July 10, 2010

Change In Money Consciousness Required


We have grown use to abundance in the developed world. An abundance that has failed to make us any happier. All our big pile of cash has got us is record levels of depression and an environment falling apart at the seams. So why are so many people continuing to spend?

We need a radical change in how we make and spend our money. If more is not working, we should try less and see what happens. It seems counter intuitive, but it may be that the best thing that could happen to us is having less money to spend.

My favourite financial guy, Garth Turner, recently posted on his blog The Greater Fool: "The recession we thought was behind us is actually reappearing, and it will take a serious attitude adjustment on the part of many to survive." Ouch.

In 2008/09 household wealth was evaporating faster than a puddle of alcohol in a heat wave, and people were thinking about changing their financial attitudes and habits. Some actually did. For example, there are groups dedicated to not buying anything new for a period of time. Most members find they get hooked on their new simple life and never go back to shopping. But they are a rarity.

John Michael Greer, author and cultural critic, noted that changing our relationship with money is not that popular, despite the proven dividends it would pay:
"The problem is that the changes in consciousness that would actually do some good are changes that next to nobody in the industrial world is willing to make: for example, a shift in priorities that deliberately embraces poverty, accepting a rich personal, intellectual, and social life as a substitute for, or even an improvement on, the material extravagance that the industrial nations currently offer their more favored inmates."
We are our own worst enemies when it comes to cash. In our pursuit of more we open ourselves to the 'Wealth Effect'. It states that people will increase spending as household net worth increases. And this in spite of 88% of us thinking that life is overly materialistic. Net gain? Zero.

Other people are shifting the way they think about work and money. The ship is slowly turning back toward our frugal roots. The wealth effect works in reverse, too - the less wealthy we feel, the less we will spend. Perhaps being less wealthy is the answer then. Make less, spend less, live more. This is the new money consciousness, and it just may save our sanity and our environment.

Greer gives hope by reminding people that the "change in consciousness is certainly accessible to each and every one of us". However, "it requires a rare willingness to step outside of the approved habits and ideas of modern industrial cultures."

We can be brave, and step away from habits we know to be harmful. We can quit spending. We can stop the futile attempt to prove that money can buy happiness. A better, more simple, sustainable life lies ahead, and we will be happier for it. But it will require a change in money consciousness, and for some of us, a radical change.

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