The DESIGN of SPENDING

It would be of vacant mind to ignore the Merchant’s Design: the ways businesses get people to spend money.  As buyers, we see the price, product offering, and the array of products available.  As a SELLERS, humans develop an entirely new set of reasoning processes.

In order to capture dollars, SELLERS are always looking to:

– reduce their costs
– ensure that you see their products
– increase the ‘buy’ trigger inside yourself by establishing better:

+ price
+ greater desire
+ need
+ convenience
+ requirement for replacement
+ by winning the competition for your purchase with other sellers

Pursuing great market edge has led to whole arrays of business activity, through which businesses pursue (with millions and billions of dollars) new ways to extoll a phenomenal amount of money (which translates to labor hours) from the world.

joe-vs.-volcano(Image from: Joe vs. the Volcano, screenshot link)

Businesses often bear enormous risks to make such moves, often fronting huge amounts of money that remain profitless for quite some time.  Because of this risk, getting you to buy is quite essential…

Over time, businesses that are successful bear the fruits of the effort, and they begin to shut out the competition, usually because they can either drive the prices down, create new products with less financial strain, afford larger advertising budgets, or by inserting more of their stores across the land, and so, increase convenience.  Also, creating a brighter, more powerful, and ever-present internet identity has become another important aspect of this.

While there are always openings for new businesses to be created, your need to buy is limited.

As buyers, we are constantly being coaxed into larger expenditures, and with this, increased spending slowly creeps into our lives – with time, the overall price of living seems to expand, and with the upward pressure, prices increase again.

Since the late 1990’s, the drastic increase in electricity and natural gas seemed to bring the onset of increased prices for everything.  Before that year, it cost under $30 a month for utilities on a small apartment with bad windows.  After that year, everything seemed to change.  Gasoline started to rise in price.  House builders started building bigger houses everywhere.  Instead of building $100,000 houses, everyone was buying $250,000 houses.  Banks were giving people more money than they should be given, and the debt interest would devour decades of life-work, and later create a national recession due to collapsing mortgages.  Credit card companies stood in lines on College Campuses, giving credit cards to anyone who would sign up.  The cost of tuition skyrocketed.  The cost of cars almost doubled since 1988.  The cost of milk continues rising.   The cost of cable t.v. has quadrupled, people went from cheap home phones to expensive cell phone data plans.  The cost of having the internet at home tripled.  Everything became radically more expensive, and wages did not rise in like manor.  All of this happened over 15 years.

During that time we’ve endured two major stock market crashes, the Internet Bubble, and the Bank Mortgage and Builder’s Recession.  And with astonishing speed, an unparalleled sequence of corporate buyouts has led to 5 BANKS owning 63% of the wealth of the entire American nation…

SPENDING HAPPENS BY DESIGN
Businesses arrange themselves to offer you something:

– when you need it
– when you want it
– when you didn’t know you needed it or wanted it

From the perspective of a person who is starting a business, that person must gaze over what other businesses are offering the world.  They have to find a place to fit in, and have enough time to have a shot at making sales, enough that they might just survive the costs of start-up.  If the businesses lands well, and they have little competition, then they expand the prices to the brink of when people stop buying again.

What has occured in the last 15 years is that big businesses realized they actually had a lot of control over buyers behavior.  Thier power was frequently far stronger than the balancing act caused by the ‘Free Market’ system: and the reason is simply because successful companies had more capital to defeat any newcomers, and devour they did.  Big companies to us as CONSUMERS which isn’t very appealing title. When that became stagnant businesses began a lame and tiring approach of getting people to identify with them so strongly that they call themselves “Your”, “My”, “I” as though they were in a symbiotic relationship to you… “We’re YOUR blah blah blah.”

Either way, Big businesses don’t get to choose exactly what you buy, and they design themselves to contend with this fact, and businesses expand themselves in ways that intentionally obliterate the walls which prevent your purchase.  It’s just how the game works, and it seems an unavoidable practice, since products and services are so inter-weaved with our lives.

Our modern life is either weaved
WITH big businesses,
or BY big businesses.

Citizens depend on these products and services.  However we must consider this statement: our true needs are not really being met at all.

Example #1 : America is large, so we need cars to get places.

why do car makers keep making car designs more intricate and ‘fashionable’
why haven’t they used technology to make a really, really cheap new car?

Example #2 : Every year there are new people needing to buy homes

I have seen ZERO small homes being built in 5 cities I’ve lived in over the last three decades
Instead of building appropriately, the answer became: banks should just lend people more money.  This is the cause of the 2009 recession, when the excessive debt began to collapse.

Example #3 : Prices of ‘utility’ type services NEVER go down, only up.

The cable providers are switching people to digital signals, which use 1/20th the bandwidth to send you television signals (far less resources), yet they actually raised the price in doing so – by as much as $20 a month!!!  Price is not really a cause-effect scenerio: it’s clearly a case of businesses asking themselves, “How much CAN we get?”

We all know this stuff is happening everywhere, all the time.  For many items, the leverage businesses have over our lives is huge.  As ‘consumers’ we rarely have a choice, bargaining power, or the ability to set even some of the terms.

The cost of starting a business is not cheap (I also run businesses!) – and what we’ve seen in America over the last 30 years is how small businesses turn into big businesses, and how big businesses hop-scotch across the country.  When you go to any city, you see the same 50-100 businesses in clumps.  For every 10 miles you drive, you see another batch of these businesses clumped together.  The country has become a sprawled network of really large “consumer” buying centers.

When buying becomes autonomous, and when a seller can create an autonomy of selection of their product, some portion of humanity usually starts to lose (either the buyers or the workers).

As you’ve probably noticed, the amount of advertising poured upon us is an attempt to gain product awareness, loyalty, and to trigger buying impulses on the spot.  Companies usually want to be known for something… they have the best, the fastest, the cheapest, the easiest, the coolest, the prettiest, the most delicious, the most necessary, the most time-saving.  That’s where they hook us, and that’s where the dollars go.

Even worse, a lot of the products we see on shelves are not THE BEST: rather the companies that produce those famous products have more leverage and threaten to abandon stores, if the store owners allow competing products to have shelf space.

The combination of effects causes American spenders to become sheered by their own need to make choices.  Think of how many dollars people earn: almost none of them are being saved.  Why is that?  Why does the impulse to buy overwhelm all sense of saving for the future?

The Merchant’s DESIGN:
The avenues for spending increase to fill the average worker’s wages.

  For 30% of people or more, there is little money to save
  For another 30% of people, their lifestyles expand to fill their larger paycheck, and they are usually end up with deep debts.
For another 20% of people, they don’t really worry about money.
For the last 10%, none of this is really an issue, because they’re filthy rich.

Businesses pay people the wages they live on.
They also sell the same people the products to live on.

It’s a double-press:
a two-sided pressure:
a vise that squeezes us a little more every day
:
It’s The VISE OF COMMERCE

Prices of products and services expand to meet business costs, and to increase profits.

Wages usually remain as low as possible, and the ‘inflation’ of money value makes your cash worth less, while wages are kept as low as possible for as long as possible.

If a grocery store pays people as little as possible, but charges as much as possible on goods, then the Vise of Commerce will always work to reduce the buying power of people.  Competition will always cause some need to balance costs and wages, but there is a decent sized gap there.

That gap involves you spending the money you really need to save for the future.  The fact that there is always some unemployment means that there is NEVER pressure for businesses to increase wages.

For people to save any money at all, there must be some forms of resistance.
A person has to innovate a gap in their spending.

SPENDING TRAPS

PROBLEM: An average lifestyle arrangement for one salary is usually compared to the lifestyle of someone else already had that same paycheck, but who spends all of it AND has huge debts.  The learned comparison is usually a really bad example!

INSIGHT: A lot of people who earn a certain amount should spend a lot less, and should refrain from the size of debts (or taking on any debt) that their peers are willing to choke themselves to death with.

PROBLEM: Changes in lifestyle are often determined by what businesses are offering, and what everyone else is buying.

INSIGHT: Businesses are trying to trigger WANTS, they try to sneak their product into your identity and lifestyle.  The more desire they create, the more you will incorporate their offering into your permanent expectation of what life entails.  If you can start to see through the gloss and hype, you can see that a lot of these upgrades are silly at best, and while a business spent an extra 1/10 to make that product, they are charging a ton more.

PROBLEM: Even small changes to a product, place, or service seems to yield personal-identity issues with some people.  A slight difference in appearances accounts for HUGE price differentiations in grocery stores, college campuses, houses, etcetera.  These small differences in appearance will get people to make insane buying choices that often includes spending tens of thousands directly, and hundreds of thousands in opportunity costs over a lifetime.

INSIGHT: Overwhelming the ‘childish want’ syndrome, the ‘childish comfort’ issue, and the ‘childish cool-factor’ (with accompanying embarrassment) drives people to spend ridiculous amounts of money, and sell themselves down the river, into decades of Forced Future Labor.  Overcoming this human flaw may be a challenge for some people, but it will be a far smaller challenge than toiling for a few extra decades of work.

Our intrinsic human issue with spending money & earning money is a situation we all must become aware of.  We need to understand OUR OWN BETTER INTEREST, and impose some kind of control over how businesses will influence our spending.

Extending onto our wants becomes a habit, and mentally upgrading at the time of purchase can be a chronic syndrome.  We can dig ourselves into holes buying things we don’t need, with money we don’t really have.  We can attempt to solve a problem, and accidentally create a future financial problem.  We can also suddenly want to reward ourselves, which may be deserved, but as an uncontrollable habit it could ravage our futures!!!

Our relationship with money and businesses has to create enough of a gap to establish a sane, healthy saving plan.  There IS no way around it.  Our resistance against flawed spending must increase: we must push against the rising tide of business that has expanded the cost of living far beyond the Living Wages upheld with current minimum wage (and other wages as well).

Being aware of how businesses design the routes of your spending is a good place to start.  Why do we hold a stigma about certain places and products?  Why do we spend more than we actually need to?  Push against that wall for a while, and see what starts to happen.  A monthly savings plan will emerge.

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