How Did We Get Here?

In my continuing exploration of thrift I oftentimes find myself wondering how we’ve gotten to where we are today.  As a nation, we used to place an emphasis on the virtues of hard work, thrift and frugality.  We took pride in our possessions.  Today we consume twice as much as we used to 50 years ago however our Gross National Happiness has continued to decline during that time period. 

It all begins at the end of World War II when a push towards television advertising changed the way advertisers campaigned for business.  By 1955 there were 30 million household with television sets.  Advertisers now had a captive audience which it could work to sell a generalized perception of consumption.  It worked to sell a higher standard of living.

What does all of this mean?  According to Victor Lebow’s 1955 article in the Journal of Retailing titled “Price Competition in 1955″:

The measure of social status, of social acceptance, of prestige, is now to be found in our consumptive patterns. The very meaning and significance of our lives today expressed in consumptive terms. The greater the pressures upon the individual to conform to safe and accepted social standards, the more does he tend to express his aspirations and his individuality in terms of what he wears, drives, eats…”

 We’ve been sold this idea of success through years of intentional marketing.  For decades businesses have been working to create social pressure in order to get us to conform to the standards which they have defined in order to sell us their products.  We’ve been taught that in order to be accepted by society we must consume.  Each day we are the targets of 3,000 advertisements telling us to eat here, drive this car, wear these clothes.   

Marilyn Manson discusses how the media creates fear which in turn causes us to consume:

…You’re watching television, you’re watching the news; you’re being pumped full of fear…There’s floods, there’s AIDS, there’s murder…Cut to commercial;  buy the Acura, buy the Colgate.  If you have bad breath, they’re not gonna talk to you.  If you got pimples, the girl’s not gonna fuck you.  It’s a campaign of fear and consumption.  And that’s what I think it’s all based on; [this] whole idea [of]: ‘Keep everyone afraid, and they’ll consume.’”

For more than half a century we have been sold this story of conformity through consumption.  It is no surprise how our society today values material possessions far more than we did even 50 years ago.  Ironically, if there were to be a widespread conversion back to thrift and frugality, our economy would suffer.  This is called the Paradox of Thrift.  Our economy is set up on the basis that we will consume at a certain level, and if there is a shift towards frugality on a widespread scale, the economy will retract.  Sound familiar?  Its what is happening today.

The problem is that our spending rate is not sustainable and we must return to a more frugal way of life.  Of course, no one is going to tell you that you need to save your money.  As a matter of fact, most people will tell you to spend in order to boost the economy.  These people are not concerned with the long-term viability of our economy.  They are more concerned with boosting the numbers of the market today.

Now is a great time for us to return to the values of our grandparents; things like thrift, frugality and being thankful for what we have instead of concerning ourselves with what we don’t.

Frugality: Living or Merely Existing?

While reading an article about ways to survive the recession I noticed a comment which made me scratch my head and wonder.  The author of the comment stated that budgeting like you earn minimum wage isn’t living, but rather it is simply existing.

I used to have this same opinion about frugality.  I looked down my nose at people who weren’t dressed in the latest fashion or drove a car with rusted fenders.  My perception of these people was that they were poor, that they didn’t have a choice but to live in this way.

I never considered the possibility that someone would make the decision to live their lives in a way which wasn’t in pursuit of material possessions.  After all, isn’t it the American Dream to have as much Stuff as a person can accumulate in a lifetime?  Isn’t the reason we work so that we can buy new gadgets, new clothes, new cars? 

I wasn’t alone in my thinking.  It seemed that everyone shared my opinion about Stuff.  Consumerism is a way of life.  We are bombarded with advertisements constantly and there is always something new and better for us to buy.  It is no wonder our spending is out of control.

After reaching a point in my life when there wasn’t enough paycheck at the end of the week I began to question the status quo.  How was it possible that so many other people who were doing the same thing as I was seemed to be doing so well?  I battled with this question for a long time as I struggled to maintain a lifestyle where I could continue to buy Stuff.

I continued digging myself a hole which I wouldn’t soon be able to climb my way out from.  I felt as though I was drowning in debt.  Each day I dreaded opening the mail box or answering the telephone.  I grew up in a household which struggled with debt and even though I saw this on a daily basis, I didn’t accept it as being normal.  I turned to the Internet to figure out what I needed to do to turn my finances around.

I found myself reading all sorts of personal finance blogs and websites.  Eventually I came across a website called The Simple Dollar which introduced me to the idea of frugal living.  My opinion of these people was entirely wrong.  I quickly learned that they weren’t wearing the latest fashion not because they couldn’t afford to but because they didn’t want to.  They chose to use their money to provide stability and plan for their future instead of using that money to follow the herd.

I felt like I was trying to learn a foreign language.  Emergency Funds.  Debt Snowballs.  Mutual Funds.  Index Funds.  Dollar-cost averaging.  All of these things meant nothing to me, but I was intrigued.  My idea of what it meant to be rich was being challenged by people in patched blue jeans and who brown bagged their lunches.

I always thought that rich people lived in the big house on the hill with the red convertible in the driveway.  They wore nice clothes and went on exotic vacations.  Now I was being told that I was wrong.  I had worked hard to build the appearance of what I thought it meant to be rich.  I had the latest fashions, a nice car.  Everything I bought was the most expensive model.  I bought the best of everything because that was what the rich people did.

It didn’t take me long to realize that I may have done a great job of creating an image of a stereotyped version of rich but I didn’t have a dime in savings.  Didn’t rich people have money?  Maybe these people who saved their money were on to something.  I decided to do more research and learn as much as I could about this alien way of life.

I kept coming across a lot of the same information.  Spend less than you earn, save your money.  Then I found Dave Ramsey.  People everywhere were talking about his book, “The Total Money Makeover”.  As was my style at the time, I rushed out to buy it (instead of using the library) and I tore through the book, absorbing as much information as I could.  Reading that book changed my life.  It didn’t change my life because the information in the book was profound, but because I knew I needed a change and I wanted to make the change.  I was sick and tired of being broke!

After getting intense about changing my life things began to turn around for me.  I went from being in thousands of dollars in debt to completely eliminating my credit card debt and my personal loans.  I contacted my creditors and began to pay off my delinquent accounts.  Soon I was saving money, and now that I didn’t have all of the bills draining away my money it isn’t so hard to save.

Making this switch from rabid consumerism to balancing a frugal lifestyle with responsible spending has made me realize that I wasn’t really living when I was spending my money on consumer goods.  I was struggling to survive.  It was stressful trying to make it until the next payday without any cushion.  Trying to maintain the appearance of “rich” was causing me to go broke.  There wasn’t life in that.  It wasn’t living.

Today I feel more alive and in control of my life now that I have eliminated most of my consumer debt and have began saving money for the future.  Budgeting my life like I earn minimum wage allows me the freedom to live my life.  I don’t feel like I am merely existing.  That was how I felt when I was spending all of my money, not the other way around.