Looking On The Bright Side: How to Find A Silver Lining In The Current Financial Crisis
There was a standard mantra in my house when I was growing up: "make the best of what you've got". If we were between paydays, that might mean eating grilled cheese sandwiches or eggs and biscuits for dinner, taking our lunch to school or foregoing that new outfit at the mall. To my Dad, it meant finding a way to make due in order to avoid even the smallest expenses. And my Dad lived what he preached, tying knots in his broken shoelaces and sewing up holes in his socks.
Were we poor? Actually, no. We weren't rich by any means but as middle class families go, we were doing pretty good. My Dad just had a different perception of what qualified as a legitimate need for spending money and had no qualms about foregoing material luxuries in order to keep a few extra dollars in his bank account.
Now that I'm grown and have a family of my own, I've realized that maybe Dad wasn't so far off the mark after all - don't tell him I said that, of course - he'd never let me live it down.
Granted, he went to the extremes to avoid spending money but his basic idea was right on. And the reason it worked is that he wasn't worried about wearing the "right" clothes or driving the "right" kind of car. He would have never spent $100 bucks on a pair of sneakers - not when he could get shoes that worked just fine at PayLess or WalMart for a mere ten-spot.
Which brings me to the point of this article: as bad as the economy is, maybe there's a bright side after all.
Now, before you start typing out angry comments to this post, hear me out. I'm not saying that losing your job or your house is a good thing, although I've known lots of people who lost their job and then later discovered it was the best thing that could have ever happened. But that's another blog.
Nor am I saying that we don't all deserve to live the "good life", because we most certainly do. But what exactly defines the "good life"? Is that really measured by our net worth or isn't it more based on the amount of happiness that we derive from our existence on any given day? And as we all know (and as we've seen), if there's one thing money can't buy, its happiness.
What I am saying is that this dismal economy has forced many of us to come back down from the clouds and start being realistic about the way we look at money.
And maybe that's not such a bad thing.
Our society has become a people of convenience. Our food is processed and microwaved so that we don't have to waste time cooking it. No-one carries money anymore - instead we just charge our purchases on that magical credit card because it allows us to worry about how to pay for the item later. That same mentality is a big contributor to the mortgage crisis we're now seeing as millions of borrowers bought houses they really couldn't afford because greedy lenders gave them a way to "bump" the higher prices to a future date through creative financing called adjustable rate mortgages and balloon notes.
As a result, we not only stopped seeing the "big picture" but we became oblivious to its existence at all. We have been focused on the "here and now", with the idea that the "here and now" was intended only to appease our flights of fancy without regard to the price we might have to pay later. Don't believe me? Just look at the environment. If that's not arrogance, I don't know what is.
We distorted the proverbial "American Dream" to become something that represented an obnoxious amount of wealth that was free of any scruples or morality. And as long as Corporate America was willing to let us charge and extend our financial obligations, that skewed American Dream stayed in tact.
But we should have known better.
It doesn't matter who you are or how rich you are, reality will always come crashing in. Its just a matter of time.
And that's what happened here.
Our main export is actually debt - yes, debt... about $700 billion per year in financial securities that until recently were backed by a seemingly booming economy. But now that our economy is struggling, those financial securities aren't as appealing to foriegn investors which makes our economy worse, which makes our securities less attractive and so on and so on. But what's really sad is that we didn't diversify our incomes like we did our portfolios. America doesn't really "make" a ton of other things so when selling debt stopped generating cashflow, we had nothing else to take up the slack.
The trickle down effect of the Wall Street fiasco is that your average Joe and Jane are suddenly faced with limited incomes and rising prices. Ridiculously rising prices I might add - I saw a guy bringing back a roll of foil at the grocery store the other day - it seems the store had failed to give him the sale price of $7.95 and instead charged him the full price of $9.59. $10 for a roll of aluminum foil? It better do the cooking for me.
My point is, now everyone's feeling pinched and not just in the "two more days to payday" kind of way, but more of the "what the hell are we going to do now?" kind of dilemma.
And that's a scary place to be.
But before you throw your hands up in the air, take a deep breath and relax. While its doubtful that the big conglomerates have learned their lesson from this experience (visit AIG), you and I can actually come away from this with a new and enlightened perspective while managing to keep the shirt on our back. Its just going to require a little shift in perspective.
For starters, while I don't want to encourage not paying your bills, the truth is that creditors are much more likely to work with you if you're falling behind. Stay current on your obligations and you aren't as likely to see that accomodation. So if you're staring at thousands of dollars in credit card bills, you need to make some decisions about your priorities.
Your mortgage, your utilities and your grocery bill all come first. If you can pay something on the credit cards, great. If not, then you need to come to that realization and accept it. Yes, your credit score might tank before this is all over but take it from someone who knows, you can rebuild that credit. Its a long and winding road, but trust me when I say it can be done.
Once you've got your priorities in place, you need to learn, as my father did to make the best of what you've got. Its okay if we can't buy all the latest gadgets on the market. Its okay if we need to keep driving the same car beyond two or three years. In fact, pay that puppy off and discover what its like not to have a car payment at all.
Downsize where you can and believe it or not, start saving. Seriously... even if its only $10 a payday. That little emergency fund could definitely come in handy some day and if nothing else, it will give you a sense of security and accomplishment, something we could all use right now.
Stop putting in so many hours at the office and start looking at the millions of other ways to make money. The truth is, there's still money out there. Its not as free-flowing but I can tell you as a freelancer, that this month may well be one of the best I've had this year.
The reason is that I diversified my skills and branched out into areas I don't normally tackle. And I'm being rewarded for those efforts with enough funds to cover all my obligations. Did I strike it rich? No, but I do have a little breathing room which is really something considering where I might have been instead.
You can do the same. Maybe start your own virtual assistant business. Clean out that garage and start selling on eBay. Go sling drinks at your local bar on the weekends. The point is, take action. Don't just sit there biting your nails wondering where the money will come from. The opportunities are there - you just have to act on them.
And if you think now is not the time to start a new business, think again. Many small businesses are pulling in the reigns and downsizing. They're cutting services and products because they want to control costs. But you don't have any overhead and if you play it smart, you can keep it that way making any money you earn pure profit.
Cancel your gym membership and start running or walking in your neighborhood instead. If you've got the space, grow your own vegetables - lettuce, cabbage and broccoli are a few good winter varieties to start with. You can even plant a tomato plant in front of a sunny window in your house and enjoy fresh tomatoes all winter long. Don't think that will make a difference? Oh yes it will. At about $2 per pound where I live, tomatoes can do some damage to a grocery bill.
If possible, wash and iron your own clothes instead of taking them to the cleaners. Learn to cook again instead of dining out and discover the beauty of a PB&J sandwich and a glass of milk. Examine your lifestyle - can you rent DVD's instead of going to movies? Can you spend a Friday night playing cards with friends instead of going out on the town? There's is no shame in saying "I can't afford that right now" and certainly not in saying "I don't need that right now".
Look around, take stock and re-evaluate how you approach your money. You don't have to tie knots in broken shoelaces but you can start making changes in what qualifies as a necessary expense. You'll likely find that while your "cuts" aren't always pleasant, they are usually doable and make a noticeable contribution in your quest to survive our economic catastrophe.
And then when the economy does finally bounce back (and it will) we'll have adopted an entirely new way of living. One that doesn't depend upon the greediness of others but relies solely on our own creative energies and practical state of mind.
And then perhaps, we can start teaching that lesson to the powers that be.