How not to spend your disposable income

A couple recent news articles have opened my eyes to the fact that Americans seem to simply have too much money.  They have so much money, it seems they don’t know what to do with it.

NPR’s ”All Things Considered” had an interview last night with Charles Fishman of FastCompany magazine who recently wrote an article on the bottled water trend in the United States.  I must admit I too am guilty of buying bottled water, but I hadn’t really though of the absurdity of it all.  The full FastCompany article is available here.  The gist of it is that American’s spent $16 billion on bottled water last year even though they can get the same product for free from their faucet.  What about the health benefits?  We think of bottled water as being pure and free of chemicals and additives, but the truth is that the two largest bottled water brands, Aquafina and Dasani (owned by Pepsi and Coke respectively) just use purified municipal water.  Basically, they just turn the tap on, let it run through a filter, then sell it to you for $8/gallon (based off $1.25 per 20oz bottle).  We buy a billion bottles of it a week, and we could get it for free.  The municipal water systems in the US are extremely safe and high quality, often coming from pristine water supplies that are highly filtered and highly regulated.  We have excellent water available to us for free in our homes, yet we continue to pay for it instead.  The sad part of all this of course is that 1 in 6 people in the world has no access to safe drinking water at all (1/6 statistic is from the FastCompany article).

The second article I read that shocked me about the amount of disposable income that many Americans have is something I stumbled across while reading reviews about the Microsoft Zune (Microsoft’s answer to the iPod).  I only read the brief summary (the free part) of Cody Willard’s article about the Zune over at thestreet.com (article link), but he mentions, in passing, that he’s spent “…about $4500 in the last few years at the iTunes store buying these albums…”.  He has spent nearly five thousand dollars in the last few years buying music on iTunes, and I’m sure he is not alone.   The 9.1 million people in Somalia have an average income of $600/year.  The $4500 spent on iTunes would be the equivalent of 7.5 years of income for the average citizen of Somalia.  That, to me, is mind boggling.  It forces me to open my eyes and realize that the responsible thing to do is to give a little back to society. 

I often feel detached giving money to charities, never quite knowing where my money is going, who it is helping, how much of it is really going to administrative expenses, but more transparent options are now available.  Similar to Prosper.com but with a more charitable aspect, Kiva.org facilitates microlending to the working poor all over the world.  You lend money, interest free to a small business owner in the developing world, they are able to make the business improvements they need to get on thier feet, then they pay you back your principal. CharityNavigator.org performs independent reviews and rates thousands of charities worldwide and arranges them by category so you can easily find a charity that is aligned with your goals.

Perhaps its time for all of us to reevaluate our need to spend our disposable income on disposable things and find a way to divert some of our disposable income to a more socially conscious cause.