Admire, Aspire, Acquire? No Thanks!

Is it possible to cure the UK of its rampant addiction to consumerism? One answer may be to heal ourselves one by one...

"Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one."

From Extraordinary Popular Delusions and the Madness of Crowds by Charles MacKay (1812 to 1889)

Recently, while watching Andrew Marr's excellent A History of Modern Britain on BBC2, I let out a howl when I caught sight of a banner as the camera panned along a city centre. This flag, on the Victoria Quarter Arcade in Leeds, read: Admire, Aspire, Acquire.

Of all the dreadful straplines encouraging us to lust after consumer goods, this is perhaps the worst that I've ever seen. Do people really believe this drivel -- that 'retail therapy' will make them feel better about themselves? Have we become such slaves to conspicuous consumption that only more and newer consumer goods will fill the empty spaces inside us?

One consequence of our 'urge to splurge' is that many retailers and other organisations aim to cash in our unwillingness to curb our spending and live within our means. As a result, some firms refer to the UK as 'Treasure Island' and enrich their shareholders by taking advantage of hard-pressed consumers. This is particularly the case for captive audiences, as I warned in Ten Infuriating Swindles!

So, how bad is our overspending habit? One estimate is that, as a nation, we spend £110 for every £100 in our pay packets. In other words, we spend a tenth (10%) more than we earn, which forces us to do two things: dip into our savings, and dig ourselves ever deeper into debt. Indeed, we Brits now save only £1 of every £50 of take-home pay.

Obviously, if we constantly bust our household budgets, then we're going to build up bigger debts. Indeed, when Labour came to power in May 1997, British borrowers had £84 billion of unsecured debt (including credit and store cards, car and personal loans, overdrafts and so on). Ten years later and this figure now stands at £214 billion, according to the Bank of England.

This helps to explain why one group is doing very nicely out of our compulsion to spend: banks, building societies and other lenders, whose profits have rocketed as personal debt levels have soared.

So, it's pretty clear that a good deal of Britain's material affluence is an illusion, fuelled by credit and supported by our 'live now, pay later' mindset. Scratch the surface and you discover the casualties of our rampant materialism and financial mismanagement, such as the 30,000 people in England & Wales who became bankrupt or insolvent in the first three months of this year. Can the UK really be in good financial health when 10,000 people become insolvent or bankrupt each month -- an all-time record?

What's more, things are set to get worse before they get better, thanks to rising taxes, falling disposable incomes, and higher interest bills as the Bank of England hikes its base rate. Thus, Britain's worshoppers (those who worship shopping) face tough times in the months to come!

The big question is: what can you do to avoid the problems which go hand in hand with overspending? The simple answer is to break free of the herd, be an individual, and do your own thing. This may involve:

• Avoiding shopping sprees and the temptation to spend.
• Being wary of objects of desire -- look, touch, but don't buy!
• Not being swayed by marketing or advertising.
• Recognising that, on the whole, designer labels and trendy brands are ploys conjured up by design agencies to make us part with more cash in the hope of appearing 'cool'.
• Understanding that consumer luxuries are just that -- luxuries, not something that you treat yourself to each week.
• Spending for spending's sake is just plain silly. What are you: a child in a sweet shop, lacking in any self-control?
• You may end up owning a huge number of things, but when is enough enough?
• If you merely want something, then you can't have it. Instead, you should be firm with yourself and say, "I can have this only if I really need it!"
• Realise that shopping addiction has similarities to other emotional problems, such as eating disorders, drug and alcohol misuse, and depression. Buying new things may raise your mood, but this feeling is fleeting and will leave you worse off in the long run.
• Don't even attempt to keep up with the Joneses. Instead, tell them to take a hike! Take to heart the title of one of my favourite books, What Do You Care What Other People Think?

In my view, which I set out in Does Wealth Make Us Worse?, our national obsession with money, possessions, physical and social appearances, and 'celebrity culture' does serious damage to our personal finances, mental and physical well-being and national identity. Therefore, if I were to offer an antidote to the title of this piece, it would be the following: Inspect, Reflect, Reject!

By the way, I apologise if this article comes across as a bit of 'holier than thou' cod-philosophy. Of course, I wouldn't ask you to do anything that I wouldn't do myself. Hence, for the whole of this month, I'm embarking on yet another bout of 'extreme budgeting'.

As I explained in How I Lived On 10p A Day, this is an exercise in which I try to avoid spending any money for an entire month. In order to do this, I'm forced to go without all of my vices, such as alcohol, cigarettes, fast food, snacks and so on. Thus, I'm undergoing a complete financial and physical detox at present, which is testing my willpower to its limits!

Finally, if you would like to improve your self-image and status, don't buy designer gear or sleek, silver gadgets. Instead, do something altruistic, such as giving blood, which doesn't cost a penny but leaves you feeling better inside -- which is more than you can say for spending tomorrow's money today!

More: Turn the corner today: visit the Fool's Get Out of Debt centre and Dealing with Debt discussion board!