As the U.S. economy careens toward that big cliff called Recession, there's a scramble to understand just how we got into this predicament. The theories abound: The banks lent too much. People spent too much. Total consumer indebtedness is $2.5 trillion1, and according to a recent Congressional report, the total cost of the wars in the Middle East are expected to exceed $3.5 trillion over the next ten years2. Someone clearly fell asleep at the wheel.
But while we sit with our morning coffee and a newspaper pointing our finger at one or more of these culprits, we fail to realize that three fingers are pointing back at us, and the real challenge is to find out where we're asleep at the wheel.
As a twenty-year veteran of yoga and meditation as well as a Certified Financial Planner®, I am called upon to constantly look for what is unconscious within myself, as well as my clients. And what I notice in this time of great uncertainty and fear, is that we are mostly unconscious of what's been driving our excessive spending and indebtedness, and what to do about it now that we're waking up, just before we approach the guardrail.
You'll Never Have Enough
What fuels most people's desires for newer, better, and faster is what the Buddhists call the Wanting Mind. All beings in nature have a biological imperative to survive. Without this imperative, they die. Nothing in modern society is as closely tied to our survival as money. Is it any surprise that when we find ourselves wanting to buy a new pair of jeans, a portable DVD player, or a vacation we've been longing for, we exclaim, "I've just got to have it!" as though our very survival depended on that one purchase?
Free Money
The usual braking mechanisms on our unfettered desire include our limited disposable incomes, a lack of available cash, and the occasional decline in the value of our houses, stocks and mutual funds. But for the last several years, the American economy and those who participate in it have had the luxury of borrowing money at uncommonly low rates, watching the prices of most electronics, clothing, and air-travel fall dramatically, and enjoying a virtually unblemished rise in the value of their homes, 401k's, and other investments.
Combine the availability of what we came to perceive as virtually free money with Madison Avenue's barrage of messages saying "you can have it all, now, and you'll be happier too!" and you have the recipe for everything from the subprime crisis to the collapse of Bear Stearns, the fifth largest investment bank in the country, including financial calamity for its many hard-working and well-meaning employees.
We see this same phenomenon in other people who have sudden inflows of money as well. 33% of lottery winners file bankruptcy at some point after their jackpot, and 78% of NFL players are unemployed, divorced, or bankrupt within two years of their last game.
Getting Back On Track
In yoga practice, when you overstretch one part of the body, you usually pay the price in another joint, tendon, or muscle. When you're injured, an astute teacher will direct your attention to the larger joint which is 'upstream' of the injured area. So if your elbow is suffering, you're very likely misusing your shoulder or upper back. If your knee is aching, the roots of your pain can often be located in a flaccid thigh muscle, an overly-flexible hip, or just a plain lack of core abdominal strength. Our economy is no different. The muscle which appears broken right now is the credit market, and by extension, the stock market and real estate values. But the true culprit is our own overconsumption.
To survive this recession together, we must individually become aware of the insatiability of our own Wanting Minds, that part of us which can never have enough. But awareness alone isn't enough. As you go through your day, see if you can identify and let go of just one impulse of wanting. For example, you might long for the European sports sedan sparkling down at you from the roadside billboard, or long for a weekend getaway to escape the weather. Instead of rushing out to satiate this impulse, create a noticeable pause between sensing your want and taking action on it. This pause may create a small wave of grief or regret. "But, but, but . . . ," your Wanting Mind might object. But allow one of these cravings to go unfed each day, and you'll begin to notice a sizable difference in both your pocketbook and the stability of your contentment.
I'm Going To Lose It All
At times like these, even the most self-aware among us can have a difficult time coping with the vagaries of the economy--to the point where we may want to abandon a sound investment strategy or run out and engage in some retail therapy. Money is so closely tied to survival that our fears get blown out of proportion where personal finances are concerned. Instead of immediately acting on your tried-and-true methods of getting relief, look inside and name the feelings you're hoping to get relief from. Ask yourself whether your plan will actually create lasting relief or is just a temporary band-aid.
And if the feelings are very intense, make sure you wait until the emotional storm has passed before you make major changes. If you wait a few days and the feelings are not changing, then share your plan with a neutral party to make sure you're not unconsciously setting yourself up for more anguish in the future. Remember, no matter how bad your situation is, it's highly unlikely that it's about to lead to your death, even if your feelings are as severe as if it were! By turning our attention to our own motivations with money, we can, one by one, turn the tide of our impulsivehabits. In so doing, we can bring more sustainability and sanity to the economy as a whole.