A recession? Seeing friends and loved ones can be like getting a pay rise

The disastrous events in the world of international banking and finance over the last week have caused feelings of insecurity and fear. Institutions thought to be safe have crumbled and we have all had reason to think of how to make sure what we own is safe.

Studies show that despite rises in standards of living in the last generation, we are not necessarily any happier and more media time has been devoted to the concept of happiness over recent weeks with a good example by BBC political reporter, Brian Wheeler who suggests that now might a be a good time for our politicians to focus on our general well being.

There are many things that we think will make us happier and most of these will cost money and more importantly require us to take on debt to buy them. Debt is something we are told is almost unavoidable once we become adults, from the point we go to university to our first car or that expensive long haul holiday. A quick phone call and the quote of a 16 digit number on a plastic card and we have that new opportunity to improve our mood.

What if we tried to think differently about what makes us happy? What are the simple changes we can make to recognise where we are already happy and also where we can do things that are within our grasp and do not require us to build our mountain of debt. Research by Nattavudh Powdthavee suggests that our communities and friendships can be measured financially and contribute hugely towards our mood and confidence. Going from seeing friends and relatives once or twice a week to seeing them more often can be worth an additional £15,500 per annum. Dr Powdthavee points out that this impact on mood suggests the need for government policies to encourage greater social interaction. The modern drive to work longer hours and to travel further to do so is contrary to the assertion that we need only make more time to spend with loved ones or to make new quality relationships to increase our fulfillment in life.

As we know, work life balance is not easy to achieve, however, small changes in what we do during our week such as making time for a coffee with a friend, or watching a film on T.V. with a loved one can contribute in a gradual way to shifting mood and demonstrating the way to keep improving our happiness.

Get confident to beat the credit crunch

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.