Don’t waste a crisis

Rahm Emmanuel, former Chief of Staff to Barack Obama, once said “You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things that you think you could not do before.”

We mustn’t ignore the severe economic hardship being suffered by too many at this time. But for those of us who remain employed, lockdown provides a unique experiment: surviving without things we considered essential just a few weeks ago.

A chance to find out what you really value

Many of us are finding the enforced social isolation has significantly reduced our expenditure. We can no longer buy our morning coffee and pastry. We’re making our own lunch instead of buying it in Pret à Manger. We’re not going to restaurants, the pub, or cinema. We’re receiving refunds for flights and holidays booked over Easter. We’re no longer going leisure shopping for clothes, handbags, shoes or gadgets. This can amount to hundreds of pounds per month.

We could simply fall into reinstating these expenditures when we come out of lock down. Many of the providers are hoping we will: Sky and my gym have suspended monthly payments so that I don’t cancel these subscriptions, leaving them with the right to restart them when they reopen. Airlines are trying to direct us towards rebooking rather than refunds. But what if we looked at things a different way and consciously asked ourselves what this spending did for us, and actively chose whether to switch it back on?

When spending has become habitual, it is too easy to convince ourselves that a luxury is a necessity. But when an expenditure has been taken away, we have a unique chance to assess its importance to us with greater honesty. So here’s an exercise for you to try.

Reviewing your expenditure

Take the time to review your expenditure since lock-down and compare it with the previous 6 to 12 months. What are the expenses that have disappeared or reduced substantially and what are the corresponding things or experiences you’ve lost? List them and quantify them in terms of £ per month and ask yourself three questions about each.

Has the loss of this item:

  1. Caused me identifiable physical or mental harm – i.e. is it essential?
  2. Led to a noticeable reduction in my fulfilment and life satisfaction? 
  3. Impaired my ability to live my life in accordance with my most deeply held values?

If the answer to these three questions is ‘no’ then how about resolving to do without that item of expenditure for at least one month after lock down. You can always restart it later if you change your mind. But see how you get on – just maybe you’ll get used to living without it. 

In this way you can use this period actively to challenge your discretionary spending, identify what you’ve really missed and value, and what you can really do without. You may find all that expenditure wasn’t so essential after all.

That’s what I call not wasting a crisis.

You can read more from Tom at The Gosling Factor