Why do we get the urge to spend money? Why are most of us on a hedonic treadmill, endlessly upgrading stuff with “better” stuff? Is it because credit is so easily available? Are credit cards, which makes it oh-so-easy to spend money that we don’t have, to blame, as we argued sometime back?
I am convinced that the main reason that most of us are on a financial hamster wheel is due to our tendency to keep up with the Joneses. As regular readers know, our twin boys were born last year and we spent most of the past year in an endless cycle of feeding and changing. Naturally, we were mostly confined to our home and our social life was severely restricted that we hardly got a chance to visit our friends.
Sometime back, my wife took the boys to visit her family and I started to attend barbeques and watch soccer games with our friends. And that is exactly where I got the urge to buy more cool toys.
One of my friends had recently purchased a flat-panel LCD TV and I have to admit that a soccer game looks a lot better in HDTV format. It is much harder to go back to an eight year old, bulky television and soccer broadcasts in a standard TV format. Another buddy of mine recently showed me his newly acquired Tablet PC. Now, I have a fairly new laptop at home, but still I felt that all the cool features of the Tablet PC makes it worth having.
Fortunately, I haven’t acted on my impulses, though I am still lusting after a flat-panel TV and dreaming of watching hockey games in a spectacular format. My favourite Yahoo! Finance columnist Laura Rowley offers the following cure in a recent column on this very topic:
To overcome money envy, we need to figure out our purpose, identify what we love and value most, and make our money obey our values by setting specific financial goals. Because if we achieve the things we value most, we’ll be less riveted by what the neighbors are doing.
It’s just that it is easier said than done.