ran a little piece about a woman looking for a boyfriend. The journalist asked her how she was going to go about it. Her answer? She’s going to splash out on a Caribbean holiday so she has an all-over tan, have her hair done at Nicky Clarke, buy all her cosmetics at Carita, her lingerie from upmarket underwear shop Myla and her clothes (£500 worth a month despite the fact that she takes home pay of only around £1,300 a month) from upmarket designer Paul and Joe. This makes no sense. Most men have never heard of Paul and Joe and while the label makes lovely clothes they aren’t going to make her look much nicer than Topshop stuff. Nor will knickers from Myla. Oh, and the sun shines in places other than the Caribbean. This woman might end up with a boyfriend (although he’d have to be a very tolerant one) but it won’t be because of her Carita face cream. And she’d better hope he’s a generous boyfriend because she’s always going to be broke.
The fact is that normal rules do apply. They always apply Spending money should not be thought of as an emotional experience. Falling in love is an emotional experience; having a baby is an emotional experience; attending your best friend’s wedding is an emotional experience; buying a handbag simply is not.
“I like my money right where I can see it – hanging in my closet.”
Carrie Bradshaw, Sex and the City
If you aren’t happy with your weight, with your job or with your relationship, no number of dresses will cheer you up for long; a £1,000 weekend at a spa will do you no more good than a lie-in and a walk in the park, and if you’re getting old a £100 pot of wrinkle cream will no more make you young again than a jar of cold cream. Instead it will just make you feel slightly disappointed, pushing you back to the shops to search for something new to cheer yourself up. Women often say that they feel moments of ‘joy’ as they make new purchases. Why? Because for that moment they genuinely believe that what they have bought will make their lives better. But they quickly see that it has not and the joy goes – it is a very fleeting feeling, to say nothing of an expensive one. The moment you have something you start getting used to having it and the joy you find in it starts declining. New shoes make you happy for a few days but after several wearings they’re not all that new any more. To be happy you find that you need another pair. It is the same for handbags and jeans.
It’s also worth pointing out that it’s not just expensive stuff we’ve been conned into buying too much of. When advertisers aren’t using the ‘improve your life’ line to sell us stuff, they’re using the ‘it’s so cheap you’d be mad not to’ line instead. Over the last decade the big business success story has been the rise and rise of the discount store – the likes of Matalan and Primark for clothes and Lidl and Aldi for food. I’ve nothing against discount stores – low prices are obviously a good thing – but when prices are cheap we tend to buy more than we would have otherwise and end up spending more money in total. We think we are saving when we buy jeans at £4 and if we needed jeans anyway we probably are. But if we didn’t intend to buy jeans and only did so because they were so cheap and then bought three pairs for ourselves and one pair each for our sisters as well, we are not saving, we are spending: £4 spent is £4 not saved.
We now buy twice as many clothes as we did a decade ago for the simple reason that they are cheap. In 2004 clothing sales in the UK were worth a total of £36.6 billion, 19% more than in 2000. Around £9.5 billion went on men’s clothes and £6.6 billion on children’s clothes. The rest – a massive £20.5 billion – was spent on women’s clothes. We also travel at least twice as much as we used to. Back when it cost £400 to go to Paris people didn’t go very often. Now it costs £29.99 to fly there on a discount airline we go at the drop of a hat. Then when we get there we stay in a hotel, go out for dinner and buy souvenirs. The same is true of electronic goods. We don’t buy just one television or DVD player. No, at £29.99 each we don’t see why we shouldn’t have one in every room and a digital radio or two thrown in for good measure. It all adds up to a lot of money being spent that would never have been spent a decade ago. How much have you bought in the last six months that you don’t need? Find a credit card statement from a few months ago and have a look at it. How many of the things you paid for with your card can you remember ever having or do you still have? Were they really worth buying or would you now rather have the cash in hand?
Shoes and handbags
My friend Nick once asked me why on earth it is that women spend so much money on handbags and shoes. A man, he said, only needs three pairs of shoes – one for wearing with work clothes, one for wearing with casual clothes and one for playing sport. Yet every woman he had ever known appeared to need upwards of 20 pairs. Indeed a survey from Harper’s Bazaar in 2006 interviewed 1,000 women and found that half of them owned over 30 pairs of shoes and one in ten owned 100 pairs. One in ten also admitted to spending £1,000-plus a year on shoes. The right shoes, said the editor of the magazine, ‘can turn you from the girl next door into a sex goddess in seconds’. Nick found handbags even more bemusing. Men, he said, don’t need them at all; they just carry money and door keys in their pockets. So why do women need to have so many bags? Indeed why do they need them at all?
A few days later he came back to me. He’d figured it out, he said. They are the only two things that look the same on everyone regardless of their weight or body shape: the average woman may not be able to fit into the same jeans as Kate Moss and would feel miserable even having a go in the changing room but a pair of Prada shoes looks much the same on everyone. He’s right of course. The runaway sales of shoes and handbags are nothing but a function of our insecurities about our figures. How sad is that?
“I’m always buying new shoes and I might spend as much as $1,500 on a really great pair, but I don’t splurge on clothes.”
Shania Twain
And it isn’t just clothes, cosmetics, CDs, TVs and face cream you’ve been conned into buying when you don’t need to. It’s new cars, insurance, overpriced credit card debt, and expensive mortgages, phone tariffs and utilities. Financial services firms are just like fashion firms in many ways: they know that many of us have all we need when it comes to money (a mortgage, a current account, a savings account or two and a pension) so to keep their profits growing they have to continue to invent new products and persuade us we need them. So once again we find ourselves paying too much for useless tat (insurances against things that really won’t ever happen, for example) only this time it’s usually useless tat we don’t even understand. This doesn’t make any sense: you work hard for every penny you earn so why let it slip through your fingers so easily? Distinguishing between the products you really need for yourself and those that the corporate world wants you to think you need (so it can make ever higher profits for itself) is absolutely vital.
So next time you think you might need a new pair of shoes, another credit card, some clever kind of insurance, or any other financial product stop and think. Do you really need it? Or does someone else need you to think you need it? Nine times out of ten you will find it is the latter.
I have a simple self-help method I use when I have to bring reality into my spending. When I see something I want in a shop I look at the price and see how many work hours it will take me to pay for it. Then I decide if it is really worth buying. Take a £200 handbag. If you earn £30,000 a year and work 8 hours a day, you are clearing around £10 an hour after tax. So that handbag is going to cost you 20 hours, or two and a half days of solid work. Do you want it that much? Sometimes the item in question might be so perfect that you do want it that much. Spending – even if unnecessary – is not all
