In Debt we trust

Sep 162008

I have just watched the documentary “In debt we Trust”. This documentary was by a guy called Danny Schechter. I highly recommend that you watch it. The documentary covers all aspects of the debt market and how it came about. Some parts of it were a real eye opener for me, I’m sure you will think the same.

The really fascinating thing about this documentary is that it was recorded in 2005. In the documentary they discuss the subprime borrowing that was becoming very popular at the time. Some of the people that were interviewed make the comment that there we were heading for a crash. Very prophetic in their predictions given what has happened with the credit crunch in the last year or so.

Some people will say that the writing was on the wall, they will argue that the level of borrowing and personal debt that people took on could was simply too much and could not go on. To be honest I think that while the writing was on the wall if you cared to look, many people were too caught up in their own financial problems to look at the bigger picture. So there is no value to be had from saying “I told you so”.

Most people operate in their own little bubble, very few actually look beyond their own situation out on to the wider world to see what is happening and how it could effect them. Why should they? If you think about it, if I have enough income to pay my bills then why should I worry about other people’s financial problems? Even if I have a lot of debt I still won’t be worried about other people’s problems as I will be too busy and too focused on trying to solve my own problems.

Big picture

The real reason why it is important to keep an eye on the big picture, which in this case would be the economy, is that the big picture can very quickly become the small picture. Things like oil prices and interest rates have an effect on everyone – no one is immune.

Debt servitude

The other key thing that I got from the documentary was that we are now entering into an era of debt servitude or debt slavery where we are enslaved by our debts. Recent changes to the legislation regarding bankruptcy makes it hard to eliminate debts via bankruptcy. The net effect is that your debts continue to haunt you long after you thought you have go rid of them through bankruptcy.

Slightly depressing

Overall I found the documentary slightly depressing. It was very interesting but there was very little offered in the way of hope or advice. The two things that stuck out for me in terms of the advice offered were to cut advertising out of your life and to join a credit union. Both of which I think are great pieces of advice. I have written about going on a media diet in a previous post which you can read about here. Media diet – useful in slimming down your debt?

We need more documentaries like this to raise people’s awareness about debt. There is no point in suffering alone and in silence. There are things that can be done to help people in debt and the more people that know about what can be done then the better it is for all of us.

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Media Diet – follow up

Aug 122008

A couple of months ago I wrote a post about the impact that media has on our spending. The constant bombardment of seductive adverts for the latest gadget would drive anyone to use their plastic. I know I’m not alone when I say that more than once I have been duped into buying something I didn’t need by slick advertising. This in turn has often blown a large hole in my budget.

Anyway in that post – which you can read here – I explained that I was toying with the idea of going on a media diet. The thought of reduced stress and anxiety coupled with more time and mental capacity seriously appealed to me.

If I’m honest the results of my media diet were very mixed.

I think its best if I break down each media channel so I can explain what happened.

Internet.

I use the internet a lot for my job and for this Blog. I find that a lot of the time when I am on browsing the web that I have lots of websites opened. The thing is none of these websites relate to each other. I could have a finance website open while at the same time I could have a sports website. My brain has problems processing the unrelated pieces of information at the same time.

The net effect of having all these websites open was that during the day my thoughts became scattered. To combat this and help me reduce the amount of time I spend on the internet I downloaded a free trial version of a website blocker software. I then loaded the details of my favorite websites into it.

Every time I tried to log on to my favorite websites I got a “page cannot be displayed” message. Initially this was very frustrating but eventually I did lose a lot of interest in those websites and my productivity did improve…for a while at least.

TV.

I mentioned in my last post about a Media Diet that I recorded all my favorite TV shows and watched them all in one go at the weekend. When I was watching them I would simply skip the ad breaks.

This had a big impact. It freed up a lot of time in the evenings as my evening was no longer centred on a TV show.

I did find that when people that I work with were talking about the previous evenings TV shows that I felt a little left out. Small price to pay I reckon.

Newspapers.

I stopped reading the daily newspapers – most of them I read online anyway so I simply blocked their websites. At the weekend I would buy one of the Sunday broadsheets. These usually give a good overview of the weeks events.

All this was shaping up nicely and for a couple of weeks I was seriously reducing my exposure to the media. The thing was that after the initial period my enthusiasm began to wane. By having my favorite websites blocked I felt that I was missing out. Missing out on what I’m not sure but I just felt that I was isolating myself in some way.

One by one I removed the block on the websites so that I could access them ‘just this one time’. I don’t feel isolated anymore and I am up to date with all the current affairs and sports results but at the same time my media exposure is right back where it was when I started this exercise. I have even fallen back into the habit of watching my favorite TV shows in the evenings instead of at the weekends. Not good.

When I am trying to be productive – either at work or trying to write this Blog – I’m back in the habit of jumping from website to website and back to writing. This leads to incredible frustration as I know what I am doing wrong but I am finding it hard to break this habit.

But Mike – what were you trying to achieve anyway?

It was easy to lose sight of the original reason for going on a media diet. My prime motivation was to reduce the negative influence of the media on my bank balance. Simple as that. As a side benefit I was hoping that my productivity would increase as a direct result of my free time.

While now it looks like my media diet was unsuccessful in a way I have achieved what I originally intended to do. Now I find that whenever I am confronted with a purchase I ask myself how much of my purchasing decision was influenced by the media. I probably won’t ever be able to give an accurate answer but at least it gets me thinking about my buying behavior.

No longer do I go blindly about my shopping. Often I find myself asking the question “Is this generic product as good as a branded one?” To me this is what going on a media diet is all about.

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Media diet - useful in helping to slim down your debt?

Jun 272008

Nine hours a day.

That’s how long it is estimated that the average person is exposed to media. That’s nine hours a day where you are either watching TV, listening to the radio, online or reading newspapers/magazines. That’s nine hours a day that you are being constantly bombarded with advertisements urging you to buy something that is bigger, brighter and better than what you already have. That’s nine hours a day that you are being made to feel inferior by those smart advertising people.

We take our daily exposure to media for granted. We don’t even think twice about it. But when you do stop to look at what is being repeated constantly on the TV or on the internet you come to notice that it’s pretty much all doom and gloom. Even on a good day the news is always bad. From a mental health perspective this can’t be good. To me listening to bad news all day and being exposed to advertising does to the brain what constantly drinking soda does to the body.

Yet I am the first to admit that my exposure to media on a daily basis used to extend to a lot longer than nine hours. I estimate the figure to be closer to thirteen hours. I’m a media junky or I was until very recently.

A few months back I started to record my favourite TV shows. The reason was because I was too busy with work to watch them. As a result I would end up watching my favourite TV shows at the weekend except there would be no advertisements I would simply fast forward through the ad breaks. I stopped watching the news – again because I was too busy. I seriously cut down on my online browsing of websites. The net effect was that for a couple of weeks my exposure to the media had decreased from about thirteen hours a day to about five.

Then a strange thing happened.

I no longer had that panicky feeling when I was stuck in traffic on my way to work. That silent urge to get to my desk and see what had happened in the hour since I last was at a computer. I had a feeling of liberation. It was short lived but it gave me a glimpse of what could be achieved if I made a determined effort to cut down on my media consumption. It got me thinking about this blog and about debt and about how we are influenced by the things we see in the media.

I estimate that the impact that the media has on debt and spending habits is huge. It makes sense if you think about it. The more you are exposed to the adverts for “the good life” the more you will want to have the good life – no harm in wanting the good life – but when you are using debt to fund it then it can become a problem.

Realistically it will be almost impossible to cut all media out of your life. Short of living in a cave you are going to find it very hard to do. However there are some serious benefits to be had by cutting down on the amount of time you are exposed to TV, the internet etc.

Going on a media diet will serve two purposes

Firstly it will help reduce exposure to advertising which in turn will in turn reduce the amount of reinforcing messages you are exposed to which tell you to buy stuff you don’t even need. One of the fundamental principles of advertising is that the more often a consumer is likely to see an advert the more likely they are to buy the advertised product.

The second benefit is that you will be reducing your exposure to all the negative financial self talk. Have you noticed that there is nothing but doom and gloom in the news about the state of the world economy? How we are all heading for a financial disaster that will rival the depression, nothing but bad economic news. You don’t need to hear it. If you are continually listening to negative ideas about the economy then you will start to believe it is true. If you believe it is true then it will become true. Everywhere you look you will see signs of how bad things are getting. It will become a self fulfilling prophesy.

I’m toying with the idea of going on a media diet. An almost complete shut down of my media consumption. The idea would be that I reduce down all media consumption apart from that needed for my job and for leisure. So I would stop watching the news, I would stop reading the newspapers. I would record TV and skip through the adverts.

Instead I could use the time I currently spend on media to do something much more constructive like calling friends or reading books.

The benefits of going on a media diet are obvious but I still am struggling with the concept of going on one. I think that the media has become such a fundamental part of life, my life, that to remove it would take a lot of energy. Energy that I think I could use focusing on some other area of self improvement.

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