306/365 (Nov 2, 2011) – I get a little discouraged by the excessive nature of society these days. All the narcissism, all the talk about about what “I” want, and the amazing consumerism that the seasons of “giving” have turned into, they seem to have become far more about “receiving”. It’s natural to want things and experiences, but sometimes fulfilling every desire has consequences. So many people live beyond their means, fail to save for the future, and are so obsessed with having and experiencing the “here and now” that they forget to look ahead. I used to work in an environment where everything was about instant gratification. “I want, therefore I should have – NOW”. It was like working with four year olds. “Why shouldn’t I have such and such, I deserve it, I worked hard!” Sure, great, you got a new job, you got a raise, you made great tips this week. Sounds like a great excuse to rack up that credit card again, you know, the one that you never actually pay off and pay exorbitant interest rates on because of it? How about looking to the future a bit? Don’t delude yourself, interest rates will rise again, who knows when, but it will happen. Your mortgage will cost more when it does. Even if you locked in for 5 years, eventually you will have to remortgage at some higher rate than it is at now, since we are at all time lows currently. Remember the 80’s when interest rates were as high as 22%, will your current lifestyle be able to afford that home if you end up at those rates? Today Greece looks about ready to go into full default and that could very likely be the opening line for another massive financial fallout that could have extremely widespread repercussions for us all. The National Institute of Economic and Social Research, a think tank, said that Britain had a 70 per cent chance of falling back into recession under the “increasingly more likely” scenario that the euro crisis will not be resolved imminently.
The economy is still on a roller coaster ride (just managing our stock portfolio in the past few weeks has been an exercise in judgement), jobs and contracts could dry up as quickly as they materialized. The trickle effect impacts those industries that rely on discretionary income – restaurants, movies, fitness centres, personal trainers, spas, etc, could be substantial. People will eat in, get fewer pedicures, work out at home, go out to fewer movies. Any service industry generally suffers when people watch their money. Yet people delude themselves that the future will be as rosy tomorrow as it is today, and they tell themselves “I’ll start putting money aside next week/month/year” However, statistics show that when people make more, they don’t save more, in fact they spend more! Probably because they are trying to get/experience all those things they think they have been denied somehow, or at some stage of their life.
Hopefully things remain stable, but what if they don’t? Isn’t it more intelligent to consider that things might suddenly go sideways and exercise some caution? Exercise some patience? We live in risky times. I was self employed for a number of years, the profit margins look great, but it’s easy to forget that there are costs that aren’t being considered – dental and health benefits, pension/retirement contributions, vacation time & pay. Sometimes we seem to be overly optimistic about the future and what it holds financially. Don’t forget about putting some of that new found income towards things like paying down the mortgage (most mortgages allow annual lump sum prepayments and those go straight onto the principal, not the interest! Max out on them if it’s at all possible, that’s one of the ways we managed to pay off our mortgage in only 15 years – the others included buying out of a higher interest mortgage when rates dropped, paying bi-weekly instead of monthly, and going variable instead of fixed rate). Don’t forget about contributing to that TFSA, and adding to those RRSP’s.
And, if you can find the money and are willing to give up something that might be less than necessary in your life, don’t forget about giving to those who need a little assistance.
It’s that time of year again, when we all start thinking of gifts for Christmas. We begin to be bombarded by advertisers vying for our money. Shiny objects, cool electronics, pretty new togs. In a world of “I WANT” Christmas is the wet dream of most manufacturers. A time when they can promote their products and further drive the desire we all have for things and experiences we probably don’t need, but which society tells us are desirable and therefore we convince ourselves collectively that we must have more, MORE, MORE!! No one is immune to it, and we justify it by telling ourselves that we are ‘treating ourselves’, or that “we deserve it’ for some reason. Maybe because we were denied things when we were younger because our families couldn’t afford things, we overcompensate and spend on things because it raises our perceived affluence. There are different reasons. But when we don’t give in to every desire, the ones we do allow ourselves are probably more rewarding.
I’m not suggesting we don’t deserve something now and then, people who sacrifice their own desires because they have put their children first, or they have other dependents, they definitely deserve to treat themselves now and again. But what about those who have families but have excess wealth, or those of us that don’t have children and have a decent income that more than covers our living costs? Those of us with discretionary income, do we really “need” everything that we “want”, or could we maybe find a way to help others meet their wants, which are likely basic needs, since so many people can’t satisfy those fundamental requirements.
With Christmas coming up, there are so many ways to give a different kind of gift, one that makes you feel good, and helps someone else out in the process. Instead of eyeballing up that new electronic toy, or that somewhat frivolous purchase that you know will only give fleeting pleasure, maybe think a little beyond the traditional gift box and package a little happiness for someone who might not have received anything at all.
The problem is, many of those charities are global giants and the administration behind them is so large that very little of your money actually goes towards the things you think you are giving for. It’s hard to sort out who to give to, and right now there is a dizzying array of charities fighting for your money. Yes, we see the pleas for charitable donations for tsunami victims, earthquake victims, flood victims. And they need assistance, most definitely. Such large scale disasters tend to move us to give. Sadly, some of the less well managed charities end up seeing a lot of that money and it doesn’t necessarily get where it is needed the most. A good place to look for some information on where your money goes with respect to many Canadian charitable organizations is in MoneySense’s Charity lists.
We regularly give to several charities instead of giving physical gifts. Some years we give to the large charities – Doctors Without Borders, Plan Canada, World Vision – some years we focus on the charities in our own backyard – Backpacks for Kids via the Salvation Army and the Lower Mainland Christmas Bureau for example. Some years we focus on conservation – Nature Conservancy of Canada, Ducks Unlimited – while others we focus on ‘those that can’t help themselves’ – Critter Care Wildlife Society, the BCSPCA, Wildlife Rescue Association of BC, Small Animal Rescue Society of BC. Last year we donated to all of those over Christmas, as well as for birthday gifts throughout the year. Year round we also support the Canadian Cancer Society, as well as to the Brain Tumour Foundation of Canada in memory of two friends we have lost to that disease. And what means more, a gift that someone will smile about and then toss in a drawer, not needed, probably never used? Or the knowledge that someone in need received the benefit of the money. Personally, I vote for the latter over the former, I just don’t want “Stuff” anymore. Give the money to people who need it more, and just give me the sentiment, that means heaps more than some silly “thing” I don’t need and have no place for. I will appreciate the “gift” to someone else significantly more.
Kirk and I are lucky, (well, it’s not luck, we worked and planned, and managed our finances well, and we have no dependants) we carry no debt and own our assets (home, boat, vehicles) outright. That allows us the freedom to give more. But even if you aren’t debt free, if you have some degree of discretionary income, think about others for a moment. A recent article in the Globe and Mail was interesting and pointed out some of the things have been thinking about over the past few years when I consider where and how I spend money. Movie or mango tree? How your discretionary income can help others.
So if you have the means, and if you have a generous nature and are so inclined, look out the window instead of into the mirror and, as Margaret Wente said in a recent column, “Give twice as much, and twice as well. Work on it. It matters”
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