Money Talk: here’s to a better relationship

Let’s start with some data

Look away now if you’re not ready for a few harsh home truths about money and society…

  • UK household finances have slumped from being among the most solvent in the world in the 1990s to being among the most indebted of all developed countries
  • The Office of National Statistics (ONS) estimates the UK consumer credit bubble to be £205bn (that’s higher than 2008); Price Waterhouse Cooper the accountancy firm puts it at more like £300bn
  • In 2017, UK household finances were in deficit for the first time since 1980
  • The ONS estimated a shortfall of £25bn between what came in, and what went out. This was mostly paid for with borrowed money (second was by running down savings)
  • £80bn was taken in loans in 2017, the most in a decade; the value of deposits into UK banks was £37bn, the lowest amount since 2011
  • And over 600,000 people a year now contact the charity Step Change for debt advice

Feeling cheerful? Upbeat? I’m guessing not. But if you looked at the world of debt marketing, it’s all easy, spontaneous fun. Fashion delivered free. Go where life takes you. Smoothing out payments. Straight talking money (*terms and conditions apply). A world of adventure, impulse holidays, bright colours, new clothes and great parties.

Now not every loan ends in tears. But given what we know about the bigger picture – a country kicking the recession can down the road via unsecured lending – why is it that debt products have a monopoly on aspiration and the enjoyment of life?

There’s a bigger conversation to be had about the right structure and incentives to help us save more easily: watch this space. This post is more about the language of money, because it frames the way we behave with it.

Unlike the glamorous, exciting, frictionless world of getting yourself into debt, the world of being smart with money has somehow ended up with a vocabulary about as attractive as bowl of cold porridge. Thrifty, prudent, careful, frugal. Or just plain old ‘tight’. The user imagery isn’t great is it? We ‘squirrel’ money away. Sign me up for a savings plan, it’ll boost my Tinder profile.

Other countries don’t always default to this language of fear and avarice to describe people who are productive with cash. ‘Sparsam’ in German might most easily translate to our ‘thrifty’, but it’s connected with ‘sparen’ meaning save, and has a constructive sense of conserving your resources. Or ‘achtsam’, meaning something like ‘mindful’ – a word you’re more likely to hear in a yoga class or your headspace app over here. There’s a thread of grown up, strategic intelligence in this vocabulary. The Japanese describe people as ‘setsuyaku jouzu’, ‘good savers’; the interesting bit is that that jouzu can be applied to any kind of talent. You can be jouzu at tennis, or cooking, or singing; saving is a skill or talent like any other.

There are plenty of words we might use for a more positive vocabulary of cash management. On top. Money-smart. Making it work. Stress free. In control. Here’s to happier money.