Class Discussion & Video: Why do we buy so much?

American Public Media’s Market Place recently aired a program titled “The Truth About What We Buy” that dealt with happiness and buying “stuff.”  Much of this story focused on a new book by James Roberts, a professor of marketing at Baylor University, titled “Shiny Objects: Why We Spend Money We Don’t Have in Search of Happiness We Can’t Buy.”

There’s no question we buy and discard more than we need to.  After all, did you know that Americans discard 140 million cell phones every year?  And when it comes to plastic bottles, we discard 2 million plastic bottles, not every day, not every hour, but every five minutes.  Professor Roberts argues that the American Dream now revolves around a desire for fancier clothes, sleeker cars, and larger homes – the Lucky Jeans, bling, Hummers, only the latest version of the iPhone, giant televisions, purebred lapdogs, McMansions, and Abercrombie & Fitch or the “in” clothier of the day.  In his book he not only discusses what motivates you to buy what you do, but he also looks at the relationship between materialism and happiness.

In addition to being a part of the Market Place program, Professor’s Roberts book was also reviewed by The Wall Street Journal in an article titled “Spend It or Save It?”  In contrast this article also takes a look at a book written by Rutgers history professor James Livingston titled “Against Thrift: Why Consumer Culture Is Good for the Economy, the Environment, and Your Soul.”  Interestingly, Professor Livingston’s book was also the focus of a recent story on American Public Media’s Market Place “The Argument Against Thrift.”  Professor Livingston argues that Americans’ efforts to reduce spending in the recent recession have prolonged the recession, and that consumer spending is the key to restarting the economy.

Take a minute and look at Principle 6:  Waste Not, Want Not – Smart Spending Matters and Principle 9: Mind Games and Your Money in the personal finance book “Personal Finance, Turning Money Into Wealth”.  There is clearly more and more evidence that “shopaholics” are among us.  The media bombards us with all of the “must haves” and we can’t turn away.  Behavioral biases can lead to big financial mistakes.  But, rest assured, as you study personal finance you will begin to understand that managing your money involves more than just saving and investing – it also involves spending, specifically smart spending.  It can be done – you can have the things that make you happy and even “help” the economy along as long as you are “smart” about the spending you do to meet your needs while being thoughtful about also protecting your future.

Class Discussion questions (be prepared to share your response with your class):

  1. Have you ever seen an advertisement that has made you want to buy something you didn’t even know you wanted beforehand? What was the item?
  2. In the article “Spend it or Save it?” the author talks about his desire for the world’s most expensive food processor.  Do you have any desires for an “over-the-top” item?  What is it?
  3. What things do you see other people buy to impress others that are excessively expensive?  What do you think of this behavior?
  4. Were you a spender or a saver on Black Friday?
  5. How about on Cyber Monday, were there any deals enticing you to spend?
  6. Do you agree with Livingston? Do you think your spending or saving is helping or hurting the economy?

 

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