So guess what?
Here comes another government agency to help.
You are so easily tricked and trapped by the fine print,
a credit card agreement, a mortgage loan application
that a Consumer Financial Protection Agency is needed.
It will “give families a chance to take control over their money,
but families will have to be smart” states Elizabeth Warren.
Warren is Chair, Congressional Oversight Committee
and a strong advocate of the agency under consideration.
TIME OUT!
Will someone please show me how any agency or anyone can help you
take control over your money unless you are a ward of the state?
In the same breath, Warren echoes my point…namely that
“PERSONAL RESPONSIBILITY MATTERS.”
I’m for a major rewrite of all manner of financial contracts.
They need to be understandable at the grade eight level where,
regrettably, far too many consumers are conversant.
This still changes nothing when you are faced with a purchase decision.
To spend, save or finance remains the question.
Immediate pleasure or deferred gratification an agency does not rule.
Consumers are no more or less rational than they were in 2008 or 1898.
Having less money, no job and the fear those elicit have worked miracles.
You could be spending less or saving more, depending on how you see it.
No government agency facilitated that change. You did it all by yourself.
But are you inherently different? Has your deeper motivation changed?
I suggest that you are the victim of three hidden motivators.
The first is “Forced Choice”, a hidden motivator where regulation
compels that you spend on fees and services to get the benefits
only conferred by others, like your water, telephone, cable, taxes, etc.
You’re spending is also driven by what nature requires you have.
These are the realities of the human condition…food, shelter, and other basics.
If you have cut back and got frugal it’s most likely around two other motivators.
These I define as Social Choices and Free Choices.
Many of these, too are hidden motivators of your spending because
you are not aware of how they rule the choices you make.
Social choices are driven by convention, informal habits such as
a sense of duty (donating to the poor), fashion ( the latest outfit/style),
and custom (new car every three years).
Many are things you think you ought to do and have.
A dream to fulfill. A passion to satisfy. These are powerful motivators.
Free Choice is another hidden motivator at work on your income.
Your character inspires many of the things you purchase.
This is where impulses are unchained…your creativity explodes.
Putting a lid on these expenditures is tough indeed.
No democratically elected government agency will change any of these.
You are still in control but only just barely (as in rational choice)
until you get these three hidden motivators under your power.
GET THIS RIGHT
Awareness and understanding of “why your money disappears”
is far more helpful than endless navel gazing at where it goes.
You must get this right first. Then control is all yours.
Copyright 2010 William M. MacKay
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( 2.7 / 62 )Are you spending on purpose or still buying impulsively?
While men and women seem to do it –shopping--differently
you still have to get it right to both feel good and meet your goals.
These are different in so many respects.
Feeling good is instant; satisfaction in the moment.
A welcome rush of dopamine as you salivate over
all the great stuff you could choose and finally purchase.
Isn’t it wonderful! Spending has its rewards
that have nothing to do with the object purchased.
But that often is the problem. Think QVC, the shopping channel.
Goal achieving is another matter.
The journey may be long, difficult, and frustrating at times.
At others, it provides a gratification that comes from
the recognition that you are making progress
towards something you have identified and thought about
as a way to make you really happy, provide security,
give you the status you crave, the lifestyle you want.
Gender differences are important to consider here.
Evolutionary psychologists are exploring how shopping
trigger some of your basic instincts which program you
to respond in certain ways unique to your gender.
Foraging and gathering for women with their sensibility
toward color, texture, and shape lend themselves to trips to the mall
and the social and companionable aspects of shopping with a friend.
Not everything is ever right (ripe) so repeated trips are essential.
Men are programmed to be more solitary in their hunt for prey
bringing home anything that met the immediate need.
Once captured, it was over and done with. Let’s eat.
Shifting the purpose of the gathering and hunting
toward longer term goals helps both genders focus differently.
Spending is no less gratifying when it supports a purpose
where the time horizon is longer and the fruits of the harvest
are evolutionary, building for the future as you age
and are challenged to survive in a different world.
Think about it the next time you go hunting or gathering.
Copyright 2010 William M. MacKay
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( 2.7 / 59 )Change your image of ‘your own poverty’ and you’ll be richer.
By poverty I mean your self-image of being poor.
Or having less than you want and less than others have.
If you don’t think you feel poor, look at your actions.
It is your deeds and behavior that are the best indicators
of what you really feel and believe about yourself.
Your values, beliefs, and attitude represent that view.
Understanding these is one way of managing your spending
because spending is a primary tool to create and validate
your self-image.
No one can do this for you although it would be helpful.
You probably don’t want to do it for yourself either.
But you should. And your partner could help and vice versa.
This allows an equal exchange that may best serve the relationship.
Now there could be some troubling realizations from this, too.
You may recognize that you are responding mindlessly
to many purchase choices as you seek to raise your standing
in your own eyes. This becomes a habitual pattern.
This fixed-action spending is often automatic.
It doesn’t move you in the direction of your more
consciously considered longer term goals and dreams.
When you refocus your attitude toward what you have
rather than what you don’t have, miracles can happen.
They may not be of biblical proportions immediately.
But over time the cumulative changes that come from
a greater sense of awareness and gratitude for what
you do have will guide your spending to more positive ways
that validate the new self-image you have created.
The gap will close quickly between what you have
and what you want.
You will feel richer with no more than you had before.
Now that’s a miracle to celebrate.
Copyright 2010 William M. MacKay
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( 2.9 / 67 )You thrive in the battleground of the marketplace.
There is little or no conflict about what to buy.
No laborious, gut-wrenching decision paralysis.
Rational choice strategy hardly matters at all
when you see something you want. Just get it!
Evaluation is easy; justification easier.
It’s amazing how decisive you are in the face of
inadequate information, time pressure, ill-defined goals.
Need I add – shortage of money.
But when goals are unclear the trouble starts.
Unless you know what you want to accomplish
no mount of stuff will get you there.
And with any ill-defined goal, how do you know
if your decision was right or wrong? Of course, you don’t.
Factor in all the financial choices you make every year and
there is room for ambiguity, waste, and large amounts of folly.
I’d like to think that buying a house and a car remain
the exceptions in this non-comparative process of decision making.
Here, if anywhere, is when you must actually weigh the evaluation
of options for their superior merit prior to purchase.
Most people get it that these should not be impulsive.
The challenge is to move more of your other spending
toward the satisfaction of longer term goals.
There is no reason to believe this makes for less fun.
Copyright 2010 William M. MacKay
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( 2.9 / 60 )Do you remember how happy you were back in the good times?
And how does that feeling of well-being compare with today?
In spite of the Great Recession, you might have had a lot less then.
If you are old enough to remember houses were smaller 35 years ago
As much as fifty per cent smaller when you count square footage.
There was enough room, too on the highway to actually get somewhere.
And the space on your hard drive was less than a turbo stick.
What space you are in today is more about emotional space
than what you can buy with your income, dividends, and coupons.
And you have, on average, much more of those than before.
Yet, very little has changed, the experts tell us, about our happiness.
What happens is that you quickly adapt to improved situations
and peaks of satisfaction and pleasure that arise with something new.
Even bigger incomes and lottery winnings can’t maintain the emotional
high that comes with them and you are soon no happier than before.
This affect is more than a passing curiosity.
If getting more of whatever you use to keep score and feel good
is no longer able to raise your level of gratification and happiness
then why keep doing what you have always done?
The point of working longer and harder is now suspect.
Better to stop doing that and try something else.
If you don’t you might suddenly find yourself old and grey.
Perhaps too tired to keep on trucking until everything is just right.
Accept that there is no perfect moment
to get on with doing what you want.
And it’s okay to settle for ‘optimum’ conditions.
But identify these you must to move on wisely.
Wanting it all in maximum proportions
May never be enough to make you happy.
Copyright 2010 William M. MacKay
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