Tag Archives: savings

Refocusing on a Home Based Economy

2009 seems like a long away.  It’s has been “just” eight years, but as Donald Trump continues to be an international embarrassment on a daily basis it makes me wonder about those halcyon days when we waited for Barack Obama to take the oath of office.

2008 was a bear for a lot of people.  The economy literally seemed like it was going off the rails completely and no one had any idea how to fix things.  It turns out the “masters of the universe” in the high finance world had figured out a way to spread the risk and damage from low-grade securitized mortgage loans to almost every aspect of the American economy.  Amazingly, this contagion also spread to the global economy because as much as closed minded right wingers would like to believe the world is not interconnected globalization is a fact of life.

The buzzwords in the winter of 2008 and into 2009 were things like urban homesteading, frugality, DIY, canning, etc.  You get the idea.  We were collectively abandoning a consumer lifestyle focused on buying a plasma television a few inches bigger than the perfectly fine working plasma television in the basement of our home that was half again as big as we needed.  We were all wondering if maybe we had lost something in the pursuit of more square footage, solid surface countertops, nine foot ceilings, and crown molding.  Well, how times have changed.

Or has it?

After eight decent years of economic recovery, which has been uneven and much slower than prior economic recoveries, experts are beginning to wonder if the new era of Trump will also coincide with a recession.  Despite the major stock indices hitting new highs on a seemingly daily basis there is ample evidence that maybe there is just a little gas left in the tank and recession is waiting on the doorstep.

What to do?

My solution is to turn inward and focus on a home based economy.  It’s sort of in line with my theory that the most subversive thing that we can do is nothing.  [LINK]  By focusing our efforts inside of our homes the emphasis is no longer necessarily on the things we buy to consume.  It is inward facing and not concerned with external judgment.

Maybe it is about mindfulness.  Maybe it is about frugality.  Maybe it is about all of those things that we pay lip service to in conversation but forget to act upon the minute we get an email touting the latest sale at REI.  I am as guilty of this behavior as anyone else and it is the single thing that I am trying to break myself from over the course of the next few months.  It is my hope that by focusing on the economy of the home that I will slowly begin to break my own cycle of consumerism.  In the process I hope to solidify household finances and achieve some measure of greater satisfaction.

That sounds great, but what does it mean in practice?

Take a look at the image below:

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This is for the average “consumer unit,” so in reality you will spend more or less on items as your personal circumstances dictate, e.g. I do not smoke so I do not spend $323 per year on tobacco.  However, as a thought exercise it gets you to think about where you spend your money.

It’s easy to key in on the largest single unit related to “housing.”  Yet, for most of us our housing situation is somewhat inflexible because we have a mortgage, lease, etc.  It is easy for some blogger to scream “downsize” but the costs associated with that may actually make the option prohibitive.

Now, look at some of the other categories.  Transportation eats up the next largest portion.  Well, if you start basing your life around your home you will probably drive a lot less.  Trust me, once I started thinking about every mile driven being $0.50 tossed out the window I began to think about every trip I took by car and how I could reduce those miles.  Stay at home and you do not spend the money on transportation.  Yes, you will still spend money on insurance and tags for your vehicle but every mile not driven is less you spend on fuel and maintenance.

Food is the third largest contributor and another place where a home based philosophy can really make a difference.  Modern Americans spend a smaller share of their income on food than at any other time in the country’s history yet we still spend a lot of money both in and out of the home.  Plus, we throw away a lot of food.

The common thread throughout is by focusing on living a frugal life at home the expenses in a lot of these categories can be ameliorated.  If you are buying less stuff you are spending less money and producing fewer carbon emissions.  Like I said earlier the greenest thing you can do is nothing.

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The Most Subversive Thing You Can Do Is…

Nothing.

Wait, what?  Nothing?

Yes, that is right, do nothing.  I do not mean do nothing in a political or activist sense.  Good lord no, please make sure that your elected representatives know very clearly what you think of their behavior in office and how that is going to make you vote in 2018.  Make their lives unpleasant by actually showing up to their town hall meetings—assuming they actually schedule town halls in their districts unlike Rod Blum—and let them know how displeased you are with their proposed legislation and Donald Trump.

When I say do nothing I mean stop participating in the consumer driven shell game.  Our consumption of stuff just feeds the beast.  We can rail against the political machine in Washington D.C. as much as we want but as long as we are filling our shopping carts the wheel will keep on spinning.

Do you think Exxon Mobil really cares about protests?  Not really.  They would care however if a measurable percentage of their customers stopped buying gasoline because they were commuting by bike.  How many?  Enough to flatten their growth curve and cause investors to panic.  Looking at the current state of oil markets a drop in demand of 5-10% is enough to cause major perturbations in price.  Could you reduce your personal consumption of gasoline by 5-10%?  Heck, all of us could probably do that without thinking.  No one is saying that you need to stop driving entirely, just reduce it by 5-10%.  The upside is that it costs nothing to do less driving.

Do you think WalMart really cares about anything other than its quarter versus quarter results?  Not really.  However, given that the counties that supported Hillary Clinton account for ~64% of the nation’s GDP if those voters were to stop patronizing WalMart the results would be staggering.  Remember, the game is now about growth and if companies cannot show a path toward growth the market will punish them.  Look at coal companies.  Once these companies could no longer show a clear path to growth, never mind declines in demand, the market punished the companies by withholding capital and the coal companies began declaring bankruptcy.  It costs nothing to not shop at WalMart.

Political activists constantly harp on us to “vote with our wallets,” but it is much more effective to vote by not opening our wallets.  Just shifting our spending from one faceless corporation to another is not going to create any kind of meaningful change.  If over a short period of time there was a measurable decline in consumer demand for stuff you would see some real change.  Granted, Republicans would probably start trying to pass legislation that guaranteed WalMart a certain amount of income because they love welfare when it is for corporations.

Doing nothing when it comes to consumerism is subversive because it goes against the dominant paradigm in modern America.  Heck, when we were facing the greatest existential threat to the United States in a generation George W. Bush implored us to go out and shop.  A stirring call to action this was not, but it does represent what passes for action in the minds of modern politicians.

Step back from the cash register and do nothing.  Put that book down and check out something from your public library.  Avoid that trip to the mall and see what unused items lurk in your closet that would be better served as a donation to the Salvation Army.  Resist the urge to go out for dinner and be truly revolutionary by cooking dinner for a group of people.  Heck, that may be the most revolutionary thing you could do because nothing smacks of “commie socialism” like sharing a meal with a group of people and expecting nothing return save for good conversation.  I can read the tweets from Donald Trump already “Sad.  Dinner without tableside service so un-American.  Mar-a-Lago will always be tremendous.”