Wednesday, June 06, 2007

Need vs Want

In a world ruled by the might of the dollar, a mantra is being heard: I don't need it, I don't want it. Claire Harvey tries going without spending power"That", says my brother Adam, "is the most middle-class thing I've ever heard". We are sitting in an Italian cafe eating expensive peasant food, and I've just told Adam about my plan to go for a month without spending money. He rolls his eyes and bites into his pizza.

That is the opening to a fairly lengthy op-ed-confess column published last Saturday in the Herald. And, before going any further let me make my own admission that I have been and am still occasionally guilty of the indiscrete, spur of the moment, “Why DID I buy that” purchase.

In some ways Claire Harvey’s article disappoints as it trundles its way through the middle class angst of self denial and sacrifice. It skims ever so briefly over many of the real issues of the modern consumer society. The author agonises endlessly over the minutiae of not being able to have a coffee at the local with her friends, of making her lunch at home rather than spur of the moment buying from the local cafe, takeaway or sandwich bar. Her wardrobe gets a quick and slightly embarrassed glance with the self-consolation of it being perhaps one of the justifications for her decision to “not spend money”. So the parameters are set...
When I say "without spending", I mean I am allowed to buy basic groceries and fill up the car with petrol, but nothing else. No takeaway food, no barista coffee, no taxis, no visits to restaurants, bars or cafes, no tickets for movies or the theatre, and no buying books, clothes, shoes, magazines or cosmetics. No buying presents for anyone. No haircuts or massages or facials. No fancy booze in bars, no tobacco, no non-essential drugs (pharmaceutical or otherwise). The supermarket is it, but that doesn't mean all supermarket items are OK - there'll be no DVDs or home-laminating machines in my trolley.

But to give credit, Claire Harvey’s conclusion does get close.
Time for my own confession: I've cheated six times during this month by buying that cup of tea, two packets of chewing gum when I was desperate, accepting two cafe freebies, and getting my winter coat drycleaned. The coat was musty and had grubby marks all over the cuffs - real, dedicated misers probably don't buy cream-coloured garments for this very reason.

When it's over, I practically knock over chairs in my rush to get into a cafe. But I can't think of any solid consumer item I really want to buy. In fact, I'd quite like to keep up the frugality for a while if I can - the bank balance is looking satisfyingly healthy. I've saved about $600. Not bad.

So what have I learnt from this? That I like spending money on things that matter but I'd like to be a little more miserly on a permanent basis. From now on, bought coffee should be a treat, not a thrice-daily habit. I've learnt that bringing my lunch from home really is cheaper, and that saving a few dollars really can make a difference. I've also discovered cooking at home can be really cheap but only if cuisine is heavy on the starch and light on the luxuries. Rice and toast might be cheap, but if you enjoy chicken breasts and fresh pomegranates, it's hard to budget under $10 per head, which really isn't any cheaper than takeaway.

But most importantly, this month has reminded me to be a little more mindful of money; saving my cents for the important stuff. I don't just mean mortgages and superannuation - I mean the experiences and items that make everyday life a little sparkly. I don't care how frivolous it sounds, but for me, the joy of life is at least partly in visiting cafes with friends, flying across the Tasman to see my family, seeing movies, going to galleries, buying the occasional gorgeous dress - these are the reasons I work for a living.

I like being part of a society where delightful food and beautiful locally designed clothes are available on every corner, and I'm happy to pay for that privilege. If we all stopped spending to start Compacting, this would be a much less interesting place to be. It's just a matter of finding the point where "I need" meets "I want". As long as the general flavour of life is more Italian parmesan than wet turmeric, I'll be happy.

Now that highlighted second-last sentence really is the nub. For someone like myself, and I suspect Harvey as well, the self satisfaction of middle class security with most if not all of the “modern necessities” such as house, private transport and children paid off would make the denial of luxury an attainable goal compared with the struggle of “the poor” to provide the very basics.
But the point of this exercise is not to save money, not really. The point is to get out of the habit of constantly thinking about buying, spending, having. If I were trying to live on the dole ($178.49 a week for a childless beneficiary, since you asked), I'd be constantly wondering, "What can I afford to get today?" This way, I just have to accept I can't afford to get anything. Money is no object, as Hugh Hefner might say. The difference is he gets to put his arm around a very expensive rabbit while he says it.

For the first time, I understand what it must be like to be significantly poorer than your friends. Being poor (or frugal) is fine if everyone in your social circle is doing the same, but how tedious it must be if your friends accelerate to ludicrous new levels of lucre. Oh, I'd love to come out to dinner, but I might just have the garlic bread ... sorry, I can't get away to come skiing that weekend.

... really does miss the point by more than just a little.

Perhaps had she been looking at the decision to pay a utility account – let’s say for electricity – so that one week’s food must last for the next three weeks, it would have had a greater impact. That is the reality that a goodly proportion of people have to face.

For while that is the side of Harvey’s piece that is missing, it is quite coincidentally an aspect that has been extremely prominent in local (and apparently international) news over the past week.

It has been (for as long as I can remember) standard practice for supply utilities – the obvious ones being water, electricity and gas – to disconnect supply if a customer has not paid outstanding accounts. My first direct involvement was with water supply, through the Borough Council where I was head of finance. Reasons for non-payment ranged from the bloody-minded landlord who would disconnect the supply himself (to get rid of unwanted tenants) were it not illegal for him to do it, to the little old grandmother who was getting a bit muddly and had no one to take care of her money for her, to the struggling family of six (very likely the unwanted tenants) with the parents working a 60 to 80 hour week between them on minimum adult wage rates to survive.

It is into this last category that the quite tragic case of Folole Muliaga falls. She, her husband, her family, owed something like $170 for electricity. The supply was disconnected by the utility company. Mrs Muliaga died some short while later.

Those are the very bare, non-judgemental, dispassionate bones of what happened. There is a very great deal more that can be added; some conflicting, some disputed, some just downright wrong. With there being at least three enquiries, including police, under way there is some prospect that the truth might emerge in the future.

Everyone, from Auntie Helen on down to the ol’ probligo, seems to have an opinion on the rights and wrongs of what has happened. I am not going to discuss this aspect here as I prefer to have fact rather than speculation to hand. Certainly there seems to have been failure at just about every point in the “system” where humans are involved. Pointing bones at any individual involved is meaningless at this stage. Even Auntie Helen’s undertaking to “make the current guidelines as set down, mandatory” rings about as tunefully as my gout ridden knee when I collide with the end of the coffee table.

So now we have the whole country (other than those who are busy stuffing books in the seat of their trousers) giving all of the good advice they can think of. Contributions range from Mother Jeanette proposing “graduated pricing” for electricity – the poor pay less than the rich - to Jonkey and his cohorts suggesting that the true solution to expensive power is to build a number of very expensive power stations to create an oversupply in the market hence forcing down prices.

The very big pity amongst all of which is that it is going to make very little difference in the long run. Auntie Helen has this morning been mouthpiecing the latest variation on her theme of “mandatory guidelines”; this time the tune is along the lines of utility companies having to refer “people who are having difficulty paying their bills” to one or another of the various social agencies that like to be so involved. That might help. The emphasis is on the “might”. Having been involved in providing budgeting advice to people in financial strife I know just how difficult it can be to get across the idea that this week’s wage packet has to pay for more than smokes, some food and perhaps an afternoon in the boozer. It is even more frustrating when you get a client with $150 in the bank at the end of the month for electricity and school fees. The next week it has disappeared – “Oh, we got this special deal...”.

In the meantime, my mailbox this morning is jammed with a half inch thick wad of paper. All of it is advertising from three retailers offering me “special deals” on everything from 42” tv screens at $5,000, dishwashers at $1,200 upward, and cooking pots at $19.99. Any purchase over $500 qualifies me for 12 month interest-free credit; “approval guaranteed”.

Yeah, right!

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