Every serious debt reduction program starts with controlling spending, but this is easier said than done for most. However, it can start by better understanding the relationship between consumption and happiness, which is much less direct than most would assume. When this is done, it becomes easier to achieve real debt reduction.
Money cannot buy happiness.
While research has shown that having more money does significantly contribute to people’s sense of happiness and well-being when they move from poverty into the middle class, positive psychological effects of having more money and things are not so apparent after that. Once people have pulled themselves out of poverty and satisfied basic needs, the benefits of increased consumption are much smaller.
The reason increased wealth does not directly correlate to increased happiness is likely due to the fact that the emotional lift many people get from purchasing goods declines with higher levels of consumption. Like pursuing a drug which requires an ever-increasing dose to give the same high, positive feelings from shopping decline the more people do it.
Ways to unhitch spending from happiness
Those with debt problems caused by consumer spending likely have fallen at least partially victim to the idea that spending will buy happiness. Everyone experiencing these problems needs to take steps to get back on the road to better spending habits and eliminating debt.
Find a balance
Keep in mind that spending should only be done to buy what is really needed and can be used. Before buying anything, stop and think if the purchase decision is based on satisfying a real practical need or something else. Always balance the lost time in work (to pay for the goods) other opportunity costs that making the purchase will incur against the likely positive feelings and benefits it will bring.
Remember the benefits of downsizing
What people own ends of owning them. Often, having that larger house or those extra possessions are just burdens. The owner must pay, move and maintain them but only get marginal value out of having them in return. A simpler life, less weighed down by things, is often happier.
Being a consumer is not the problem if people just step back and get a handle on their spending habits. People appreciate and enjoy what they buy more though after they have spent some time looking forward to and anticipating a purchase. Hold back on buying that new product for a while. By saving for it first, the purchase will feel a lot more special, and the need to pay interest will also be eliminated.
Do not buy consumer goods on credit.
One way to delay purchases is to simply decide not to purchase consumer goods on credit. There is no need to complicate any purchase with interest payments and the like. If it is worth having, it is worth waiting for, and the anticipation that comes with waiting is a good thing.
Remember that experiences count more than things
Contrary to what many people might think, studies have actually shown that people get more enjoyment out of spending on non-physical things like vacations, lessons and leisure activities, especially when it is done with others, then they do on purchasing consumer goods. Money given away or spent on others has also been shown to give greater satisfaction.
Quality not quantity
Like anything that is done too much, over shopping in time just makes a person numb to the pleasure they get from it. Spread purchases out and make sure to get quality goods that will really be appreciated.
By keeping these things in mind, people can get more satisfaction with less spending, and the positive feelings of eliminating debt and increasing savings at the same time.