When Our Eyes Get Bigger Than Our Wallets

by DavalosMcCormack on August 20, 2008

The other night Shirley and I were out with a friend for dinner. He was telling us his wife wanted to re-do the house. Again. The bill for the kitchen alone (Viking stove, granite counter tops, stainless steel fixtures etc) was more than $200,000. He was gobsmacked, particularly, as he pointed out, that they only cook once a year, at Thanksgiving. The rest of the time they just heat stuff up.

The amazing thing is not that his wife wants to spend that kind of money for something she probably won’t use and almost certainly doesn’t need; the amazing thing is that there are so many other people out there who want to do the same.

In his book “House Lust”, Newsweek writer Daniel McGinn explores how so many Americans are not just buying homes way beyond what they can afford, they are doing renovations they don’t need, and paying for them with money they don’t have. And there’s a whole industry of people helping them do that, from magazines like Home & Garden, to cable TV networks like HGTV that seem to specialize in telling you what to buy, and how to make it over into something even bigger and better once you’ve bought it.

Take for example house size. In Britain and Italy new homes average under 1,000 square feet. I grew up in a house like that. It’s compact but has most of what you need. In the US by comparison, the average new house is 2,434 square feet. And many are two or three times that size. Often for families with two or fewer kids. Clearly this is not about need, it’s about show. It’s having something that screams to everyone who comes in the front door “I’ve got loads of money”.

And of course a house that big needs a lot of furniture. And carpets. And paint. And drapes. And lamps. And any number of other accessories from throw pillows to pointless ornaments that you put somewhere just so they can look, well, ornamental.

Whatever all this spending is buying people it’s certainly not buying them happiness. A new study by psychologist Miriam Tatzel, PhD, of Empire State College in New York, compared people’s spending habits with their sense of well-being. She found that big spenders – defined as people who spend a lot on expensive purchases and carry a lot of credit card debt – use all their available money to buy things and are the least happy, compared to others who buy what they need or live within their means.

Those purchases can be everything from a new house to a new phone (iPhone anyone!) or new car they don’t need, because the cell phone or car they already have work just fine. These are people whose choices are shaped not by what they need but by what they feel is necessary to reflect how cool they are, how successful they are, how stylish they are. The price is frequently credit card debt. In some extreme cases it’s bankruptcy.

Now clearly this is not a healthy way to live, and I’m not just talking financially. I’m talking emotionally and even spiritually. How can you be happy or truly enjoy life when you are constantly measuring yourself against what other people have. If they have the latest tech gadget and you don’t you somehow feel less sophisticated, less worthy, or just less.

If it’s limited to the occasional individual gadget like an iPhone that’s not too dangerous. But when that one purchase becomes part of a pattern, a new computer, new giant flat-screen TV, and then you start following that same pattern with cars and even homes it is easy to see how so many people are in deep financial distress.

The humorist, Harold Coffin, once wrote “Envy is the art of counting the other fellow’s blessings instead of your own.” Most of us have so many things we should be eternally grateful for, but too often we’re busy looking at what we don’t have or at people who have more, to appreciate our own good fortune.

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