We're a Nation of Consumers And There's Nothing Wrong With That?

Is it just me or does that new Discover Card commercial bug you? You know the one: "We're a nation of consumers," the ad says, "and there's nothing wrong with that." There's just so much "cool stuff" out there, we poor rubes can't help ourselves. Then Discover makes it pitch, saying that it can help you use credit card debt responsibly. Fat chance! If you're retired or planning to retire, you should run as far away from credit cards as you can, no matter what they "offer." Here's the ad:

Now let's talk about the "consumer" part of the ad. Is their really "nothing wrong" with the level of consumption in the United States? According to CNN "the richest 20 percent of people consume 86 percent of everything that is sold for private consumption. The poorest 20 percent consume 1 percent of it. " According to the Sierra Club, the "United States, with less than five per cent of the world's people, consumes over twenty five percent of its resources." Does this seem unfair to you? It sounds like we Americans are going to be on the receiving end of a new French Revolution but on a global scale.

So what does this have to do with retirement? Plenty. There are two sides to the retirement ledger, income and expenses. Reducing expenses (i.e., consumption) is just as (or maybe more) important as increasing income. So, for a retiree, there is something wrong with consumption. It chews up your nest egg in a hurry. If you want to ensure that you won't run out of money in retirement, reducing your consumption is a great way to do it.

Reducing consumption has benefits beyond the obvious. For example, cutting down on food consumption could help the 63% of Americans who are overweight. And, while I don't want to sound too much like a tree-hugger, from the prospective of promoting a green planet, driving less, buying less stuff and turning off a few lights can go a long way, AND help you get to retirement sooner. Think about it.