This year we have seen unprecedented changes in the way the world views money and the organisations everyone thought would be rock solid forever. In particular we hear the term credit crunch, which indicates the that borrowing money is more difficult following a period where lending was quick and easy.
So we know now that with banks fighting extinction and the domino effects on all of us together with rising fuel and food prices that the world is now a less confident place than a couple of years ago. A key question though is why? why should it be that just because it’s difficult to borrow money should we feel a sense of dread or fear? There are textbook economic answers to this of course, and this is part of a cycle, but there is also a human perception answer here.
We are trained from an early age that to own and to accumulate is a good thing and that to better ourselves is progress. There is no denying the positive effects owning something new or better than we had before but what happens to our confidence when prices go up or salaries stay the same? We are less sure and look around to see how else we can make ourselves feel better.
The way we get information is getting faster every day and with the ever increasing media available, at ironically cheaper cost, we are exposed to messages encouraging us to take more holidays, buy another concert ticket, sign up for a pre-release blu ray disc or upgrade your car. In fact without thinking very hard about it, we can easily be convinced that it’s really normal to keep upgrading and to make our lives feel better by taking more expensive holidays. They imply that if we don’t keep up then we become excluded will eventually be unable to function in the modern world, get left behind and feel lonely. It might be time we got a new attitude to money and ownership and stopped sleepwalking with the idea that borrowing and buying will fill gaps in our confidence and ultimately our happiness.
In this time of credit difficulties and rising prices we are still encouraged to take up new ways to spend what cash we do have in the form of discount food and clothes stores, interest free furniture and balance transfers, with a fee, of course. All of this points to the fact that we are still encouraged to renew what we own and that the things we already have are now overtaken by the next version. ‘New improved’ is the dream we are given and we devour it mostly without question.
30 Days to crunch credit
It’s not easy to think of ownership in a different way after years of easy credit and fast moving improvements to our every materialistic desires, but it’s worth a try. Let’s try an experiment for one month, something where the aim is to consider every purchase carefully and to look at all that you own and to think of the value it brings you. It’s possible to find new ways to feel fulfilled and happy other than purchasing power, but first there needs to be a cleansing of the way we think and a dedication to break the habit of spend to feel better.
Try committing to spending 30 days where when you go shopping you only purchase what you know you will eat or drink and disregard the ’special offers’ that you had no intention or need to go out and buy. Think long and hard about why you need to buy that £200 pound gadget when something half the price with a lesser brand will do the same job. Is it necessary to update your car just because the manufacturer advertises a ‘face-lifted version’? Does you current car still get you where you need to go, do you have the luxuries you actually need?
Once you have had a stock take of your possessions and understand the difference between what you actually need and what you just feel like having you can start to think of how to satisfy your time in a different way. The next stage of crunching credit is to think of how the things to do that are inexpensive or free and take a little time to do. Take more walks, read more talk more with friends over a meal rather than sit in front of that expensive plasma. Do you really need that expensive car? can you get fit and save money by using a bike for local journeys?
While these suggestions are in fact very simple, the process of breaking a habit of quick purchases to feel better for a short time is more difficult but ultimately more rewarding. The obvious money savings aside, you will feel less vulnerable when the next credit crunch comes around because the less you owe the more of yourself you own.
