Personal Finance; Should Americans Live More Like Europeans? 

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admin August 16, 2023
Updated 2023/08/16 at 2:26 PM
Personal Finance
We may subscribe to the mindset that Americans need to live more like Europeans, but the reality is far more complex. Yeah! A time of wealth has come upon us. We now consume significantly more than we did in the past, and more than in other nations.Everything is surplus. However, there is a widespread belief that Americans have an insatiable desire to acquire a lot of stuff, whether beneficial or not, whatever they want and whenever they want. That is the foundation of the U.S economy.

The American Economy and Household Consumption

About 67% of the U.S economy is made of household consumption, and we are meant to spend as this is our patriotic responsibility even while the economy is struggling. But it shouldn’t always be this way because the U.S economy may be more robust if it were less dependent on spending.This is gradually shifting towards another dimension as Americans can not be spending the way they used to anymore because tons of things are receding. It isn’t the way it used to be, and if all we have isn’t put in check and properly managed, we might have to do without them and live like the Europeans.

Comparing Europe to the US is not as clear-cut as we think. 

When comparing expenses between Europe and the U.S, it often reveals cheaper costs in favor of Europe because of lower healthcare as residents of the majority of European nations are provided with free healthcare, which is a significant saving. Even with a declining euro, and low inflation, Europe has a lower cost of living.Moving a bit more towards the cost of living, which varies depending on where a person lives in the United States and Europe, we can say that housing ranks higher for most households. And the location is likely the most critical consideration.Comparing the rental costs in San Francisco and New York City, you will find that they are much higher here. However, it is essential to consider these economic advantages carefully to elements like location, income levels, and economic conditions.Europeans typically pay a higher percentage of their income in taxes, and their average wages are lower than those in America.

A trip in history

Between 1990 and 2015, consumption per capita increased in the United States by about 65 percent, compared to a 35 percent increase in Europe. In Germany, household spending only accounts for roughly 50% of GDP.Despite a decrease in the typical household size, the average U.S. home increased in size from 1,700 square feet in 1980 to 2,000 square feet in 2015. Likewise, in the 1980s, just 13% of families had two or more refrigerators, but by 2015, that number had increased to 30%, including many lower-income households.Also, clothing purchases in today’s world have grown and are usually only worn seven times before being donated or discarded. Additionally, these show that there have been significant lifestyle changes among Americans.

Drastic changes in consumer spending are becoming apparent.

The global market’s weaknesses were exposed during the pandemic, and numerous Americans were affected by this. Our spending patterns slowed down a little, but despite all the scarcities, we have picked up the pace.As our nation has grown wealthier, so have we increased our spending. Many products have become more affordable and available for us due to technology, which boosts our production efficiency. With this, we have now cultivated a culture of compulsive buyers for various reasons.Well, it is essential to note that as a result of the Pandemic, a lot has changed, and the era of excess is coming to an end. Even before the pandemic, the U.S. government increased subsidies and taxes to incentivize businesses to create more goods at home.The number of goods produced in America may have increased as a result, but generally, trade has dropped, resulting in fewer product options at higher costs. As it stands now, the economic ties between the United States and China are deteriorating daily. If the situation worsens, the United States will be more likely to trade less and produce fewer inexpensive goods.Although it is difficult to predict the direction of trade, if we look inward, Americans won’t be able to maintain their current levels of consumption since they tend to spend more instead of saving up for more durable, higher-quality goods; they tend to overspend or purchase cheaper products.This results from having easy access to affordable goods and having mere material possessions fill the void in our lives. Meanwhile, the Europeans simply discover other environmentally friendly and helpful ways to mend the gap in their lives, like going biking. This does not necessarily mean that their souls are more content.Briefly, Americans may need to adapt to living like Europeans due to increasing pricing, a more environmentally conscious populace, and less trade, bringing fewer inexpensive products.We won’t do without, of course, but we will be able to cut back on our excesses, possibly be more selective in our purchases, and opt for fewer and higher-quality items.

Final thoughts – Americans should live more like Europeans

Last but not least, if we are sincere about safeguarding the environment, managing and budgeting our finances better as well as saving and investing in valuable ideas or products, proper planning of our taxes and becoming a global citizen will need more than just making purchases, it entails consuming less to reduce waste.This, in turn, will be a new way of life for the American economy as it seems as though the European economy is driven by our insatiable desire to acquire more, so if we are to go deeply into debt just to buy things we don’t need doesn’t lead to long-term, sustainable growth.Our economy improves best with the results of technology and innovation, which allows us to develop new goods and more effective methods of doing things because any consumption-driven economies are unsustainable.Overall, any economy that wants to be more sustainable and expand has to be built on making reasonable purchasing decisions and cutting down on unnecessary spending while being willing to embrace new ideas.

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