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Wednesday, February 9, 2011

Why Americans Can't Save

An interesting set of opinions on this topic in the New York Times. More interesting to me than the opinions of various experts was the following comment from an American who has lived in Europe.


Americans don't save, because there is so much great stuff to buy in the U.S. and because buying it is so easy! I'm American and have lived in western Europe for 3 years. When I go back to the U.S., I go on a shopping frenzy because:

-Shops are open past 6 pm and on Sundays
-Sales are not held just twice a year but nearly all year round
-Most goods are cheaper in the US due to the weak dollar or overseas production - that's why Europeans come to NYC to shop like crazy
-There are GREAT stores in the US - so good that we export them everywhere else
-Almost every store offers its own credit card or loyalty card, giving incentives to spend (and not just cash)
-Stores that offer multiple categories of goods under one roof (i.e. Target, Wal-Mart): when you don't have to visit 5 different shops to find gloves, a greeting card, duct tape, and groceries you tend to buy more
-Ubiquity of online shopping; it is not as common outside the US
-Ease of shopping: friendly sales people, sensible return policies, spacious stores, parking
-Easy credit for car leases and credit cards
-Overall consumer-friendly culture that emphasizes advertising and newness
-Large homes and cars that make it possible to transport and store purchases (compared to lugging them home on the subway to a tiny apartment)

A great example: when I lived in [small Western European country], I saved so much money simply because there was nothing particularly good or different to buy, and even then it was only convenient and POSSIBLE to "shop" on Saturdays when the stores were so packed that doing so was uncomfortable. Further, I had no car and so little space in my apartment that I had to think carefully about whether I had capacity for what I bought.


Do you think life in America is set up for over consumption?

11 comments:

FB @ FabulouslyBroke.com said...

In one word: yes

As a Canadian, I really understand the following:

1. Being in Montreal will make you realize that not everything is open at 9am and closed at 9pm on a schedule. Or even open on weekends.

2. Online shopping is not as easy or as ubiquitous. I mean, FREE SHIPPING. Americans are so lucky to have that because every time I think about shopping online, I check the shipping and it's always $50 or more.

3. Deals are outrageous. Even as a Canadian crossing the border, with the currency exchange, they do a 15% - 50% PREMIUM on the prices up here in Canada just because they can blame it on the dollar.

As Cassie from Digging up and Out experienced even spa treatments in Canada are "priced" on currency. Her case was extreme at 50% more just because we're in Canada.

I could go on..........

Unknown said...

I do think you that you are tempted constantly and that you are geared by businesses towards thinking that buying things, owning things, can make someone happy. Publicities are not so agressive abroad. Products are cheaper than in Europe and you do have very good quality with moderate prices. For example, a Kitchen Aid Artisan, which costs 250 dollars on amazon costs 450 EUROS in Spain. And there aren't really local equivalents (the closest are British Kenwood Chef processors which are VERY expensive too)
However, I do not think that Americans CANNOT save because of that. Americans can save, just like anyone else. It's matter of focusing life in something other than shopping!

hostess of the humble bungalow said...

The retail shops already know these reasons...so we need to exercise resolve and control.
Online shopping is open 24 hours a day so that can be a huge temptation!

No wonder we need help!

mette said...

Having never ever visited US, I only have the media and blog info about " shopping the American way ". From what I have gathered, people over there have a totally different approach to shopping. Shopping seems to be like a hobby, especially thrift shopping. Stuff is bought, not for acute need, but because it is cheap, and thrifting is trendy. People shop for the same reasons also from sales ( "what a bargain" ).
Now this trend has spread all over the world too, despite the fact, that things elsewhere are much more expensive.
I think that the change of the attitude towards shopping and spending is something, that takes a long time to change. Will it ever change?

Connecticut Blogger said...

Those were some interesting observations. Especially the mention of the simple fact that Europeans more heavily rely on public transportation like trains and live in much smaller homes. If they do own a car, it's usually just a single vehicle for a family and it's usually quite small. Definitely a different mindset than Americans.'

If you really want to trace it way, way back, I think it has to do with simple geography: the wide open spaces of the U.S. vs. Europe, which was developed and settled hundreds of years earlier than the U.S.

In the U.S., plenty of land encouraged suburbs far from urban centers to grow, and this necessitated the use of cars to get around where RR tracks hadn't been laid. Car-makers made cars bigger and bigger, and i think that's part of the mentality of "more is aLways better," which extends to other purchases as well.

In Europe, more densely populated urban centers evolved because there was less open space to develop;this enabled city planners to integrate railways and subways more efficiently. And we all know how much more reliable European railways are compared to those in the States. Europeans commit much more money to rail line maintenance and facilities, while here in America, public transportation is perennially begging for funding, while the bulk of transportation dollars go to keeping highways paved in asphalt.

Easy credit is undoubtedly contributing to the ability of consumers to achieve immediate gratification. Credit cards enable buyers to separate payment from the actual purchase. Europeans use debit cards much more frequently, which tend to inhibit overspending becus the purchase is immediately deducted from your checking account.

Duchesse said...

I appreciate your analysis, Connecticut Blogger, as the roots go back far further than simply access to long shopping hours, etc.

Americans are an acquisitive culture; as far back as 1899 Veblen presented his famous theory about consumption as the display of wealth: Work, buy, Display, Repeat.

When I return to the US I'm always surprised by how frequently people renovate, tearing out fully functional kitchens, bathrooms etc. There seems to be far less reverence for the old, well-kept home or car.

A late-capitalist, developed country must convince consumers (its own and others) to buy its goods, in order to keep running.

Shelley said...

The 24/7 shopping culture is gradually coming to Britain. The places that are open 24 hours however are not especially convenient for me to reach, even by car, not that I need to buy anything at 3am. Handy for people who work odd hours, though. It is still a trading law that stores shut at 4pm on Sunday until Monday morning, however. In the US it was always late on Sunday night that I needed to shop for something I forgot for work or school on Monday. No good for that here!

I do think goods are cheaper in the US, and not just because of the exchange rate. I used to stock up on dhoes, clothes, exercise kit, toiletries and OTC medicines whenever I visited home. I probably will again, but perhaps not to the same extent.

Though views about social class in Britain have and are still changing rapidly, there is still a vague sense that money - or things - doesn't give 'class' or add status. It does add a bit of dignity, however, to those who already have class. It is still preferable here to have 'good' things that show a bit (or even a lot) of wear than to have 'new' and cheap, so in some respect the consumerism of the masses doesn't work in quite the same way.

I've always understood that in the American culture wealth is a demonstration of God's love - God rewards those who work hard, etc., etc. That's one of the reasons it is so important to be successful, not just for its own sake. Here in England, God doesn't weigh up so well; it's rather an atheist culture here.

I don't believe Americans 'can't' save - I think many who could just don't want to. Also, I think that America is becoming more divided into the haves and have-nots, with the latter just keeping their heads above water. I think it's a harsh and harsher place to live. But that's just how I see it.

Funny about Money said...

"The serpent tempted me, and I did eat"? Hmmm....

While I lived in England (some years ago, admittedly), it did seem to me that prices were awfully high for goods that were comparatively lesser in quality. The VAT contributed to that, but I'm sure other forces were at work.

@ Duchesse: Historically, there certainly has been a vein of conspicuous consumption in U.S. culture. Seems to me, though, that it became more generalized following WW II, when goods that seemed luxurious to our parents and grandparents became more widely available. Things like vacuum cleaners and dishwashers were unheard-of when my mother was little, during the first couple of decades of the 20th century.

Widespread access to those things must have made people in her generation feel like manna was falling from heaven...all around them. It's not surprising that they'd try to acquire as much as they could.

Domestically, the U.S. was not as seriously harmed by WW I and WW II as were Europeans, where first an entire generation of young men was virtually snuffed out and then genocide and devastating new forms of warfare trashed the population, the infrastructure, and the economy.

Materially speaking, Americans were quite lucky after the second world war, and as individuals they took advantage of that luck. They may have lost something in the bargain.

Darla said...

Change the word can't to the word don't and I will agree with most of what is said. American can save (I'm one who does) but they just don't want to. Blame it on whatever - even in these economic times saving or not is still a choice for the vast majority of the population.

Darla

Duchesse said...

Funny: Your grandmother might not have wanted those goods when they were first introduced; the usual path of innovation, from early adoption, to majority, to late adoption to saturation is generally accompanied by the price dropping at each stage. You can see the pattern today with smart phones.

Frugal Scholar said...

@Everybody--I've been putting off comments to your wonderful contributions--because I've had a lot of grading. Now I still have grading and seem to have the flu. But thank you, thank you for the thoughtful comments.