Many people prefer to spend money and not save it.
What are the reasons?
Is this a positive or negative development?
In today’s consumerism society, managing our monthly income is sometimes being neglected by many. Some people overlook the importance of having a culture of saving, let alone compounding. This essay will examine the causes of the present human behaviour about money. In my view, the current trend is both a negative and positive development.
Consumerism is one of the reason why many people end-up buying things excessive to their needs. Individual spending habits are increasing year-on-year, people tend to spend their income the minute they receive the money without considering the consequences that lies ahead. Citizens especially in developed world are pressured to keep up with peers, taking social- status for instance, if a neighbor or a friend buy an expensive car then someone are pressured to purchase the same or even higher in terms of value. Everyone overspends a little and splurges on occasion, but “Keeping up with the Joneses” can lead to financial ruin.
Increased in spending, however, should not only focus on the negative side of the story. There are also valid reasons for the increased in spending that lead people to have little or no savings at all. For example, taxation increases and social services contribution. While it would be difficult for someone to enjoys paying taxes, some people recognise the positive impact to the society. In theory, higher taxes lead to more comprehensive social services and better infrastructures.
In conclusion, expenses go up a lot easier than go down and it is very difficult for some people to stop spending but overspending on wants provide short-term gratification with long-term prices to pay.