Breaking Free From the Spending Trap: A Guide to Financial Freedom with Dwight Heck
Are you caught in the whirlwind of consumerism, constantly chasing the next purchase without considering its impact on your financial well-being? In this eye-opening episode, I delve into the pervasive influence of consumerism on our society and personal finances, offering insights on how to break free from its grip and cultivate a more intentional approach to spending and saving.
We explore the hidden dangers of events like Black Friday and the commercialization of holidays, revealing how these marketing tactics can lead to financial strain and emotional distress. I share personal experiences and observations from my 22 years in the finance industry, highlighting the long-term consequences of impulsive spending and living beyond our means.
Key Takeaways:
- Understanding the difference between needs and wants in your purchasing decisions
- The importance of budgeting and financial planning to avoid debt traps
- How to resist the pressure of consumerism and find joy in experiences rather than possessions
- Strategies for celebrating holidays and special occasions without breaking the bank
Breaking the Cycle of Overconsumption
Learn how to identify and overcome the societal pressures that drive us to overspend. I offer practical advice on:
- Recognizing marketing tactics designed to trigger impulse purchases
- Developing a mindful approach to spending that aligns with your values and goals
- Alternatives to traditional gift-giving that focus on meaningful connections
Building a Solid Financial Foundation
Discover the power of financial literacy and how it can transform your relationship with money. We discuss:
- The critical importance of creating and sticking to a budget
- Strategies for paying yourself first and building an emergency fund
- How to tackle existing debt and avoid falling into future financial traps
This conversation is packed with actionable insights for anyone looking to take control of their finances and resist the allure of consumerism. Whether you’re struggling with debt or simply want to cultivate a more intentional approach to spending, you’ll find valuable guidance to help you on your journey towards financial freedom and personal fulfillment.
Don’t miss this opportunity to reframe your perspective on consumerism and take the first steps towards a more financially secure future. Tune in now and start giving a heck about your financial well-being!
Connect with Dwight Heck!
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Chapter Summary(Full Transcript of the show below)
00:00:02
The Impact of Consumerism on Society and Personal Finances
00:00:02
The Impact of Consumerism on Society and Personal Finances
The podcast discusses how consumerism affects society and personal finances. It explores the pressure to spend, especially during holidays and events like Black Friday. The host emphasizes the importance of budgeting, distinguishing between needs and wants, and avoiding debt to achieve financial stability and happiness.
00:10:15
The Dangers of Holiday Spending and Credit Card Debt
The episode delves into the pitfalls of excessive holiday spending, particularly during Christmas. It highlights how credit card debt can accumulate, leading to long-term financial struggles. The host advocates for meaningful experiences over material gifts and emphasizes the importance of living within one’s means.
00:20:30
Strategies for Rejecting Consumerism and Achieving Financial Well-being
The podcast concludes by offering practical advice on combating consumerism. Suggestions include living simply, buying secondhand, embracing minimalism, and practicing gratitude. The host encourages listeners to budget, set financial goals, and seek guidance for a purposeful financial life.
Full Transcript of Episode:
[00:00:02 – 00:30:13]
Good day and welcome to Give A Heck. On today’s episode, I decided to discuss consumerism. And you’re asking yourself, well, why would you want to discuss consumerism? What does that have to do with giving a heck? Well, really, honestly, it has everything to do with giving a heck. Because consumerism has taken over our society, not just in North America, but around the world. We have so many different events throughout the year that cause people to spend money they don’t have. We have a culture of people that don’t budget, that don’t think about tomorrow, they think about today. They live vicariously through other people. They list their goals and dreams that they want because again, being in the finance industry for 22 years, I’ve seen it, heard it and experienced it. At the end of the day, we come upon holidays, we come across across birthdays, anniversaries, weddings, whatever the case may be. And we have a culture where the corporations do everything in their power through advertising to ensure that we go and buy more goods and services. And they use it, they defend it, saying, well, you know, consumerism is a good thing because it drives the economy. Well, it also drives many other things because many people live from paycheck to paycheck on the hamster wheel, going to work, go home and get paid, and they really can’t afford what they are buying. It goes on their credit card because of the fact they don’t have enough money for the month. So they have more month than they do money. And all of a sudden they’re using lines of credits. Credit cards and other things get ahead or try to survive. Meanwhile, that debt consumes them in a short period for some, depending on the amount, and in a long period for others, it puts them in a grip. They, they come home one day, they look online or maybe they still get it in the mail, they look at a bill and they see how much is owing. I know in Canada, on our credit card statements, it states on there, if you make the minimum payment, this is how many years it’s going to take you to pay off your debt. And I’ve seen credit card statements where it says 60 years because they owe so much and they’re only making minimum payment. Guess what? As a side note, minimum payment is not designed to pay off credit. If you have a credit card, it’s designed to service it, to give the credit card companies the ability to give you something small enough that you’ll pay, but not too much to pay it down. Because normally credit card interest rates are astronomical. I know in Canada and in the US as well, you’ll start 23, 21%. You miss one payment, many of them have it within their contract, it’ll go up to 30% or higher. Did you know that if you’re a consumer as well, you have to understand that every time you go to buy something, right? You have to understand, do you know what a need and a want is? That’s another thing that happens with consumerism. People get so caught up in the environment of purchasing for an event or a specific circumstance. We’ll use the example of Black Friday coming up, right? Black Friday is coming up in a few days and people will rush to buy stuff because it’s at a steep discount. Well, many corporations put only so many of those products. You know, I know in Canada, they have to have a certain amount before they can advertise it in flyers or online or any form of advertising. So let’s say they have 10 of a TV that’s normally $1200 and they have it on for $800, right? Guess what that’s called in the advertising world? That’s called a loss leader. They know that they’re not going to make a lot or make anything. Maybe they’re selling it at a loss because they know that, that 10 from the people waiting in line at the door to get in when the store opens on Black Friday are going to be gone quick. And people have buyer’s remorse after the fact. And here’s how I’ll explain that. The people that wanted that TV for $800 go into the store, they look and the TV’s gone. There was 10 of them, but right beside it, it’s another TV that is, you know, very nice. Not really what they were looking for. A little bit more expensive and only a hundred dollars off. Or maybe those ones are gone and then the next one up is regular price. But people are in there thinking, I gotta leave with something. I waited in line. Or I came here to buy something and they don’t even get the tv. They look for other things and they spend money they can’t afford using their credit card, maybe just coming out of their bank account and going into their overdraft. Maybe they have a line of credit. Whatever the case may be, they buy that stuff. They have the warm and fuzzy initially until again they get that credit card bill, right? Black Friday, is it good for the economy? Maybe consumerism at that point can be good for the economy, but it’s not good for the economy long term because you have a spike in people purchasing. But then all Of a sudden, those people that you need to buy after the fact don’t have the economic ability to do it because they literally are at their credit limit ceiling. They can’t go out and buy anything more. And now they’re depressed. Now they’re, it causes anxiety on the anxiety scale. Can they make their next month payment? Because they’re not sure. They don’t do something called budgeting. And they’re depressed maybe because they knew they shouldn’t have bought whatever they bought. Maybe it’s a big ticket purchase, maybe it’s a vehicle that initially they could afford the payment, but something come up. Now they have a new expense and weren’t budgeting, they weren’t putting down in black and white and they go and buy that vehicle or they go buy that big ticket item. And initially they looked at their numbers, which they don’t have. So they really aren’t looking at numbers. They’re thinking, well, I got this much in my bank account, I can make that payment. Yet they have nothing written down in black and white to say, hey, can I make that payment that’s due every single month, can I make it? Because this week I have this payment coming up for mortgage, then I have a payment for utilities, I have payment for whatever the case may be. I have a vehicle payment in there. I have a payment on a renovation or whatever you own and you have payments on. And they live from paycheck to paycheck not knowing if they can make their payments every month. Slipping into overdraft again, using lines of credit, maybe taking a cash advance on a credit card. Oh my gosh, the interest rates on that are crazy. So consumerism drives people for things like Black Friday. They go out and buy short term good for the economy, long term bad because it drives many people into payment structure, high interest rates and they, and they, they’re just a one shot to the economy. They can’t afford to consume again. And guess what comes right after Black Friday. One of the worst times of the year for consumerism, which has lost its luster to me many years ago. I understand the message of Christmas. I’m a Christian, I believe in Christmas, but I don’t believe in the commercialism of it. I got caught up in it for many, many years in my own family structure where people were buying presents for everybody and anybody and spending money I couldn’t afford and then spending the next X amount of months, maybe a year to pay it off as I was raising my kids. And eventually that had to come to a head. Why? Well, I was seeing it with my own clients. I was seeing the patterns and realizing that I had slipped into it for quite a few years and I had to put an end to it at the end of the day, really, what’s the message of Christmas? It should be Christ. If you’re a person that’s Christian. If you’re not, maybe it’s just a holiday for you, but it should all be about spending time with your family, your loved ones, and communicating and getting, you know, getting down to that family value system where we’ve stopped spending time with one another. And as a side note, if you’re getting together with your family, actually visit and spend time with them. Stay off your smart device, please stay off your tablets. Actually spend time communicating, play board games. I know my family loves to do that. At Christmas, we play board games and we sit and we have. Some people have coffee, water, some people have a cocktail, whatever the case may be. But we hang out because we don’t see each other a lot. It’s not about the commercialism of opening presents and, oh, look at this, or look at that. And really, are you that person at Christmas that says, here’s a limit, I’m going to spend a hundred dollars on this person, and that person has the same limit for you. So really, what are you doing? You’re just exchanging money. You’re spending a hundred dollars on them, they’re spending $100 on you. And a lot of times, you know, neither of you can afford it, so you both have a product or service, maybe a gift card, which is quite common nowadays. There’s nothing wrong with that. But at the end of the day, wouldn’t it be just better to say to each other, you know what? Instead of us exchanging $100 back and forth, whether it’s a product, a service, or a gift card or cash, why don’t we just not do that and hang out? Why don’t we get together at your house or my house, or let’s go out and actually get something to eat. Not that you have to spend money that way, but sometimes you. Maybe you can afford 100 bucks, but you just realize you’d rather have more value to spend time with that person. And it involves going out for a nice meal, maybe just go out for a pizza. But the best option for all of that would be, hey, come on over, I’ll cook you something. Let’s hang out for the evening. Let’s visit, let’s. Let’s catch up, right? But so many people are caught up in that commercialism of, you know, what am I going to buy this person? Oh, I bought this person one present and this person, I got two. I got to even it out. You don’t even look at the dollar value you’re spending. When do you look at the dollar value that you’re spending at Christmas? Ask yourself that question. What happens in January, February, when you get your statements coming in and you look at them and you realize how much money was spent at Christmas for a 30 second smile? What do you mean, 30 second smile? You’re thinking to yourself, well, people open it at something they like, or even if something don’t like, they’ll smile and say thank you and it’s over. You’ve spent that money for maybe 30 seconds of joy. It doesn’t mean that what you bought them won’t give them long term joy. But at the end of the day, they’re opening that, whatever it is, looking at it. You get joy out of it for a few seconds. And then months and months of debt, anxiety, depression again, depression. Because you’re thinking, wow, why did I do that to myself? I do this every year. I see it on budgets all the time. From you look at January to December on a budget and I’m going through the budget, Christmas is always the highest. People allocate huge dollars. And on black and white in the budget they can see, they bring in, I’ll use an example, they’re bringing in $4,000. And on a typical month, we’ll use a typical consumer. They’re breaking even, they’re saving it all. Or pardon me, they’re spending it all. So they spend all that four grand and all of a sudden Christmas shows up and they spend. And you’d be shocked, families will spend 1500 even more on Christmas. And that’s on the negative part goes into January, they know they can’t afford to pay it. So guess what happens? They start making payments. They can’t even make a decent payment to pay it off soon. And they make the minimum payment and they’re going to spend decades paying it off. Possibly. Maybe they’re, you know, they’re a person that has the ability to, you know, make more money. Seasonal job, they can make more cash at specific times and they know they can pay it off. But even if you know you can pay it off in a year, why put yourself into that circumstance? You’re making their credit card companies interest. You’re making them wealthy. You’re not getting your life ahead. You spent all this money for toys or for personal items for your Significant other yourself that you might use once or twice or maybe you don’t even really need it. You get to a certain age, like I struggle when people in my family want to buy me something for birthday days, for Father’s Day, for Christmas, because I really, I don’t need a lot. Very simple guy. So I’ll give them things that I need. Really? Do I need it again? No, not really. But they’re, they’re wanting me to tell them stuff. So then I buy that. I tell them to this. This is great. Here’s a couple options. They get it for me and I’ve gotten stuff that I really didn’t need. I got an item last year for Christmas that’s still sitting in the box that I really didn’t need. But I was getting, you know, told, hey, you need to buy this or pardon me, you need to give us an idea. We want to buy this for you. Okay, So I give them an idea, which I really didn’t need because I was struggling to figure it out. And like I said, it’s still sitting in the box 11 months later, right? Just about 12 months. But at the end of the day, consumerism is really a disease. I actually printed out something here. I’m going to read you what this definition that AI come up with for what consumerism is. Consumerism is a social and economic theory that encourages people to buy more goods and services than they need for survival or status. It’s driven by advertising, mass media and the market economy. And it can be. And it can lead to a culture of over consumption. Exactly what I’ve been talking about, over consumption. People get stuff constantly that they don’t need and literally put themselves in a terrible situation. They aren’t saving for their future. They have no emergency fund. They have nothing. They have no ability, if something breaks down, to be able to pay for it. I’ve done workshops on that for year years. Part of me where people really, it wakes them up to understanding what they’re doing and how they’re spending their money. And again, I know people get tired of it all goes back to budgeting, understanding your black and white numbers, paying yourself first. What does that mean for those that are new to the show or even those loyal listeners that don’t remember? Well, guess what? Saving first means. If you make $4,000 a year, you should be. Or a year, pardon me, $4,000 a year, you’re not going to get very far. I mean, $4,000 a month, you’re going to end up saving, let’s say 5, 10% of that. And then you’re going to budget around the difference that’s left over. You’re going to save for your future for a rainy day, whatever the case may be. And you will literally then live off the difference, right? You will figure out what your current debt structure is. You can figure out, how can I pay off that debt, what can I do in different debt roll up circumstances where I can get rid of that debt with, you know, with focused payments, still afford boots, still afford that. When you understand your numbers, you will understand what a need and a want is, right? And you will not purchase things. I’ve been practicing that this whole year. 2024 hasn’t been the year that I expected to be. So it’s, I’ve had to tighten my belt and reimagine my life and how I’m going to live it, right, and reinforce what I teach others, taught my kids since they were little, what’s a need or a want? So I’ll see something and I’ll think to myself, well, that’s really cool, that’s neat. Do I need it or is that a want? And then I walk away from it. And guess what? My life still goes on. I still am. I still have the same joys, the same tribulations and trials. I have the same griefs. I have the same happiness whether or not I bought it. Now, if it’s a need, my vehicle broke down, I got to repair it. I’m going to get it done. I got to get it done because I need to be able to get places. But if it’s not a need and it’s just a want, I’m not doing it. So you learn to structure your purchasing and what you’re going to do in your life by actually training your brain, talking about it with others and speaking it out loud. Ask yourself, do I really need that? You’re looking at something. You’re in a store, you’re online, on Amazon, you see something on tv, you drive by a billboard, you ask yourself, oh, that’s cool. And you think, I’m going to buy that. No, your brain’s going to go, is that a need or a want? Do you have all your bills covered? Are you saving for your future? Maybe you can’t save your future and you got to use that money to get out of extraordinary amount of debt that you’re paying high interest rates on that’s crushing you and making the corporations and the credit card companies profit. You’re not getting ahead, they’re not thinking about you. Advertising and everything you do is. They do. Part of me is specific to make you spend more money whether you have it or not. Are you a sports fan? What sport do you watch? Do you actually see all the advertising that’s all over certain sports jerseys, all over the walls? In hockey, it’s. There’s. They’re finally starting to put it or negatively putting it on jerseys, on helmets. But it’s always been on the boards at a hockey game. A couple years back they started doing digital ads. What is that? Well, when you’re watching in a game on tv, those ads projected on the boards are constantly changing. Watch. They can’t get out and skate in the ice and peel them off and put on new ones like they’ve been doing for years, literally decades. They do it electronically, it’s overlaid and it changes constantly. Consumerism. They want you to buy, they want you to do this, they want you to do that. And this show is sponsored by, or this game is sponsored by, or this blah blah, blah is sponsored by. And I get it. Without sponsors, without advertising, people wouldn’t make money. But guess what? It’s the corporations making that money indirectly. You could be making some money off of it because maybe it’s a corporation that you’ve invested in through a mutual fund or a stock and you make some rate of return. But guess what? If it’s on the negative side and you’re purchasing stuff and you’re in debt at a high interest rate and you can’t make your payments consistently, you’re not saving for your future, you’re not saving or part of me paying down the current debt you have, you are in trouble. I hate to be the bearer of bad news, but you need to get control of your life. You need to understand needs and wants. You need to budget and put down within that budget exactly every single birthday, anniversary, I don’t care what month it is. And at the top it has your positives of income, your net income. At the bottom is all the, all the expenses. Then it shows you what you have left. Sadly, many consumers, when I sit down with them, it’s a negative or it’s very small, or it’s somebody that makes a lot of money. Sat down with clients here recently that both make a lot of cash, didn’t realize where their money was going. We budgeted and they weren’t getting ahead. Yes, they had lots of fancy bling and this and that, but they weren’t focused on their goals that they said they had of wanting to be able to retire right in their 40s, struggling, can’t really, I’m not saying struggling financially, struggling to understand what exactly they want goal set with them, budgeted with them, was a giant wake up call for them that they needed to do more if they actually want to retire someday. Because otherwise they were just living a life of oh, let’s spend this, let’s spend that, we make good money. But they weren’t doing anything positive for their future. They were doing things for short term, right? Rental property, doing this, doing that, looking at different stuff to increase their income, coming in for their future. But they had nothing focused, right? So you can have too much money and still have a problem in life, right? You can have a person that has a lot of money that’s just at a higher level of broke too. So somebody may be that person making 4000 is hitting zero every month and they don’t have anything extra. And then I have people that are making 10, 15,000amonth that are just at a higher level of broke. They’re not getting ahead either because all their payments, everything they do equals what they bring in for income. And they’re not saving or they’re not saving enough. They have no real goals in place. And the corporations are hoping that you are somebody that’s going to get excited that they have a flashy enough ad or a slogan or a song or a fancy box or a color or whatever the case may be a slogan and that you, they hope that you’re going to buy, that you’re going to over consume. So there’s so many different things that cause all this problem. Obviously it’s influenced, influenced as we discussed a little bit about the mass media, right Is in, it’s influenced by it. All the sporting games, billboards, all that stuff I was talking about radio, television, flyers that come into your mailbox. And it basically shapes people’s desires to want these products when they really don’t need them. Again, want these products, not need these products. So consumerism, just so you understand, became widespread in the early 1900s during the second industrial revolution. I was researching it and I figured I’d let you know that information. And to end this off, there’s many different things we can talk about in regards to consumerism. Black Friday, Christmas. People now buy gifts at Easter. They buy gifts. Well, they’ve always done it at Valentine Day and at the end of the day just hang out with people. You don’t need to spend an extraordinary amount of money. You want to spend a little bit of money, buy them a coffee card from Starbucks, Tim Hortons, something like that. Enough for them to buy a cup of coffee if they want the fancy ones. Maybe spend five bucks, ten bucks just to show that you care about them, but it’s not going to break your bank and hurt your life. Don’t go spend thousands of dollars on presents this coming up, Black Friday. Don’t spend thousands of dollars at Christmas getting yourself into a pickle for the next year or 10 years. I have clients that are paying off holidays the same way. They go on that dream vacation and they charge it all. And it’s just horrible what it does to their bottom line. Right. I sit down and budget with some of these clients that are new or even older ones that haven’t really told me stuff. And we’ll break down where this debt come from. Oh, this is a holiday we went on two, four, six years ago. And I’m going, oh, my gosh, did they have fun on the holiday? Oh, I had blast. How does that debt make you feel? Oh, it feels horrible. We’re still paying it off. And some of them will say, we don’t know we’re going to be able to go on a holiday next. Had they been able to budget, had they been able to figure things out, maybe things could have been different. I’ve helped clients that had extreme debt. Took them a few years to get their lives under control with extreme budgeting. Living life on purpose, not by accident, like I teach. And at the end of the day, they just keep on pressing forward. And then all of a sudden, guess what? They were able to take a vacation and not do it where they were going to be financially burdened for years and years and years, right? Is that something you’d like? Maybe you’ve never been on a vacation and that’s new to you and you’re thinking to yourself, well, that doesn’t apply to me. Well, guess what? Every circumstance, like a fingerprint, which is different, can have a solution, timeline. That’s up to you. What are you willing to do? Are you willing to reach out to me? Are you willing to have a call with me or with somebody that can help you get your life in control? So you’re saving for your future, for your goals. Do you even understand your goals? You ever thought about them? You ever put them down in black and white? But at the end of the day, really, some ways to reject consumerism to wrap this up would include living more simply. Hey, we talked about that. You don’t need all the fancy stuff buying secondhand. Oh, my gosh, when my kids Were growing up, we’d go to secondhand stores. I only had X amount of money, right? Not a big deal. One kid would, I’d say them, okay, you get a hundred dollars for clothes. You get a hundred dollars for clothes. And I know people are probably laughing, that’s not a lot of money. I’m just using that as an example. One kid would say, I want new items. I want that branded Nike or Adidas or whatever, you know, product that they want to buy of clothing. And the other kid would say, well, I’ll go to the second hand store, secondhand store. They get like five items. The other kid gets one, maybe two items. Who’s farther ahead? Isn’t that better for the environment too? Reusing clothes, reusing products, secondhand purchasing of vehicles, electronics, clothing, etc. There’s nothing wrong with that. Sometimes we overspend because commercialism tells us we need the best. We need the brand name. Bottom line. I’m here to tell you you can live a purposeful, happy life based on your goals, your needs, applying it to a budget and living it right, just day by day, living it. And that’s the best way that you’re going to enjoy life. Embracing minimalism is something that is good too. You don’t have to own more to be happy, right? You can just be happy with what you have. Look around and think to yourself, are you grateful? Do you have gratitude for what you currently have? Do you ask yourself that and practice the need versus want. Is this a need or is this a want? If you haven’t started budgeting, there’s so many good budgeting applications and templates online. Start budgeting again. You can reach out to me@giveaheck.com and you can schedule a call with me and we can just talk, right? No cost, no obligation for that call and see if there’s maybe a future for me to be able to help you. It doesn’t matter where you are in the world, I can help you with goal setting and budgeting. Not necessarily products and services such as insurance or investing, right? Unless you’re in my country, depending on where you live, then I can help you with the full meal deal. But those living anywhere in the world, I can help you out with all the rest and get you started on the track to have a life that is on purpose and not by accident, to have a roadmap for your financial future starting today. And I always ask on my podcast, if I was going to give somebody one last closing message, what would they say? Well, what would I say? I would tell you to be a person that is kind to yourself, always kind to others, but kind to yourself. If you’re in any of these circumstances where you’re in too much debt and you’re struggling, it’s never too late to get control of your life, to move forward in a happy, healthy way. When you have guidance and you have focus, it won’t be such a struggle for you. You won’t have as much anxiety or depression or nights of quiet desperation where you go to bed in quiet desperation, fearful, get up in the same way and live a life on a hamster wheel with some guidance and focus. Even if you’ve got that, even if you’re not in the best place, when you have guidance and focus for your life, you will sleep better, you will feel better, because you know there’s a light at the end of the tunnel again. For those that want to reach out to me, GiveAheck.com is the easiest way to reach out. I’m Dwight Heck and I thank you for listening. I thank you for supporting the GiveAheck podcast, and we are now in our fourth. We’ve completed four years of this podcast and I appreciate each and every one of you. Take care, God bless and have a fantastic winter season.