Frittering Away Cash: How Luxuries Become Necessities
How many of your luxuries have become necessities? For me, it was my Treo cell phone. Back in the mid-1990s, I got a deal on a Bell Atlantic phone through my former employer – something like $25 a month for 500 minutes. (The thing weighed about 40 pounds.) In 2000, Bell Atlantic acquired GTE and changed its name to Verizon, continuing to honor my deal. Until last year, I was paying an average of $35 a month for my cell, which I rarely used.
Then I missed an email from a producer at CBS Evening News, who was requesting an interview for a story they were doing on debt. By the time I returned the call, it was too late. I had missed the opportunity to preach the anti-debt message. (And my book had just come out in paperback; the publicity would have been nice too.)
Suddenly a Treo became a necessity, so I could check my mail on the fly. Now I pay about $90 a month for unlimited calls and messages – or an extra $660 a year.
“The ratcheting up of needs is a difficult problem for us to handle; this is an ongoing problem in an age and a culture which produces a lot of rapid innovation,” says Stuart Vyse, psychology professor at
I interviewed him for my Yahoo!Finance column on “America Saves Week.” “Things we never considered a possibility can rise to the level of a need, such as computers and cell phones,” Vyse explains. “It’s not as though other needs go away; the (innovations) become an added expense. It wasn’t that long ago that basically no one had a cell phone – you had a land line and an answering machine. Now a cell phone is considered a necessity by more than half of Americans, and in many cases that’s a bill added on top of the land line.”
Vyse says pharmaceuticals are another category of continual product advancement that most people don’t think about. “The innovation in pharmaceuticals has created a tremendous additional burden,” says Vyse. “No one took Lipitor until it was invented, and now it is the most profitable drug on the market. Somehow that money is being absorbed by lots of people, and there’s no question it’s a necessity.”
Moreover, in a competitive culture, it’s hard not to envy — and emulate — the early adopters. “Iphones, Ipods all become part of our culture and easily flip over into the ‘need’ basket,” says Vyse. “You have to make an ultimate effort to say no to something everyone else thinks is a basic thing.”
I’ve found the definition of “need” becomes slippery as you move through different life stages. When I was single in my 20s, my needs were pretty simple – a tiny affordable apartment, a brown bag lunch, bus fare, a little savings, a good pair of running shoes.
Now – with a full-time job, a spouse who is often away for work, three kids and a house – the world of needs is all-consuming. Mortgage, utilities, school tuition, shoes that the kids seem to outgrow within a month, college and retirement savings. Two years ago I broke down and hired a cleaning lady twice a month. Now I need her.
What luxuries have become necessities for you?
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