is today. But, it is primarily a quality dive watch. And most men pay a premium for a watch that can safely go to 2,000 meters. But many of them never use it in the water except, in the shower or a pool. It makes you feel cool, rugged, adventurous, and wealthy. But first, they need your $2,500.00
The smarter you are the more you realize how powerful advertising, branding, and social influences are in our decisions to spend money. It’s powerful.
Sometimes we don’t even know why we want what we want.
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