What does the financial crisis mean to you? Today, Alpha Consumer is launching a series on what the year's financial crisis—the stock market crash, the credit crunch, and rising unemployment rate—means to consumers. I'm kicking things off with the blog entry below, but I'd like to hear from you. How have you been affected? Has it caused you to alter your plans or lifestyle? E-mail me your thoughts at email@example.com and I'll post them in regular installments.
Re-watching Far and Away—the 1992 movie about Irish immigrants starring Nicole Kidman and Tom Cruise—over the weekend made me realize just how materially rich our lives have become. In the movie, the main characters share a room in a tenement as they struggle to make ends meet. They wash their own clothes, barely eat, and work all day in a chicken factory. And for a period, at least, Tom Cruise's character, a former farmer in Ireland, feels proud of being able to afford such a life.
Compare that to the characters in most television shows set in 2008: The Real Housewives of Orange County, New York City, and Atlanta have enough money for face lifts, mansions, and full-time nannies. Dr. 90210 features the bling-filled lives of Beverly Hills plastic surgeons. The CW's re-launch of the original 90210 highlights teens from that same affluent ZIP code, where new cars and Chanel earrings are de rigeur.
If watching shows about sex can make teen viewers more likely to become pregnant, then perhaps watching shows about money-soaked lives can make us more materialistic. I know that my standards—my expectations, really, about what I should be able to afford—exceed my income. I think I should be able to buy a house in a nice neighborhood, furnish it with Pottery Barn couches and tables, and take off for a Caribbean island at least once a year. But I can't.
That's why Far and Away served as such a wake up call. It made me ask: Why do I think I should be able to live the life of the wealthy? I think it might be because I'm surrounded by such lives, every night, through my television.
For me, the financial crisis has spurred a re-evaluation of my expectations. Does it really matter if we rent the same one-bedroom apartment for five more years? Will it cut into our happiness if we skip next year's vacation and keep our old futon—from grad school days—around a little longer?
Instead of material goods, I've found more frugal ways of feeling like I'm indulging. I've retreated to my kitchen, where I make the kind of meals that I wouldn't have thought myself capable of a few years ago. Investing in my cooking skills gives the kind of returns I can count on, unlike investing in the stock market. I've also upgraded a few things around our small apartment, such as nicer sheets and rugs, so it doesn't feel like we are living penuriously. While I admire the Far and Away characters, I certainly don't envy their poverty.
Meanwhile, my husband and I have put off buying a home. While prices have come down a bit, the economy just feels a bit too uncertain for us to commit to a mortgage. Instead, we're using our down payment money as an emergency fund as we try to cut costs.
I hope we look back on this time and think that it built up our characters—that it reminded us to stop lusting after lifestyles of the rich and famous. Because being grateful is a much more fulfilling feeling than envy.
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