(Guest Post by Barbara “Babs” Wagner – author of last week’s “what old people know” post. I liked her stuff so much I thought I’d post up another one! And plus, I’m out at USAA’s headquarters today getting my learn on ;) Let me know if you wanna see more of her? Maybe she’ll get a weekly thing?)
I’m a bit confused by some news I heard lately. Although the economy remains in the tank, there’s a bright spot called “aspirational spending.” If you’ve never heard this term, it’s when you make expensive purchases to match the lifestyle you want to be living, instead of the life you’re actually living. (Thanks Katy at TheNonConsumerAdvocate.com for this definition.) Apparently, businesses like Tiffany’s, Coach, Movado, Sam Adams Beer, and Abercrombie & Fitch are raking in profits like drug dealers, despite general consumer disinterest in spending. Turns out, there are a lot of people that aspire to the good life even in the worst of circumstances. Or in the case of the cast of Jersey Shore, some people who just aspire to the worst of behavior and call it the good life. But I digress.
All I can say is, “you go girl/boy, spend that money and get the economy moving.” Woop Woop! I totally believe in the power of corporate greed to improve our lives. If Tiffany’s is selling more rocks, they’ll hire more non-union, minimum wage rocksellers, and everybody wins. I’m definitely not one to stand in judgment of the spending habits of others: when it comes to aspirational spenders, it’s not a choice – they were born that way. (Before I forget, I must point out that I’m neither endorsing nor hating any of the aforementioned brands. Wouldn’t dream of it; they all have high-dollar lawyers on retainer.)
But some folks aren’t on board with economic prosperity through aspirational spending. Google “photos of Bill and Melinda Gates” and take a look. Their clothes are pretty understated (I’m being kind, they’re just plain dull). They aren’t wearing current fashion; they might have bought their clothes this year or 10 years ago. They might have stolen them from their grandparents. Get out your magnifying glass—not a single recognizable label on anything. Melinda’s not rocking the Dolce and Gabana logo on her handbag, and Bill’s old-guy polo shirts are completely free of polo ponies. And you won’t find even a tiny bit of bling on either of them. Didn’t they get the memo on how rich people are supposed to look?
Here’s what their lack of conspicuous consumption is telling the world:
- They’ve decided to let their deeds do the talking, not their purchases. Risky move. No one will ever notice how rich they are if they keep dressing like the homeless and giving away billions.
- They’re not gracious enough to provide free advertising for other businesses by wearing their labels. I guess Bill figures nobody advertises Microsoft for free, why should he and Mel be stooges for Tommy Hilfiger?
- They’re unwilling to go along with the herd, and insist on defining “the good life” in their own way. Good luck with that. I seem to recall Bill left the herd at Harvard to start a little computer business. Look where that got him.
True story: several years ago in Vegas, a guy was teasing me about a souvenir t-shirt I purchased. I responded that it wasn’t just a cheesy souvenir, it was a nifty addition to my wardrobe. T-shirts are cheap, durable, and you can wear them with any ensemble ($5 bucks to any straight guy who can say ensemble with a straight face and really mean it. Pay the man J$). After a hard day of wear there’s no need to rush to the laundry, just throw them in your gym bag and “recycle” them as workout wear. They also double as sleepwear and they make excellent rags when you’re finally tired of them. That’s a lot for very little coin. He was unimpressed by my pitch. Then I mentioned I’d read The Millionaire Next Door, enjoying the part about millionaires not spending money on appearances, and I’d been inspired to go through life in cheap clothes while laughing to myself because I was a millionaire. Wishing to be honest, I explained I only had half of the million, but I still enjoyed this little joke with myself. Shut him right up.
I’m really not a braggart, but the conversation had started off stupidly. This guy had lost two grand at a casino the night before. He was bragging that he’d been doing so much high-stakes gambling, they comp’d his room and meals and he was living large. No kidding! Only the really wealthy pay two grand a night for a standard hotel room and a pass through the buffet. He was truly ass-pirational! I should have kept my mouth shut but I felt bad after hearing his tale, what with having to pay $79 for my room and the $500K thing.
Try it yourself: the next time you choose to do something economical, like buying your wedding dress at Goodwill, tell yourself it’s aspirational spending. You might find it mildly amusing. Even better, tell others you’re living like fellow millionaires B & M, and let them wonder. It’s no one’s business whether you actually have the million or not, what’s important is that your stuff looks the part.
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Guest post by Barbara “Babs” Wagner – a former poster child for financial misadventure, who learned most of what she knows the hard way. She has a degree in business and has studied personal finance, most of which she now ignores. Her mission is to poke fun at conventional wisdom, keep money subservient to her values, and inspire others to learn from her mistakes.
(Photo by @Saigon)
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Great post! Fun to read and good tips! Laughing and learning at the same time :)
I have a similar desire to dress someone down when they scoff at my used car or sparsely furnished home & wardrobe. I’ve had to restrain myself from asking them “How much do you actually OWN? Or is your life full of credit debt and payments? Because my things are MINE – not just on loan hoping I can use future earnings to pay them off.” At the end of the day – I can relax knowing I don’t owe anyone anything… even explanations… so I keep my diatribe to myself and just relax………. =)
Sam Adams = aspirational spending? Okay, I just learned that I am apparently a beer snob. ;-) Seriously though, beer is one thing I won’t go cheap on, unless of course it involves my husband making beer, because then it is both cheap and tasty! Also, I am a big fan of supporting local microbreweries, but that has more to do with trying to support local businesses in general, as opposed to trying to “prove” to the world that I’m affluent, or some such nonsense.
I do think it’s important to note that there’s a difference between conspicuous consumption (wearing clothing/buying products that are covered in logos from “high-end” companies – I pretty much refuse to buy any product with a logo, regardless of whether it’s high-end or low-end!) and simply choosing quality over quantity. The former is based more on external pressures, wanted to show the rest of the world that you have lots of money. The latter is about your personal values, wanting to spend a little extra money on something that is well-made and will last a long time, which would ultimately save money and is typically more environmentally friendly since you’re consuming less overall.
That said, I totally agree with Darla’s point – there is no point in buying something shiny and new if you can’t actually afford it. When my husband’s car was on it’s last leg a year ago (with 130k miles on it!), we had to decide between taking out a loan for a new car versus paying cash for a used one. We bought a used car for $3100 because we were able to write a check to pay for it in full. It’s far from fancy, but it’s SO nice not having a car payment to worry about!!
I think there is a big change in how we spend. I have seen it in my own spending habits and those of clients. I don’t think it is as much aspirational spending as it is finally learning quality over quantity. I used to be the girl who would buy any item of clothing or any pair of shoes if they were cheap, not caring how long they lasted, if they truly fit and looked good, or if I needed them. These days, I buy much less. I rarely go out shopping and come home with 5 or 6 bags overflowing with stuff. (And that is all it was… stuff.) Now, I go out shopping and I come home with one or two items. Sure, maybe the top cost me $60 instead of $10, but I will enjoy it much more, will get more use out of it, and really truly love it. I spend about a quarter of what I used to on shopping, but I get higher end items. It is all about quality. And I have seen that with so many of my clients. So maybe it isn’t as much aspiration as it is more intelligent spending. (At least for the majority of people…)
Great post! I do want to point out that you can look good without the fancy labels-it’s what the consignment stores and the knock-off market is all about ;)
Babs is so funny, and I love what she has to say. She definitely sounds like she writes from experience. I would love to read more please!
Couldn’t agree more. Plus, have you noticed that most millionaires (or anyone super rich) don’t feel the need to point it out to others. I think that is a sign of true class.
I can definitely see this as a weekly thing. I love her stuff so far.
Barbara, I really love your posts. J, it will be great to see more of Babs around here.
Thanks to all for your comments. I enjoy sharing my ideas, especially when it enables J$ to keep goofing off on the road–hearing YOUR thoughts is just the icing on the cake.
Brandon, Molly, Maria, Jenna and Rafiki: thanks for your kind words. If I was 40 years younger, you’d all be my BFFs.
Stephanie, I hear ya on Sam, definitely scratched my head to see him on a list of aspirational brands. I feel so sorry for the poor drinkers with nothing better to aspire to. (Note to SA corporate lawyers–I’m not hating on you).
Miss Delish: I totally agree with you and Stephanie, buying a few quality items isn’t the same as aspirational spending. I myself have forsaken cheap t-shirts for more classic styles. But I’ll bet none of us has a Movado watch!
Darla, I prefer to characterize my thoughts as “rant” not diatribe. But really dear, let’s stay on the moral high ground. Relax, smile and say to yourself, “I’m gonna be rich and you’re not–neener, neener, neener!” Doesn’t that feel better? :)
I think it’s all a matter of values – spend on what matters to you and what makes you the happiest (and won’t drive you to the poorhouse, of course). There’s nothing wrong with aspirational spending on things that bring you more joy and that you can afford.
Haha, what a fun read!! Hmm, aspirational spending. I aspire to …. er …. look cute. But I don’t think I need to spend money for that. I think I just need to stop eating so much darn ice cream.
Babs, a movado watch I do not have, but I have been saving for one. But then again, I love watches and have all sort of them. Michael Kors, Skaagen, D&G, Burberry… Yeah, I am a bit obsessed with my watches.
Well, a friend of mine by way of being the wife of my fiance’s best guy friend is pregnant. YAY for babies! BUT, she wanted me to help her with choosing a chandelier for the nursery (don’t get me started on THAT). She said one was crazy pricey, and the other was more affordable. She showed me one, and I asked how much it was $100.00. I pretty much blew my top! $100.00 for a chandelier….or a nursery?!?! Then I found out that was the “affordable” one. Oy vey. I understand kids are expensive…but sheesh! I told my fiance that I don’t think we need fancy furniture and a chandelier for our future kids; money for their future is so much more important. Neither he nor I had fancy things growing up or now, but life is GREAT without them. “We got heaven on a paper plate” -Roger Clyne.
Great post Barb! I just don’t have the heart (or the money) for aspirational spending. I’ll keep my budget sexy ;)
Thanks again for the post Babs! REALLY glad to hear positive feedback here…. that column is getting closer to being real ;)
@Darla – YES!!! “At the end of the day – I can relax knowing I don’t owe anyone anything… even explanations… ”
@Stephanie, Miss Delish, Well Heeled Blog – I agree too with that actually – that you can want nicer clothes other than to just show off. I’ve been starting to buy higher quality too lately.
@Maria, Rafiki, Maria Nedeva – Good to know!! I’m really considering it, so that helps me out – thank you :)
@Paula @ AffordAnything.org – Hahaha… that comment was cute!
@Sophie – Maybe it was a crystal one? :)
Thanks SO much for this post!
Not only was it hilarious (especially the Bill Gates bit), but it was exceptionally reassuring to people like me, who dedicate $30 a month (IF THAT), to the clothing portion of my budget.
I may not have the best or most expensive clothes, but guess who’s well on their way to paying off all her debt!
It’s you, it’s you!! :)