Are You a Selective Spender

                                                            

Do you spend $400 on an iPhone but say you don’t make enough money to save.  Did you buy a Lexus truck but complain about paying a parking ticket? Do you complain about paying for health insurance but spend $800 on a pair of Louboutin shoes? Did you buy a new $30,000 car instead of saving for a down payment for a house? If this sounds like you, you are a selective spender.  You spend money on frivolous items that have no value with no problem and complain about spending money on important items such as insurance, rent, mortgage, gas for your car or contributing to a savings account.

I am a selective spender too but I shop smart. I don’t pay full price for items and I don’t spend a lot of money on cars, electronics or food.  I also comparison shop on prices for everything I buy.  However, I don’t mind spending money on important things like homeowners insurance, car insurance, life insurance, health insurance, groceries (to cook at home), contributions to my savings and  retirement account and car maintenance to name a few.  It baffles me how many Americans spend $25,000 - $30,000 on a new car but complain about spending money to purchase health insurance or co-pays at a doctor’s office.  

The average cost of an iPhone can range from $200 - $800 for the phone plus additional fees for a voice plan, data plan and text messaging.  My car  was recently totaled and it amazed me how so many people offered car choices that cost $25,000 or more as if they were speaking about buying a new shirt.  So and so just buy car X and got a good deal for $25,000. I’m thinking, $25,000 I will never pay $25,000 for a car that will depreciate as soon as I sign the contract. A car that only takes me from one point to another that does not have diamonds and rubies or include a driver to take me where I want to go. 

According to the National Automobile Dealers Association, the average price of a new car sold in the United States is $28,400.  An automobile is a passenger vehicle designed for operation on ordinary roads that has 4 wheels and a gasoline or diesel internal-combustion engine. Automobile originated from the French meaning self-movable.  

If you purchase an automobile for $25,000 you are paying for an item used to move yourself from one point to the next over a 3- 6 year period depending on the length of your car loan.  It costs approximately $1,255 to manufacture an average family car and up to $2,475 for a luxury car or sports car which includes the labor costs and worker benefits or 8% the cost of the car.  

Last year, Americans spent $10.7 trillion shopping.  Americans spend more on transportation, housing, and health care than Canada, United Kingdom and Japan but we spend less on food, clothes and alcohol.

According to the Bureau of Labor Statistics Americans spend more money eating but spend less on cooking at home than Canada, Britain, or Japan.  Last year Americans spent more than 15% of their income on food, almost 17% of their income on transportation and 41% on housing.  In 2011, Americans spent $96 billion on beer, $4.14 billion on St. Patrick’s Day, $11 billion on coffee, $5 billion on ringtones, $18 billion on credit card late fees and $500 million on Twinkies. If they used 1% of the $5 billion spent on ringtones or $500,000 they could all become homeowners or business owners.  Are you a selective spender?