It is the festive season and for many of our clients, that means presents. Yes, the ones they receive. But also the ones they give. And giving, for many people, means spending.
This year, why not change things up? Rather than give people items you buy, why not give them something much more precious: your time?
It could be time you spend face to face in conversation with people (or over the phone, Facetime, etc). Or you could invest time to make something, like a cake, or a photo montage, or something that you would ordinarily buy.
Our experience is that our time is the best gift we can give people. They value and appreciate it more than any thing that we could buy them. But we tend not to see ourselves as a potential gift, which is why we suggest that you actually tell your friends and family that your gift this year is time. You could even print vouchers: “this voucher entitles the holder to a bloody good chat.” (And maybe a shoulder massage).
Giving time instead of things will save you money, and this year many of us are looking for ways to do just that. But it will also help you slow down. What we are seeing as this year ends is that many people are simply exhausted. The last three years have taken their toll and people need to recharge. Taking time to relax and just be with our loved ones is one of the best ways to get our energy back.
Friends and family will love the gift of our time. And it will do us the world of good as well.
But that’s not all. Giving time rather than things is also what the whole country needs. It’s the patriotic thing to do!
You will know that inflation has risen during 2022. In response, the RBA has been madly raising interest rates because they think this will reduce inflation. It may, but it is worth remembering the mechanism through which interest rates reduce inflation.
When interest rates increase, people with debt have to make increased interest payments to their lenders. That means that borrowers have less money available to spend on ‘everything else.’ This is supposed to reduce spending on everything else, which in turn means there is less pressure put on prices in the general economy. Higher interest rates are intended to reduce spending.
(Higher rates also reduce new borrowing, especially by businesses, which slows economic activity. But that is beyond the scope of what we are talking about here).
So, the RBA’s response to inflation is to discourage spending, by taking away some of the money that we would potentially use to spend. Our idea for this festive season is to act as if interest rates have risen further already and reduce our spending voluntarily. That will obviously save us money. It may also make inflation just that little bit less than it would have been. Who knows, it could even stave off the next interest rate rise!
Regardless of whether you decide to take our advice and give time instead of spending, we hope that this festive season is all that you hope for, and that we see you again in 2023 looking fresh and relaxed. Thanks for your support in 2022.
Stay safe and we will see you next year!