American Spending Habits

When the holidays come around, we spend more time with our families and friends. We talk about what has been going on recently in our lives and what dreams and goals we have for the future. Being an American, one thing I notice that Americans talk a lot about is things that they just bought or things that they want to buy in the near future.

Just spend some time with an American family and you will hear talks about topics such as cars, houses (and improvements made on houses), electronics (such as cameras, camcorders, computers, TVs, etc..), and investments (retirement funds, stocks, real estate).

Americans, in general, like to talk about how much money they saved when they bought something or about the features and benefits of something they just bought. So, if someone bought a new car, for example, he or she would tell you all the features of the car, including what engine size and warranty it has. Another example is the TV - maybe it has TiVo, or it's an LCD or the sound quality is great.

Whenever a new item is available on the market, someone buys it and wants to tell you about it. Take XM satellite radio, for example. If one of your friends bought it and is American, chances are, he or she will be excited to tell you all about all the channels it has and how the reception is great. Americans also like to ask if you have a new car or a new house or if you have made any improvements on your house. It is considered a good topic for small talk.

When they are done talking about things they bought, Americans then like to discuss things that they want to buy in the future. And, believe me, it is a temptation to spend money, because there are so many new items and bigger and nicer things to buy. You see advertisements on TVs all the time, reminding you that you should have something new. If you are trying to save some money, it's best that you stay away from stores all together. I say this because if you go to a store and see that there is a discount or a sale for something, you will buy it for sure, even if you don't need it. You will think, "Wow, this is a good deal. I should get it."

One last note I'd like to add is that the quality of certain items is not as good as it was in years past, however prices are not necessarily much lower. Take TVs, for example. If you want a fairly large TV, but not a wide screen one, you will pay over $300. This new TV will probably last between 10 and 15 years. However, 30 years ago, a TV was made to last longer, maybe 20 to 25 years. What happens is that manufacturers know that consumers want to change out their TVs for a newer one, so they are constantly updating TVs to be bigger and have more functions. And for all this, the price goes higher and higher. But, chances are, these new models of TVs won't last long.

Well, I said I was done, but I'd like to touch on one related topic - DEBT. Americans own and use several credit cards and easily accumulate charges that become hard to pay. In addition, they buy bigger and bigger houses and cars that cost increasingly more. It has become commonplace, therefore, for Americans to accumulate debt. And when it comes time to pay one debt (for example, credit card charges), if you don't have the money, you borrow it from somewhere else, say a home equity line of credit. Pretty soon, it becomes normal to have a lot of debt and to live the lifestyle of never being able to pay everything you owe. Some Americans don't worry about debt and continue to accumulate it because they are used to the comforts and conveniences. They don't want to have a budget or get rid of their cable or extra services. So, they become complacent about money. It becomes something that has to be spent but is never fully repaid. It is a dangerous game with a high price in the end.

The solution: I think Americans would do well to downsize a little when it comes to house, cars, and electronics.