Are falling credit scores, the high rate of foreclosures, and personal bankruptcies the result of Americans feeling so insecure about themselves that they overspend in an effort to “keep up with the Joneses?”
Some financial gurus say yes. Along with envy, a belief in entitlement, and a need to spend in order to “feel better about oneself,” trying to keep up with the Joneses has led far too many Americans into crushing debt.
Think how many times you’ve heard statements such “I really can’t be seen in last year’s swimsuit!” or “I work hard, so I deserve this.”
Of course many don’t say those things out loud, they just feel that somehow they “should” be able to install a swimming pool, drive a new SUV, or buy a 52” flat screen plasma TV because their neighbors or their friends have them. If they didn’t do the same, those friends and neighbors might look down on them. Can’t have that.
So, armed with little pieces of plastic called credit cards, Americans marched off to the vendors and came home with the goodies – at a price that became impossible to pay when credit card issuers suddenly raised their interest rates and reduced credit lines.
So now what? With their credit scores in the basement and their credit lines gone, those consumers don’t have the means to continue buying all the “stuff” they didn’t need in the first place.
The possible up side of this crisis…
Change is often hard. But perhaps this change can turn out to be a good thing in the long run. Perhaps children growing up in this different atmosphere will learn to be happy without a steady flow of new toys and distractions. Perhaps adults will learn to enjoy what they have instead of trying to find fulfillment through spending.
This credit crisis may even be good for the earth. When people don’t have credit card lines to spend on trinkets that are quickly tossed aside, perhaps our landfills will cease to be overburdened with cast-offs.
My prediction: Those who can take this in stride and quit judging their own worth by their ability to engage in conspicuous consumption will be the winners in the next few years.
They’ll cut back on unnecessary spending and find ways to save even on necessary spending. They’ll get those credit card bills paid and rebuild their credit scores – and will have learned enough not to use their credit to excess in the future. And, hopefully, they’ll teach their children by example, so the next generation won’t get into the same mess.
Who knows, maybe people will begin taking pride in thrift.
Author: Mike Clover
CreditScoreQuick.com
