Personal Psychological Problems

Some critics of the indirect "hidden harms" of advertising have focused on the psychological problems of the individual and the family: debt cycle, child labor, crime, family stress, disposable income, and the issues of OPM ("Other Peoples' Money") as related to dependent children, and poor self-image.

Professional persuaders (aided by rented shrinks) manipulate our hopes and fears, intensifying mental problems: conflicts and frustrations, discontent and dissatisfactions, depression and self-hatred, envy and resentment of others. Such harms are not easy to measure, but they are still real, chronic, and widespread.

"Among the problem financial behaviors identified by psychologists in recent years are: overspending, underspending (a k a Depression mentality), serial borrowing, financial infidelity (“cheating” on a spouse by spending and lying about it), workaholism, financial incest (lording money over relatives to control them), financial enabling (throwing large sums at, say, adult children who then are not motivated to support themselves), hoarding, and plenty of guilt and shame around poverty and wealth."
-- 'How to Treat a ‘Money Disorder’ | By Sarah Kershaw

In one sense, these are problems hurting the individual; in another sense, they relate to other social problems affecting the whole society. Any single ad or product might be justified by the seller, but the cumulative impact of millions of such ads affects us all.

Although our desires may be unlimited, our money, our time, and our abilities are not. Before the 1950s, most people couldn't overspend or exceed their limits because loans and credit were so hard to get. Banks emphasized saving. "A penny saved is a penny earned."

Since then, not only has advertising changed, increasingly stimulating the desires of people, but also banks have changed. Banks now emphasize spending -- spending borrowed money.

Banks and the credit card companies (owned by the banks) have thus blurred the real limits which people have -- by offering "easy credit" and time-payments.

Many people have gotten into the habit of using a credit card and paying only the "minimum due" monthly payments, and paying the huge "hidden tax" in interest (often 20% or more).

Most bankruptcies involve people living far beyond their means, by using credit cards until they no longer can pay even the monthly interest payments. (And corporate lenders quietly pass on the cost of these bankruptcies by charging their reliable "good customers" increased rates.)

In 2003, there were 1.6 million personal bankruptcies, an increase of 10% over the previous year, due primarily, according to analysts, to the delayed results of the spending spree of the late 1990s and the subsequent economic recession.

Many people will never get out of their debt cycle, often making a joke of it, that they're "maxing out" on their credit cards. Or, they even try to "solve the problem" by playing the state lottery. However, it's really no joke because such debt has been the source of untold family crises and conflicts. By stimulating so many desires and urging instant gratification, constant advertising -- and easy credit by the banks-- has had the cumulative effect of luring many people into an endless debt cycle. But, banks and advertisers simply aren't interested in the personal and family problems caused by overspending.

It's estimated that over 10 million Americans are compulsive buyers, seriously affecting themselves and their families well-being.

from --" Paradox of Prosperity" Los Angles Times | December 30, 2004 | By Peter G. Gosselin

“... an American paradox: why so many people report being less financially secure even as the nation, by many measures, has grown far more prosperous. The answer lies in the shifting of economic risks from the broad shoulders of business and government to the backs of working families.

Over the last quarter of a century, many safeguards that people once counted on to shield them from financial harm have been weakened or completely lost. These include formal protections such as guaranteed corporate pensions and state and federal unemployment benefits. And they include informal ones, like the loyalty that employers once showed their workers by offering secure jobs with relatively little prospect of long-term layoff. Other cushions that families like the Ryans have relied on, such as the financial stability that comes with a college education, also have eroded.

The result is that families, even well-off ones, operate with little margin for economic error. And they can pay a steep price if anything goes wrong [such as] any of seven common but potentially destabilizing events. They were: divorce or separation, a decline in a spouse's work hours, death of a spouse, birth of a child, retirement or disability of the main breadwinner, unemployment and serious illness....

In the last two decades, personal bankruptcies have skyrocketed. Last year, a record 1.6 million cases were filed.... many filers were middle-aged, well-educated and — until their assets fell short of their liabilities — of considerable means.

Some financial industry executives and Bush administration officials suggest that the rise in bankruptcies reflects profligacy among Americans. They are particularly incensed about Chapter 7 bankruptcies, which let people effectively wipe out their debts after forfeiting most of their assets but not their future earnings. These critics of the law want to change it by making it harder to go bankrupt.

A Chapter 7 filer is a predatory borrower, Assistant Treasury Secretary Wayne A. Abernathy suggested in a speech last year, someone who "in a calculated way borrows as much as he can, with little thought of paying it back, or in some cases, with no intention of paying it back."

But Warren, the Harvard law professor whose Consumer Bankruptcy Project has conducted extensive surveys of bankrupt families, believes that fundamental economic change — rather than moral laxness — is behind the increase in filings.

"People's jobs have grown more unstable," she said. In many communities, "the basics of middle-class life — a good house in a good neighborhood with good schools — have gotten so much more expensive. That's what is knocking families off their financial blocks."

... The costs of coping with sickness and disease can be devastating. Harvard's Warren and some of her colleagues estimated that in 2002, 424,500 families, or nearly one-third of those filing for bankruptcy, did so in part because of crushing medical expenses. That was a 20-fold increase from two decades ago....

There was an era in America when a family could live comfortably on the income of just one worker. Not anymore. Today, three-quarters of college-educated families are two-earner households. Only one-quarter try to make it on the wages of a single earner.

Meanwhile, the influx of wives to the workforce has been especially important for middle-class families without college educations. Government figures show that fully 80% of their inflation-adjusted income growth over the last 25 years has been the result of the rising earnings of women. During the same span, men's wages have stagnated.to school....The chances of experiencing a major setback - such as layoff, divorce or death - in the course of a decade have remained fairly constant or fallen for working families over the last 30 years. But the consequences have grown more severe.
------------------------------------------
Copyright 2004 Los Angeles Times

In the article itself, BusinessWeek had anecdotes about rising defaults, weakened credit card securitizations (all of which, by the way, have triple-A ratings, just as their subprime brethren once did), and lower profits for the big credit card banks like JPMorgan Chase and Capital One. American Express has raised its loan loss provisions by 70 percent; Capital One has put $2 billion aside for loan losses, and might need to do more. And on and on.

As for consumers, BusinessWeek had no trouble finding people who were facing suddenly higher interest rates and lower credit limits as the companies began taking measures to hold their losses down. Even bankruptcies are once again on the rise — this despite the tougher bankruptcy law that the banking industry helped pass three years ago. The article ended with a bank analyst saying, “We’re in uncharted territory.”

Yes, we are. As it happens, I spent this week rummaging around the world of credit cards, trying to answer the same question as BusinessWeek. I found my own set of scary statistics, and talked to credible bears who feared the worst. “Is it a ticking time bomb?” asked Sean Egan, co-founder of the independent ratings firm Egan-Jones — and a man who has been prescient about the subprime crisis. “Absolutely.” And I watched, via the Web, a Congressional subcommittee hearing aimed at stopping some credit card abuses that have become rampant.

My initial instinct was also to believe that credit cards would be a rerun of the subprime mess — as consumers got in deeper and deeper trouble, the pain would move up the food chain, affecting Wall Street and the companies as much as Main Street. Capital One would become the credit card version of Countrywide; securities built around credit card receivables would crumble, just like subprime securities.

But what I actually discovered has made me question that assumption, and now I’m not so sure it’ll turn out that way. Which is not to say there aren’t problems with credit cards — or that many credit card users aren’t going to feel a fair amount of pain. They surely are. It’s just that, to a maddening degree, credit card companies will actually do O.K. while the rest of us suffer. Annoying, isn’t it?

There are few consumer products that generate as much psychic conflict as credit cards. We love their ability to allow us to buy things on the spur of the moment, and we fear that same ability. We like knowing that we are carrying a $20,000 or $30,000 line of credit in our pockets — and we worry about the trouble such an unsecured limit can cause. Credit cards enable foolish impulse purchases, but they also make it possible to buy things on credit — furniture, television sets, refrigerators — that are absolute necessities. They help us get through crises, but they can also help create crises if we’re not careful.

Stuart Vyse, a psychology professor at Connecticut College and the author of a new book on the psychology of credit cards, said that “immediate choices are extremely powerful and difficult to resist” and that credit cards play into that desire for immediate gratification. He believes that they have played a big role in the fact that the United States now has a negative savings rate.

Our inner conflict over credit cards has been there, really, ever since cards first became popular in the 1960s. Ministers used to denounce them from the pulpit as the devil’s plaything — and yet people embraced them nonetheless: credit card spending increased every year in the 1960s and 1970s. Back then, of course, they were far more benign then than they are now, with high minimum payments, fairly low credit limits, and interest rates that were kept low by state usury laws. I remember one of the original credit card pioneers explaining to me years ago what he hoped the new BankAmericard might do for the bank’s customers.

“The biggest thing a credit card can do is enable families to take advantage of sales — to buy your skis in the summer and your barbecue grill in the winter,” he said. It was a simpler world, wasn’t it?

Now it’s not so simple. Over the past 15 years especially, credit card issuers have become among the most sophisticated businesses on earth, with proprietary research that tells them almost everything about their customer base. They know how to extract the maximum profit from those customers; they’ve created all kinds of hidden fees, used teaser rates to draw in new customers. With their low minimum payments and exorbitant interest rates — those state usury laws were rendered moot nearly three decades ago — they can even make money in cases where the customer never actually pays off the loan. They can also tell from customer behavior when a borrower is becoming “higher risk” — and they have the contractual right to jack up the interest rates to hedge that risk, even if the customer hasn’t missed a payment.

As Dean Starkman nicely phrased it in the latest issue of The Columbia Journalism Review, the credit card industry “has shifted from a lending and underwriting paradigm to a sales paradigm; penalties, fees and default interest at rates that were illegal a generation ago are no longer regrettable outcomes to be avoided but central to the business model.”

Elizabeth Warren, a credit card critic who teaches at Harvard Law School, says that credit card contracts have become “a thicket of tricks and traps.” There is a powerful sense among consumers that you have to keep an incredibly close eye on your credit card bills because the companies are going to try to sneak one past you if they can. This is not an industry that gives you the warm and fuzzies — rather, it’s one of the more rapacious businesses on the planet. (When I called the American Bankers Association to talk about credit cards, I was told that the people I needed to talk to were all out of pocket.)

So what has happened with credit card debt? Since the early 1980s, debt has gone from 80 percent to 133 percent of disposable income, according to Kathleen Keest of the Center for Responsible Lending. But the rate of increase in credit card debt actually slowed at the beginning of the century. Why? Because the housing bubble had begun, and with it came a shift from credit card debt to home equity loans. From 2000 to 2006, Americans borrowed a staggering $1.3 trillion from their homes. By comparison, credit card debt rose much more slowly.

By the end of 2006, however, the housing bubble had ended, and so had the ability of homeowners to use home equity loans. But it was hard to turn off the debt spigot entirely because so many people had become accustomed to living beyond their means.

Sure enough, it was right about then that credit card debt began climbing. In 2004, for instance, credit card debt grew at a rate of $6.25 billion a quarter. In just the fourth quarter of 2007, it grew by $20 billion. Total credit card debt stands today at about $950 billion. That is still not close to the $11 trillion in mortgages, but it’s within spitting distance of auto loans.

It is that rapid rise in credit card debt that has the bears worried. “Never in history has the American family skidded into recession with so much debt,” Ms. Warren said.

“It is unsecured debt,” said Daniel Alpert of Westwood Capital. “Eventually people are going to hit the wall.”

It is this prospect, I think, that has caused Congress to suddenly become so interested in credit card practices. In both the Senate and the House, bills have been introduced to eliminate some of the worst of the fee practices, as well as the ability of credit card issuers to, for instance, impose retroactive interest rate charges. At the hearing I watched, most of the legislators who supported the bill had their own stories about getting hit with some fee they hadn’t expected.

In good times, people don’t worry so very much about credit card practices. Money seems flush, and if you have to pay a late fee because you forget to pay your bill on time, you write it off to your own laziness. In good times as well, people don’t worry about the rising level of debt or whether it is a problem that the country is piling up more debt than it has in disposable income. We shrug it all off and keep spending.

But in tough times, those fees suddenly feel wrong, and the debt we have piled up suddenly feels onerous. One false move, we think, is all it will take to bring us to the brink of ruin. But here’s where the story takes a different turn from the mortgage and subprime industry. Unlike those industries, which got caught unawares when their bubbles burst, the credit card industry is fully aware of what is happening, and is making adjustments — if you want to call them that — to control its loan losses. It will indeed raise interest rates on problem borrowers —and quite possible on borrowers who really aren’t problems — and it will hit people with fees for the smallest infractions. It has been through recessions before. It knows how to do this sort of thing. Its profits will drop, but they won’t evaporate entirely; Capital One is simply not about to become the next Countrywide.

Indeed, even though people who are already in trouble are likely to default, there is a whole other category of credit card users who are likely to become profitable for credit card issuers: those who usually pay off their balances every month, but because of the recession find themselves needing to go into debt. That ability to do so may be costly, and surely will breed resentment, but it will also wind up saving the credit card companies. Heads you lose, tails they win.

In good times, credit cards symbolize the joys of our consumer culture. In bad times, they symbolize the dangers of that same culture. We’re never going to stop feeling conflicted about credit cards. This may be, in the end, why credit cards will never be the shoe that finally drops.

Copyright 2008 The New York Times Company

Envy, Anxiety, Secrecy, Taboos: The Subject Must Be Money
By ALINA TUGEND | The New York Times | February 3, 2007

I'm as guilty as the next person. I’ve sat around with my pals wondering how a neighbor, a colleague, or, yes, a good friend, can possibly afford to put that huge addition on their house. Or take those many overseas vacations. Or pay for the private schools and the fancy summer camps and the second home.

Some people we just write off as trust fund babies or hedge fund zillionaires or lucky dogs who got into the stock market at the right time and cashed out.

But others are more perplexing. They look like us. They seem to come from roughly the same backgrounds as us. But they sure don’t act like us.
I don’t exactly envy them; I’m fairly satisfied with our lives. Oh, occasionally I wish we had that house on Martha’s Vineyard, or didn’t have to choose between remodeling the bathroom or taking a summer trip, but generally I know how fortunate we are.

But I do sometimes burn with curiosity about how they do it. And wish that talking about money was not so fraught in this society so I could just ask them to explain it.

For years, economists, academics and psychologists have written about how money is the last taboo. It has become a virtual cliché to say that people would rather talk about their sex lives or child abuse than their finances.

Elissa Schappell was a co-editor, with Jenny Offill, of an anthology called “Money Changes Everything” (Doubleday, 2007), a compilation by 22 writers, many fairly well known, discussing how money, whether it disappeared over generations or arrived in a sudden windfall, affected their lives. But the contributors had to write under their own names and some could not do it.

“We lost a good one,” Ms. Schappell said. “He had written about his drug addiction, about a nervous breakdown, but he would not write about money.”

That instinct, however, might be beginning to change. The inability to address issues of money — and the envy it causes — is creating more financial and psychological distress than we can imagine, psychologists and social scientists say. We overspend to keep up with neighbors and friends; take jobs we’re not happy at to keep up a lifestyle we think we should have; and compulsively watch television shows that flaunt multimillion-dollar homes and exotic vacations.

Although grappling with issues of money is certainly not solely an American experience, the paradoxical way we treat it is peculiarly our own and stems from our contradictory history, said Dalton Conley, chairman of the sociology department at New York University.

“One string is consumption, social status and competition,” Professor Conley said. “That’s a strong part of the social fabric in America. Another is the Puritan string in American capitalism: to save, to lead an inconspicuous life.”

The saving and the discreet lifestyle, however, Professor Conley noted, have been somewhat lost in recent times. Instead, no home seems to be big enough and increasingly fancy cars idle in front of us on the school run.

Sometimes it seems as if we must be doing something wrong because we can’t possibly afford what they can — even if we don’t want it.
The truth is, however, that we don’t know the truth, said Shira Boss, author of “Green With Envy: Why Keeping Up With the Joneses Is Keeping Us in Debt,” (Warner Books, 2006).

“The accessibility and availability of debt has created a fiction that wasn’t there 20 years ago,” Ms. Boss said. “We don’t have a grip on who can afford what. Your external lifestyle is a lot lower when you’re living within your means — you can see extravagance, but not financial security.”

Ms. Schappell said that editing her book made her realize that “all the ready credit gives of the illusion of living the American dream.”

In the introduction to their book, Ms. Schappell and Ms. Offill note that “economists report that middle-class families are now carrying record levels of credit card debt, going without health insurance and filing for bankruptcy at several times the rate of the early 1980s.”

“Turns out those McMansions and shiny S.U.V.’s have us mortgaged up to our eyeballs, but until the wolf is truly at the door, you won’t find many of us admitting it.”

Ms. Schappell said she now believed, however, that the old-fashioned ideal of working hard, saving and gradually making it is a bankrupt one. Instead, the way people envision growing rich, she said, is through a windfall: “a malpractice lawsuit, the lottery or going on a reality show — it’s the new American dream.”

But envying people is part of human nature, right? It is one of the seven deadly sins, one of the Ten Commandments. We’re always going to want what we don’t have. There are studies and surveys that show people never feel they have enough; for example, in 2005, PNC Advisors — now PNC Wealth Management — asked 792 of its rich private-banking clients what they would need to feel financially secure; virtually all said they needed to double their wealth.

Twenty-nine percent of those with more than $10 million to invest also said having more money generated more problems than it solved.
“For Americans, it’s all about the pursuit,” Ms. Boss said. “It’s a question of degree. Envy is so evil-sounding — there is a release in just saying it. I try to say right away, ‘I’m so envious.’ We shouldn’t beat ourselves up over it.”

Others say the problem is more one of society and less one of individuals. That the drumbeat to consume more all the time is so deafening that few can resist.

“I strongly disagree that it’s human nature,” said Allen D. Kanner, a psychologist and co-editor of “Psychology and Consumer Culture” (American Psychological Association, 2004). “Our nature is being molded pretty powerfully by the media. If we started a trend to extract marketing from our lives, it would go a long way to reducing money anxieties.” Mr. Kanner is also a co-founder of the nonprofit Campaign for a Commercial-Free Childhood (www.commercialfreechildhood.org).

Tim Kasser, an associate professor of psychology at Knox College in Galesburg, Ill., said the answer was to want less.

There is a small movement, he said, heir to many such groups in the past, called voluntary simplifiers who have chosen to make do with less. This doesn’t mean they live puritanical lives without modern conveniences, but rather they have consciously chosen to make less money and work fewer hours to spend more time with families and friends.

A study in 2005 of 200 “voluntary simplifiers” in 48 states compared with 200 similar people in the same geographical areas who lived regular lives found that the simplifiers were happier according to a variety of criteria, said Professor Kasser, author of “The High Price of Materialism” (MIT Press 2002). (Details about the movement can be found at www.simpleliving.net.)

Even though we do tend to compare ourselves with those who have more, not less, it does help to remember that there is truth in clichés: money does not buy happiness.

“I’d like to have a lot more money,” Ms. Schappell said. “I’d like to use a credit card and not cross my fingers. I don’t want to be a waitress again and I don’t want to deliver balloons again. But money doesn’t make you feel smarter or more attractive.

“You have to look at what money is standing in for in your life. Is it safety? Does it make you socially acceptable? Does it make you important?”
Attitudes about money may also change as the baby boom generation moves toward retirement, Professor Conley said.

“The biggest birth core of the 20th century is now at its peak earning years and about to retire,” he said. “As this group leave their earning years, will they set a leisure and consumption culture for the rest of us or will they move into a more frugal mode of life and the whole dynamic will change?”

Talking about our finances may also become slightly less loaded, Mr. Conley predicted, as there is less and less stability; most people no longer work for the same company for years, nor have standardized contracts or receive defined pension benefits.

“With the increased volatility, people feel more desperate,” he said. “They may not say, ‘How much do you make? How much did you pay for your house,’ but, in a more subtle way, I think people feel the need to find that out more than they did 15 years ago.”

I can see becoming more open about our finances with friends and family. It is not that we have a lot to hide, but occasionally I’ve wondered about certain issues like how our income stacks up next to my sisters’ families’. Maybe I’ll bring that up at the next family reunion. And I’ll suggest that they go first.

Copyright 2007 The New York Times Company

Befuddled by debt? You're not alone
Americans are 'financially illiterate' and caught up in a web of debt.
Poor savings don't help, according to two new studies.
By Catherine Clifford, CNNMoney.com | Feb.26, 2008

NEW YORK (CNNMoney.com) -- Americans don't understand debt, which may be one reason that they have too much of it, according to a survey released Tuesday.

The survey presented 1,000 people with a hypothetical scenario about credit card debt and asked them to compute how long it would take to pay it off. Only 35.9% of the 1,000 respondents could figure out how many years it would take for the amount they owe on their credit cards to double. A full 18.2% did not know how to respond and 31.9% of those surveyed over-estimated the timeframe.

The survey by Harvard Business School and Dartmouth College professors and TNS asked respondents to assess their debt levels. Those who said they felt they were carrying too much debt were found to be "wildly wrong" when it came to using compound interest to calculate how long it would take to pay off that debt.

Of those polled, 26% said they consider the debt they are carrying to be unmanageable, while 61% said their debt level was "just right."

Americans don't realize they're unaware of some of the complexities of personal finance - like compound interest -said Bob Neuhaus, the executive vice president and the head of the financial services sector in the U.S. for TNS. "If financial literacy was higher, you would see more caution in the use of consumer debt. It would not eliminate the problem, but it would mitigate it."

The survey draws attention to a large problem without an easy solution. "Even those with a college degree don't have an understanding of the basic finance ideas," said Annamaria Lusardi, Professor of Economics at Dartmouth College.

However, there are smaller, more manageable steps that can make a difference. Harvard Business School Professor Peter Tufano, a self-proclaimed believer in financial education, does not see credit as inherently bad, but he said that debt services are much more complicated now than they were a generation ago. He said credit card companies could help by creating more consumer friendly credit contracts that plainly spell out the terms, and bills that itemize outstanding debt so consumers can grasp the reality of how they spend money and how long it will take to pay.

A lack of savings could be compounding the consumer debt problem. Another nationwide survey of 1,000 Americans released Monday by the American Savings Educational Council (ASEC) and America Saves found that a mere 53% of Americans have adequate savings with only 28% saving the recommended 10% of their annual income.

Three-quarters of Americans surveyed said that they spend less than their income and save the difference, which may provide enough for an emergency unexpected expense, but only a little over 50% have enough savings to provide for a comfortable standard of living in retirement.

However, those who make more money are able to sock away more for a rainy day, according to the savings survey. Ninety-percent of the high-income group (those earning at least $75,000 annually) say they have adequate savings, but only 48% of the low-income group (those earning below $35,000 annually) can say the same. And 81% of the high-income group report saving at least 5% of their income, compared with 34% of the low-income group.

Regardless of income or level of financial literacy, there is one unifying lesson: have a plan. "Having a financial plan increases savings and financial stability," said Stephen Brobeck, executive director of Consumer Federation of America.

The old image of "child labor" calls to mind images of little kids working in the sweatshops and mines, or the poor migrant kids, deprived of school and playtime, helping out so that their families wouldn't starve.

While such conditions may still exist for a few, most American teenagers employed in after-school or part-time jobs are earning money not for family survival basics, but for their own personal spending money. Such "disposable income" is spent on highly-advertised consumer goods and entertainments.

Most kids get a job not to pay the rent (or utility bills, or insurance or medical), but to buy CDs and videos, to go to movie and concerts, to get more clothes, or to make car payments. Such are the luxuries of an affluent society which advertising has led children to assume and to expect as "necessities."

Are they simply spoiled children? Most would probably not see themselves that way. But, many kids have not reflected about this issue, nor have they considered that maybe they are "spending their youth" on the wrong things. An after-school part-time job may take up hours better spent in developing both their intellectual and physical skills.

Granted, it's better for a teenager to work than to be inert, a passive lazy do-nothing couch-potato being entertained by the TV. But there are all kinds of physical and mental skills which young people can develop at their age.

Physical skills are obvious examples. Kids know that athletics call for preparation and practice to strengthen the body and develop their skills: for example, kids will spend hours shooting basketball.

Mental skills also need such effort and practice. Most kids really need more time for "basics" (basic reading and writing skills, required homework). Teachers frequently have pointed out that their students are often tired in class because of their overloaded work schedules.

Adults -- parents and teachers, taxpayers and schools boards -- need to provide other choices, other activities, other places (such as parks, basketball courts, swimming pools, libraries, craft shops, open schools at night), and the leadership example so that kids have other choices for their "free" time. Many individual adults do such volunteer work. But, in our era, of a constant consumer blitz on TV, many school districts are shutting down their extracurricular programs as "frills" because local taxes can't provide these non-commercial services.

Regardless of the local situation, individual students can re-think their personal choices, perhaps to cut back on their desires artificially stimulated by our consumer culture.

Money problems cause a lot of divorce, domestic violence, and distress in the family. Bluntly speaking, a lot of money problems are caused by our increasing wants -- stimulated by constant advertising -- and our limited means.

Ads are planned to be "on your side": they flatter us ("you deserve it... you can afford it") and send the messages we want to hear ("get it now"). In contrast to the thousands of upbeat "positive" messages from ads, the smiling faces and friendly voices offering goodies, parents are often the only "negatives" around, functioning in the role of the heavies, the killjoys, the nay-sayers:"You can't have it... we can't afford it... you'll have to wait...."

Family dramas are often made up of the intricate dialogue between the parents as providers, unable to provide enough ("What do you think, that I'm made out of money? Money doesn't grow on trees!") and the rising expectations and increasing dissatisfaction (fueled by ads, directly, or indirectly by peer pressure) of the children: the asking, begging, pleading, refusing, counter-suggesting ("Why don't you wear your..."); and the subsequent defending, explaining, parrying ("it's only..."), and so on.

Furthermore, some recent economic changes have caused new kinds of "fairness" conflict between parents and children over family money matters because of unequal economic pressures. Unadvertised "necessities" are getting much more expensive at the same time that many highly-advertised "luxuries" are getting relatively cheaper.

Housing costs, for example, which were relatively affordable a few years ago, have skyrocketed. Homeless people on the streets are only the tip of the less visible, but increasing, new social problems. Millions of multi-family households are living together in cramped quarters, and millions of two-income families need both parents working simply to provide for basic necessities.

Parents -- the adult providers of the non-advertised necessities (such as housing, utilities, taxes, medical, transportation costs) -- often get caught between these rigid demands from the outside and the increasing demands from inside the family for some highly-advertised luxuries.

Technology can create (and advertising can help distribute) some products relatively cheaply: clothes, cosmetics, movies, concerts, CDs, toys, games, electronics, and so on.

Adult providers are often unable to provide everything, because they have limits, fixed incomes, unless they take extra jobs, or borrow money (credit cards) and go deeper into a debt cycle.

At the same time that the parents are stressed to pay for the basics, many teenagers have more "discretionary spending money" than their parents. In 1991, there was over $80 billion of such discretionary spending by American teenagers. Some commentators say that many kids grow up "prematurely affluent" -- having a lot of such "discretionary spending money" available to them during childhood and adolescence.

Later, after finishing school, as young adults, they become "downwardly mobile" because they are unable to support themselves at the same level. Unable to afford housing, they won't "leave the nest" of their parents' home, or, they may leave temporarily (often to occupy college rooms), then return ("boomerangs") as adult dependents who want both an "independent lifestyle" (car, friends) while still depending on the parents for shelter and basics.

Every major city has an "Alternate Newspaper" (Boston's Phoenix; Chicago's Reader) well supported by advertisers (bars, clubs, concerts, movies, entertainments, sports, CDs, albums) and distributed free to this target audience of twenty-somethings, who are often still single, living at home, working their first job, but spending their own money as "disposable income" while neither saving money for the future, nor paying a full share of their real housing expenses. Tensions and conflicts often arise in these extended family situations of such dependency. The real problems of finding a job, of affording housing, and of looking for love, are intensified by the increased expectations stimulated by ads.

Parents expect to take care of their young children and want them to have benefits, good things. But, the intensity of advertising may be causing new problems of degree: How much is enough? How long?

Street crime is often related to youths who rob or steal to get money to buy the latest fads, fashions (sneakers, jeans, sports gear), or entertainments. Very few crimes today, in an affluent society, involve stealing a loaf of bread for basic survival.

Sellers, ideally, want an honest sales transaction. However, broadcasting on TV and radio reaches everyone in a society including those people who are too greedy or too dumb to restrain themselves, and those too poor to afford the products. Millions of poor people are being exposed daily to the same television ads, as a "spillover" audience, to the same intense persuasion targeted at a richer audience.

Where does their money come from? Some street criminals may steal the products directly from the store (shoplifting, credit card fraud); other petty criminals take it (by burglary or robbery) from other people who have worked hard to buy their goods. While a great deal of criminal money goes to drugs, a great deal of these drug profits goes to luxury goods. Blink, blink.

Most white collar crime (embezzlement, fraud) also goes to pay off bills for consumer goods. Most bankruptcies involve people living far beyond their means, by using charge cards until they no longer can pay even the monthly interest payments. (And corporate lenders quietly pass on the cost of these bankruptcies by charging their "good customers" increased rates.) In our society, which is saturated with messages to individuals to want more things, the overall social effects of advertising need more of our attention.

Every society has some ritual events, usually dictated by tradition: religious ceremonies (confirmation, Bar Mitzvahs, weddings, funerals) and social ceremonies (birthdays, school graduations).

What is new is the very conscious manipulation by commercial interests eager to increase the expectations for these events. Genuine gestures and celebrations of life's passages have turned into orgies of extravagant spending and conspicuous consumption.

High school proms, for example, have greatly escalated in cost as tux, dress, dinner, flowers, pictures, limousines, post-prom parties, breakfasts, and other expectations keep rising due to advertising generating peer pressure.

"Spring break" -- originally romanticized in Glendon Swarthout's novel, Where the Boys Are -- has become increasingly commercialized, especially by MTV, peer pressure in the service of selling products (beer, clothing) and services (travel agents, hotels, airlines). Beaches in Florida, Mexico, and the Caribbean are filled with young people spending OPM.

High school "Senior Trips" used to visit local patriotic sites, or Washington D.C. Now, some schools sponsor week-long Caribbean cruises or ten-day European tours. Not only does peer pressure exist (from other students whose parents can afford it), but also the pressure from the local organizers (often teachers, administrators, or popular "student reps") who often directly benefit (free tickets) from such trips. More recently, travel agencies targeting high schoolers have created "Grad Getaways" -- post-graduation trips in the summer, pitched as "rewards" for finishing school, and the "last chance" to be with some old friends.

Weddings also involve OPM, usually that of the father of the bride. See any thick copy of the various bridal magazines to witness the increased expectations in bridal dresses, tuxes, flowers, decorations, cakes, music, invitations, photographers, videographers, clergy, catering, receptions, bands, venues (a hall, hotel, club, outdoor tents), drinks, and number of guests. (See also: Cinderella Dreams and Jaclyn Geller, Here Comes the Bride)

Disposable Income. Discretionary Income. A l997 survey (by Teenage Research Unlimited, Northbrook,IL) indicated that American teenagers had a combined income of $105 billion, primarily from parents, gifts, allowances, and part-time work. Although most teenagers claimed to have a "Savings Account," not much money actually made it to the bank: $103 billion of this [$105 billion] was spent as "disposable income."

Many ads use the association technique to link their products with many desirable "intangibles," benefits such as feelings of success, love, and belonging. Many ads also stress positional goals (1st, Best) with few "Winners," but many -- if you don't buy the product -- "Losers."

Many ads encourage illusions and totally unrealistic expectations. As Charles Revson, the President of Revlon cosmetics put it: "We make lipstick, but we sell dreams." Women's self-esteem, critics say, is especially vulnerable because of the constant emphasis on youth and beauty. Furthermore, beautiful models hold up impossible ideals, contributing to the epidemic of eating disorders (anorexia and bulimia) among young women trying to look like the ideal presented in ads and fashion magazines. (Erving Goffman's Gender Advertisements alerted a generation to this problem. Mary Pipher, Can't Buy My Love: How Advertising Changes the Way We Think and Feel.) Ellen McGrath, author of When Feeling Bad is Good, advises women to become less vulnerable to the beauty ideals peddled by ads and the media: "Reject the images of physical perfection. Recognize that no one in real life looks like the models do, not even the models."