American Consumerism: Why We Shop

The United States has long been plagued by one of the lowest saving rates in the developed world. After hitting a low of 1.5% in 2005, this rate has since increased slightly to around 3%. What this means is that generally, Americans barely break even despite earning incomes that average higher than most other countries. To further put this into perspective, 48% of Americans have more debt than savings, giving them a negative net worth.

But what do Americans spend all of their money on? All of this.

We feel the need to purchase more than we can afford even after the recent financial crisis. Americans seem to have an obsession with keeping up with one another. Wealth is a huge status symbol in the United States as it signifies ones success at navigating the capitalistic system. Easy credit and a culture of loans makes it easy for people to pretend that they make more money than they do, living beyond their means.

One of the most common ways for Americans to splurge is through the purchase of luxury homes or McMansions. The average size for an American home is about 2,300 square feet, compared to about 800 square feet in the United Kingdom. Many Americans would not even consider living in an 800 square foot house.  

Many other cultures place more value on other things such as education, family ties or social abilities. In these countries, residents are less likely to purchase out of insecurity because financial status is not a top priority.

Ironically, Americans who spend more money than they make as a way to prop up their lifestyle end up actually having no money at all. Across the United States, people routinely become bankrupt and lose their homes to foreclosures because they are in over their heads. Trying to appear rich can end up keeping you poor!