Buy More Stuff

Stuff, stuff and more stuff.  

We buy "stuff".  We don't need most of the "stuff" we buy yet we buy it anyway.  It's fills our homes, our shelves, our offices.  I've seen bookshelves filled with tchotchkes and trinkets and collections of little ceramic frogs...stuff, stuff, stuff.  And what does that stuff cost us in the long run?  A LOT.

For those of you who are living paycheck to paycheck and I know there are some of you out there who are and even for those of you who are not living paycheck to paycheck I want you to take a look some of these figures below and then think about how important the "stuff" is that you buy in relation to your financial reality.

The average price of a Grande (medium) coffee at Starbucks is $1.95.  That's just a regular coffee and not one of the fancy dance kind like an Iced Carmel Macchiato (Grande costs $4.45)

So if you get one cup of coffee every day for a year you're spending $709.80 each year on coffee or if you get the Iced Carmel Macchiato that's $1619.80 for the year not including tax.  

According to Value Penguin in 2014:

• The average yearly cost of car insurance was $907.38 
• The average cost of homeowners insurance was $978.00 (That's average).  For those of you living in metropolitan areas...it's MUCH higher.
• According to eHealthInsurance's 2011 Annual Insurance Survey, the average monthly premium for individuals in the United States was $183 (or $2,196 per year). Furthermore, the average monthly premium for families was $414 (or $4,968 per year).  Between 2010 and 2011, average premiums increased 9.6% for individual policies and 5.6% for families.  

These are just a few of the things we have in our lives that add onto our cost of living.  But yet...we buy STUFF and oftentimes don't have enough to pay for the things we really need.

I, like many people, am in stores all the time.  Whether it be food stores, computer stores, Staples, Target you name it and I'm constantly amazed at what people put in their carts.  

I've literally been standing in a check out line and seen people just blindly look at an item and throw it in their cart.  Why?  Because it was "on sale."  What I wanted to ask them is: Do you REALLY need that Oven Mitt with an image of a Rooster on it? 

Or that ceramic frog dish sponge holder?

Do you REALLY need to get that Grande Iced Carmel Macchiato for $4.45 EVRY DAY that has 231 calories and 31 grams of sugar (which is horrible for your body by the way)? 

Look I'm all for buying things that make us happy and things that give us pleasure but buying things that will put us in debt?  Nope!  We need to think about the STUFF we buy in relation to what we need. I mean come on...EBAY and Craigslist are FILLED with crap that other people bought and are now trying to sell to you!

Here's the bottom line of this issue.  In the early days we bought only what we had the money to buy.  After the barter system and exchanging services for goods we came up with money in the form of gold and silver etc. Crazy thing this money and the Federal Reserve (which is a private entity by the way and not part of our  Government) is even more insane, but we can get into that later.  

I digress. Here's the math, when my parents were kids if something cost X dollars then you had to pay X dollars...CASH to get it.  There was no credit in terms of how we have it now.  No credit cards and the like.  So if you didn't have the available cash you weren't able to buy the thing you wanted to buy.  You either had to save enough to buy it or buy something less expensive. Period.

But now we've gotten to the point where that little plastic card can "solve all of our problems."  Why? Because it's not real to us.  We don't have to confront the reality that we might not have enough money to buy the thing that we want so we'll "pay it off over time" at an exorbitant interest rate that will take YEARS to pay off and will end up costing us 2 to 3 times more in the long run due to the interest we've paid during that time.  

Let use an example credit card with

• Balance of $5,000
• APR of 15.99%
• Current minimum monthly payment of $110

Below are the total costs in time and interest for this card if you the consumer only paid the minimum monthly amount each month as required by your provider.

• Almost 25 years to pay off
• Total payments of $12,006
• Total interest paid $7,006

Now you might have a card with a 9.99% interest rate...but your still looking at 227 months (almost 19 years) to pay it off with say a $100 minimum payment.  Scenario is still the same and that's just a $5000.00 balance.

And, unlike a house (but there's even questions on this as well) there is no long term residual value (equity) to most things we buy. You buy a computer and you're sure as heck not going to sell it for a profit.  A piece of high quality jewelry...maybe.  But look, even gold and silver fluctuate like crazy.

OK, ok, ok...why am I saying this?  We all know it, we've all heard it and most people have to stare at their credit card debt every month and wonder how the hell am I going to get out from under all of these bills?!  It can be daunting and at times terrifying.  

I want you to think of a couple of things as you move forward (especially you artists out there who live in one of the most volatile professions around).

1. CONFRONT YOUR SITUATION.  Look at it squarely in the face and confront the reality of your finances. I know this can be hard, especially if you're really underwater.  But you MUST do this step.  By confronting it (and this holds true for everything in our lives) we can gain control over it.
2. MAKE A LIST of the "stuff" you buy that you don't need.  I mean REALLY don't need and remove those items from your buying lists.  I did this once and ended up saving myself close to $150 each month on just frivolous things that I "thought" were important or that I "rationalized" away as something I like to call an 'it's just.' "It's just a Starbucks...I can treat myself to that."  NO, if you're facing financial issues...you can't.  (Besides it's full of GMOs, Sugar and is NOT healthy for you!  You'll be saving money in medical bills in the long run so this is a double savings here!)
3. MAKE A BUDGET of what you REALLY have to spend money on.  Things like:
1. Rent/Mortgage
2. Weekly food (What you NEED)
3. Insurance (Home, Health, Car)
4. Car Payments and Gas
5. Student Loans (don't get me started on this one)
6. Laundry
7. Utilities
8. A Fun Fund (This is your time for the movies or a date night with your spouse.  We have to keep these things in our lives. But keep the expenditures within reason.)
4. LIVE WITHIN YOUR MEANS.  Once you've made that budget stick to it! DO NOT spend more than you have.  Seriously...DON'T
5. STOP RELYING ON CREDIT.  It will get you nowhere but further in debt.  
6. MAKE MORE MONEY!  I know, I know...I hear it all the time the "But I can't..." "But I try..." "But there's not enough work!"  Wrong.  There's a TON of work and a TON money out there and you CAN make as much as you want.  (I'll be addressing different ways to do this in the future as part of the new program we're rolling out.  I'm excited about helping you reach your goals in whatever field you've chosen!)

Here's the most important thing.  

CHANGE YOUR MINDSET.  Don't live in the deficiency live in abundance.  Yes, it takes work, it takes discipline but failures are the stepping stones to our success.

START!  It just takes one step at a time and soon you'll be running up those stairs!

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