The Importance of Financial Mindfulness during a Pandemic

The purple campaign 2020

June 15th is the day dedicated to the practice of financial mindfulness. It is a day to either start or continue to be a conscious consumer and make choices that will empower our financial and mental health. For the past 5 years, June 15th has been dedicated and promoted as a day to reflect on what really motivates our spending. This year, things are different. The pandemic has compelled us to STOP. It has made the Purple Campaign, recommendation of STOP, QUESTION, then DECIDE a reality. Covid-19 is pervasive and devastating not only to our health, but also our financial livelihood.

This pandemic has touched everyone. Some are coping better than others. We are all caught in the same storm, but not all of us live in brick houses. The pandemic has viscerally exposed the inequalities, the shortcomings, and it has highlighted the role that consumers have to play in the economy. Consumption is the engine of economic growth. This year the Purple Campaign takes on more significance because the level of consumption we choose, affects not only our individual financial status, it also affects the financial status of the businesses in our community.

This crisis is giving us an opportunity for making changes individually and for society as well. It is as if the pandemic is a dress rehearsal, for us to understand that we can and are able to live, work and consume differently. It has made us deeply appreciate our essential workers, who prior to the pandemic were not given the proper remuneration or respect.

Covid-19, is an inflection point, if we commit to making changes to individual consumption, we can influence how the resources are allocated in our communities.  Consumers have the power to collectively influence how the economy operates. Where and on what you decide to spend will determine which companies and what products continue to be produced and sold. Being a conscious consumer not only benefits the individual, but it can be the catalyst for systemic change in our community. Consumers will determine which businesses are able to survive. Is it going to be the small local business or is it going to be the multinational corporations?  The transformation process is overwhelming, and it is imperative to understand that it will not be easy or fast. It involves collective, consistent, and small daily actions. This is the first step towards a more sustainable and equitable normal.

The pandemic unplugged us from mindless and unconscious consumption. During the pandemic consumers have significantly reduced non-essential spending. The uncertainty about job security and a steady source of income have forced many to really assess their needs versus their wants. In the last two months spending on non-essential items have significantly declined. Moving forward, we must QUESTION whether we can afford to go back to “normal”. We must DECIDE whether we should revert to our pre-pandemic consumption patterns or make permanent some of the positive changes we have made during the pandemic.

The Purple Campaign 2020 is a call to action for those who want change. The decisions we make as the economy reopens, will influence whether we are able to capture the benefits of the positive consumption changes we made during the pandemic.  Keeping in mind the economic uncertainty, here are three suggestions moving forward as the economy reopens:

  • Continue to prioritize needs over wants. Keep nonessential purchases to a minimum and where possible eradicate them altogether in the coming months. The pandemic has taught us that we can live with less than we thought we could. Continue this habit moving forward.
  • Prepare for the worst and expect the best. Adopt the prudence principle in accounting. This principle recognizes expenses and liabilities as soon as they arise and only recognize income when it is received. It’s the accounting equivalent of ‘’Don’t count your chicken before they are hatched”. Operate as though you will have a reduction in income, this will help you to keep on track with prioritizing needs and wants. The result will be higher savings and less debt.
  • Have your end goal in mind. It is easier to reach a destination when we know where we are going. Know your why, and this will keep you working towards your goal. What is the purpose of practicing financial mindfulness and being a conscious consumer? Do you want to reduce debt? Do you want to save more?  Do you want to unplug from the materialistic matrix? Has the pandemic experience made you realize what is important in life? Are you tired of status consumption and keeping up with the Joneses? Do you want peace of mind? Are you trying to make an impact on your community? Knowing what you want to achieve is half the work. The other half is small, daily, consistent actions.

On June 15th, wear purple as a symbol of your commitment to change.

The Purple Campaign 2020

 

Dr. M

http://radhamaharaj.com/

 

Published by Dr. M Finance Blog

http://www.radhamaharaj.com/

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