Saturday, 26 May 2012

Did We Learn Anything From The Recession?

I did some Economics reading in preparation for this post. That was a daft idea. A HA HA HA HA HA! Ahem.

Maybe a smaller house ..
I was looking for an explanation of the causes of our recent worldwide recession and I found this on Wiki, which I was doing okay with until it mentioned the 'Gaussian Copula Function'. I wondered what it was and if I come across a word I don't know in a book I'm reading, I'm the sort of person who stops reading and looks it up. So I followed the link for Gaussian Copulating whatever-it-was here ... and then somewhere about half way through the document, I think my brain fell out. Or exploded or something. I'm not entirely sure but it hurt, and I decided I'd done enough research. (Let me know if you do any better, I still want to know what it is.)

But as this is my blog, I'll just come up with my own half baked theories and carry on with the post regardless. What the heck, I tried to get better informed.

DID we learn anything from the recession? We must learn surely, er, it'll just happen again otherwise won't it?? Actually, I say DID we learn in the past tense, because here in South Africa it's, well ... been kind of over for a while now. And I know in some countries, the recession is still very much ongoing. The UK is apparently now in a Double Dip Recession. I'm not going to look it up, but it sounds bad to me.

Just a look down the contents headings of the Wiki article I was reading gives a clear image of the turn of events, starting in 2007 when the US housing market crashed with a resounding bang.

Easy credit, weak and fraudulant underwriting, predatory lending (I rang the bank to discuss an overdraft once, and was persuaded to take out a loan I couldn't really afford instead), increased debt, incorrect risk pricing ... A catalog of mistakes and bad judgements - but can we blame it all on the financiars and banks?

Did we, er, perhaps. Just maybe have something a lot to do with it ourselves? Do we want too much? Hmmm. I just blushed a little, I think maybe I could answer "yes" to that question.

What the recession should have taught us, boring as hell though it is, is to live within our means and be happy with what we have. Stop wanting more, stop using credit, use saving accounts instead.

I mean, I take a look around my house (doing it right now) and I see that we have most things we need. And some things that we just love and want, but Hubby and I have tried to change. We were already haters of waste, lovers of recycling and reusing, we've upped that somewhat and have decided firmly that we don't always need 'new', that we can be quite happy with 'not-so-new', 'used' or even 'downright old'. The only prerequisite we make now when buying something for the house or ourselves or kids is;

1. Do we like or need it?
2. Can we afford it?

Fashion, trends, age .. none of that comes into it at all really. We save money, we don't use credit and we've tried to stop always wanting more. Or bigger. Or newer. Or in some other way, better than what we already have. I love the jumbled, ecclectic affect it has on the look of our home too. I never wanted a home that had a certain 'style', full of all the latest trends in interiors. Looking the same as everyone elses.

Hubby's become a 'fixer' too. Rather try and fix something, or take it for repair before trading it in for a new model. Buy something, and use it to the end of it's life.

We even joined Freecycle!

But ... we still talk often about our 'wants', and then try and make plans to save up for them. Gadgets and Gizmos (SO want an iPad), new clothing, cars, even house purchases.

We talk about credit, store cards and gym membership almost in the same sentance as we talk about having a savings jar for our coins. Clearly we're confused.

But then what the advertisers and vendors of such things of course want, is for us to keep wanting and buying new things. And the creditors would love us to not be able to afford it, so we take out loans and use credit cards instead.

Those wiley advertisers, shall we all try and ignore them? They're downright sneaky. I was watching a toilet cleaner TV advert the other day, you'd think toilet cleaner would be innocent enough hey?

Pretty normal, average house.
Nope, nothing special.

But, lo and behold, for some reason the advertisers decided to set their story, of a troubled yet everyday housewife (just one of us gals) with troublesome toilet stains in a Dynasty stylee blooming great big WHITE MANSION! Her bathroom was as big as my whole house, this 'everyday ordinary housewife'.

Talk about making me feel inferior. Talk about making me want a blooming great big WHITE MANSION for starters, sod the toilet cleaner.

I think it's time for me to suggest, and then try and follow - my own advice.

Turn off the TV, look away from the newspaper, magazine and billboard ads and images and take a check with what's real. Be happy with what you have, and try and remember that the important things, the things we really need, we should all be able to afford.

Did anyone else change their spending ways during/after the recession?