The US GDP is $23 trillion as of 2021.
67% aka $16 trillion of that is Consumer Spending.
$11 trillion was spent on services.
Think restaurants, travel, amusement parks, concerts, and sporting events.
Basically, things you experience in person.
The remaining $5 trillion was spent on goods.
Think clothes, shoes, washers, dryers, coaches, food (groceries), laptops, cellphones, etc.
As you can see, there is A LOT of money to be made for any business that sells either an experience or a product. So you can understand why a business would do just about ANYTHING to get you to buy their product or service. Hence the huge spending on advertising ($600 billion in 2021 and expected to grow to more than $1 trillion in the next decade).
If you listen to any business discussion in this day and age, you will quickly hear the words "Brand Awareness". Essentially, how do we get our names to be so known that people know exactly what they are getting when they get our product.
But more importantly, how do we ensure that our brand elicits an Emotional Response.
Starbucks is synonymous with coffee but more importantly:
It's the thing that gets you ready for the day.
It’s the break you need before your annoying boss calls you
A bit of relief and happiness for a busy mom.
Apple=Privacy and Seamlessness.
It also signals I'm of a high class (aka luxury brand)
(But if everyone has one, how can everyone be high class? 🤔)
Target is synonymous with affordable fancy.
It helps people signal to the world, “I’M NOT CHEAP”
(when in reality it's still the same junk sold at Walmart)
Whole Foods and Trader Joe’s basically signal I care about the environment and I am a healthy person
So brands use commercials, they partner with influencers and celebrities, just to find ways to get some kind of emotional response from us. That will get us to pull out our wallets and buy their product or service.
And to no one surprise, IT WORKS!!
It works so well because companies know one thing we ignore far too often. We, humans, are SOCIAL CREATURES.
We crave the approval of our various tribes. We want to be accepted. Because historically this was the way to survive.
When we began forming societies, we realized the benefit of not having to watch our own backs all the time. We were able to do more things, develop more things, and grow more things. It helped build the civilization we have today. People were able to specialize in different areas and create things people could never imagine. We were able to collaborate leading to amazing innovations.
But here is the problem; the things that got us to where we are today, are now the things that are inhibiting us from moving forward.
Compare the spending dollars to the total Personal Savings which in 2021 was $2.3 trillion.
And that includes an influx of excess cash given by the government due to the pandemic. So regularly that number is actually below $1 trillion.
Another way to think about this (and I will be extreme on this).
For almost every $20 spent on goods and experiences, an average of $1 is saved. But the good news is this includes things like bills and insurance.
So let’s take that stuff out.
It’s more like for every $5 spent on experiences or goods, most people save about $0.50.
Most people spend 10X what they save. No wonder stats like these exist
This is not slowing down any time soon. More than likely the number is going to increase more and more. With things like:
Shien, the ultimate Fast Fashion (aka use once and discard) site
Amazon, the ultimate ease of purchase site
Buy Now Pay Later Services
Apple/Google Pay (just need my finger or face)
Digital Items becoming more valuable
Subscription services for everything to make your life SEEM more convenient
The massive growth of influencers over the last decade.
There is absolutely nothing that indicates a slow down in Consumer Spending. The only thing that would slow this down is an ACTUAL Recession.
The annoying thing for me is when you ask people why they buy the things they buy. They NEVER HAVE AN ANSWER!!
OR
I saw it on IG or TikTok on some influencer’s page (who got it for FREE!!)
OR
My friend (who makes more than me) was going and they wanted me to come too.
If you are going to doom yourself to financial instability, would it not make sense to do it with a purpose?
I can speak to this because I did the exact same thing for years.
I wanted to be liked, to be accepted. For a long time, I just did what everyone else wanted, and spent money I didn't have to impress people.
AND Guess what?
IT SUCKED!!
I wore clothes, I did not like that were SUPER UNCOMFORTABLE! To impress people that did not care about me. I did things that were UNENJOYABLE to me to try to fit into a box that did not fit me.
IT WAS HORRIBLE!
I was broke and I did not even get to enjoy the money.
THAT IS THE ABSOLUTE WORST!
If I am gonna waste my money, I might as well waste it on things that bring me enjoyment even temporarily.
The point of this entire post, which more than likely was lost in my rambles, is simply to be aware of what drives you to spend money on the things you spend money on.
Ask yourself more questions about why you are doing what you are doing.
Then ask yourself if you can actually afford to do it at your current stage of life. Because even if you are doing it for yourself, you have to be honest about where you currently are financially.
Do not allow advertising or influencers or friends to determine how you spend your money.
Be mindful when you spend money. Don't fill your life with junk
GENEROSITY>greed
✌🏾