Does the Level of Disposable Income Really Affect Us?

Does the Level of Disposable Income Really Affect Us?

by Rebecca Hall on 9 Jun, 2011

In the age of smartphones, tablets and other such luxury items, more and more people are becoming less and less anxious about keeping a close eye on their level of disposable income.

We may like to pretend to ourselves and convince others that we are careful with our money, but in this technology-obsessed world, the reality is that we just can’t help ourselves. Apple just keep bringing out shiny new toys, while Samsung, HTC and Blackberry follow suit. Elsewhere, Microsoft, Sony and Nintendo battle it out in the fiercely competitive world of console gaming.

But do we really need all of these items? After all, they are essentially luxuries we could live without. Some people even have their fingers in every pie out there, crowding their homes with devices like the Xbox 360, PlayStation 3 and Nintendo Wii (in most cases one of each, but I do know somebody who owns two Xbox 360s and, for that matter, three laptops).

Now it is obvious that the said person doesn’t need all of these items – convinced though he is that they are necessary possessions – so his obsession with technology raises two questions about our attitude towards money: is it simply the case that we are we too frivolous with it? Or are we just submissive victims of brilliant advertising campaigns?

Nobody enjoys being called reckless or gullible, but, I hate to be the one to break it to you, it could well be the case for some of us. Obviously, not everybody has an obsession with technology, but the industry wouldn’t be alive and kicking if it didn’t have a market.

There are people whose job it is to convince us to buy a slightly updated, faster and slimmer version of their product year upon year. Updated, faster, slimmer techno gadgets are highly desirable, it would seem, since some of them appear to be doing a pretty good job.

It would also seem that the line between desirability and affordability is fading fast – if it has not already completely disappeared for some. There are so many finance options available nowadays that it is hard to say no to only having to pay a tenner a month for a new 50” tele or surround sound system. They make it sound so cheap, don’t they?

That’s because they know what makes us tick – money. They create the illusion that you are being careful with your money. It is much easier to part with a tenner every four weeks than it is with £700 in four minutes.

You are still cutting the same sized slice out of your disposable income; it just gives you the chance to spend what you’ve ‘saved’ elsewhere that month.

It is easy to spend what you’ve worked hard to earn, everybody knows that, but, when you feel your next whim coming on, take a step back from the easel to redraw that desirability/affordability line with a view of the bigger picture.

Can you really afford it and do you really need it?


About the Author

Rebecca Hall

Rebecca Hall worked as an independent mortgage adviser for 10 years before turning to financial journalism full time. She has strong links to the CAB advising families on mortgage refinancing.