Updated: Sep 22, 2020
“We all spend too much time at a job we hate so we can buy things we don’t need with money we don’t have to impress people we don’t like.”
This year will be the biggest Holiday shopping season in almost a decade. Early reports suggest that by the time Christmas is over and the billions of dollars in gift card are spent, the American shopper will have consumed over $600 billion from October through December. Some experts expect that overall retail shopping will be up 25% by the time all is said and done which would make this the biggest Holiday spending spree since before the Great Recession.
According to the Confidence Board Research Group, consumer confidence boasted its highest reading (129.5) since 2000 this past November. Americans are feeling more confident about the economy and because of this, they are ready to spend.
It’s interesting to me that in economics, consumer confidence is equivalent to consumer sentiment. In other words, economics tries to establish a qualitative measure to represent the American consumer’s level of confidence and optimism towards their financial prospects. Some might even call consumer sentiment the consumer “happiness metric.”
With the Holidays almost over and having spent my fair share of money these last two months, I couldn’t help but wonder: why do Americans spend so damn much? Furthermore, does spending really translate to happiness?
In psychology there is a concept called the Hedonic Treadmill, which states that humans tend to return to their base level of happiness over time. The Hedonic Treadmill Theory (or Hedonic Adaptation) claims that in the long run, no matter what happens to a person on the external level, it cannot make them more or less happy.
When you think about it, this theory explains a lot. There is a reason you fall in love with you new car but months later you’re already dreaming about your next new car. Similarly, Hedonic Adaptation explains how retail therapy can be a great thing in the moment but in the end, you return to your previous level of happiness.
It’s taken me a long time to realize this truth. As I’ve mentioned in an earlier post, if you were to have asked me 5 years ago what I wanted to be when I grew up, I would have told you “I’m not sure, but I will have lots of money and lots of nice things.”
As a kid, my parents were extremely frugal and it seemed like all of my friends had parents ready and willing to shower them with toys and gifts. This left me always wanting “things” to make me feel as important as my friends. My buddies wore Nike’s growing up while I wore the Payless generic brand. Back then, life was teaching me that you needed things in order to be important.
As the kid who always wanted what my friends had, I developed a serious attachment to my “stuff” as I got older. I spent all of my money on things I didn’t really need in a lame attempt to make myself feel better and more important. My room was full of cool stuff like an IPad, Xbox, Nikes, nice clothes and many other cool gadgets. I thought I was building an inventory of “stuff” that would eventually fill in the gaps of my life where I felt I wasn’t enough. If I was insecure, that was ok because I had nice clothes. If I was broke, I could always just spend money on my credit card so people wouldn’t know I was living beyond my means.
As you can see this was a vicious cycle and it ultimately led me to a place of sadness and an even sadder bank account. I wasted all my money on things that made me feel happy for a moment, but that moment was always fleeting—and it seemed to happen more quickly with each thing I bought.
What I didn’t realize then was that I was looking for something outside of me to compensate for something inside. I wanted the “things” in my life to make up for the “things” I wasn’t—namely confident, assured and responsible. I wanted to make up for all the times my friends had something that I didn’t. I wanted to be the one that others envied.
The truth is, however, I was creating a version of myself that was inauthentic, a version that others might have envied, yes, but only on the surface. If they only knew the pain I held in my heart and the money I squandered just to earn their respect.
This gesture was clearly miscalculated and as I’m sure you can imagine, it only led to suffering and more self-doubt. It wasn’t until this last fall while at silent retreat, did I realize that I was being held hostage by all my “stuff.” Since then my wife and I have made an effort to throw away the things we don’t need and stop spending money on things we want, but aren’t necessary.
I have to say, it is extremely liberating to get rid of the crap you don’t need in your life. My wife and I live a simpler more fulfilling life now that we have time, money and space for the important things. For us, we would rather spend our hard earned money on activities that will only improve our well-being and create lasting memories. Instead of things like clothes and toys, we spend our money on things like books, vacations, trainings, therapy, certifications courses etc.
In the end, I want to leave you with this: I'm by no means perfect with my money! There are still some things I want in life but now I know they won’t make me happy. Only I can make me happy and what makes me happy is knowing what I stand for, knowing my mind, knowing my loved ones and being my authentic self… You certainly can’t purchase that in a stores.
Thank you as always for reading. We hope you had an amazing Christmas and Holiday Season! We would love to hear how you spent time with your family and friends rather than on gifts. How did that make you feel? Make sure to drop a note and remember, what endures in our lives is not “stuff” but rather, it is our memories.