Be a money player; Stay in control, your eyes on the prize; The Way We Spend

Saul Schwartz of the School of Public Policy and Administration comments on consumer credit spending.

Byline: Meredith Macleod
Publication: Hamilton Spectator
Date: Thursday December 10th, 2009

If technology is making it easier to spend at will, blurring the connection between that new TV and what it’s draining out of your bank account, don’t expect it to get any better.

Wave a fob in front of a gas pump to buy 30 litres or tap a pad to buy a double-double. Chip-embedded credit cards often require no signature. Spending is easier, quicker, less thoughtful.

Experts see purchases made using iPods or even thumbprints or retina scans. Twitter founder Jack Dorsey just unveiled Square, a payment system using your smartphone.

If it’s just going to get easier to spend, how to find self-control?
Amanda Mills, a financial therapist with Loose Change in Toronto, says we have to examine our deep-rooted, subconscious relationship with money. That includes what we learned and observed in childhood.

“Money is a very addictive substance. In some families, it’s about power and control. In others, it was secretive and hidden. In others, it was the only way love was shown.”

One man would never sit down to pay bills because he immediately envisioned sitting in the back of his parents’ car as they went in to sign bankruptcy papers.

Another client refused to save anything because he had watched his family’s belongings be repossessed, and he believed nothing would ever truly be his.

“If people have a good relationship with money, they see it for what it is,” said Mills. “But for others, it’s very complex and deep-rooted …. Money projects part of ourselves we don’t want to acknowledge.”

So, as we wrap up these 13 weeks of The Way We Spend financial makeover, we know we’ve changed the lives of four local families.

The bigger question is: Will the economic misery of the past 14 months have a lasting impact on consumers? Have we learned that we can’t have everything we want when we want it? That it’s dangerous to live beyond our means?

Sadly, most experts we talked to for this series don’t think so.

Credit is so seductive and so entrenched and lenders make too much money doling out loans for things to really change, says Saul Schwartz, a professor of public policy and administration at Carleton University. “In five to 10 years we’ll forget
the lessons of 2008 and we’ll be back to the same cycle.”