After convincing myself for over a year that handwashing my dishes isn’t bad – and even an opportunity to practice some zen – I’ve given up.  I’m going for a dishwasher.  I’d been eye-ing Danby’s Countertop model and before shelling out the $300 thought I’d do some product review research.

What I found on youtube was the most New-York-ish, what-I-needed-to-know review I’ve ever encountered.  I could only *wish* all reviews were this forthright, funny (headsup: there is one vulgar moment in it part way through) and used the same kind of real terminology (this thingy. WhateverThisIs) you and I use.  My favourite part is when the vacuum cleaner comes into the Danby Dishwasher review.  It is SO what I can imagine myself having to finangle.

And if you don’t laugh at some point … I don’t know what to tell you.

photo credit: Margaret Anne Clarke Creative Commons License

OK, Question for you: Under what conditions do you start to worry about your portfolio?

Sometimes I think reading the financial pages is like reading about which food causes cancer. When I was a kid, anything fake-red, like raspberry jello, was out. Then it was OK after all. Then this, then that … it’s crazy making! So now I just try to eat as “clean” of food as I can (organic, free range, and increasingly less packaged stuff) and don’t worry about what the latest findings are.

As much as I encourage us average Joe/ette Canadians to read the financial papers, I’ve read so many prognostications that shift every few weeks, I’m coming to a similar conclusion about high finance as well.

In today’s Financial Post, for example, I read this:

The swagger in equity markets over the past month evaporated Wednesday as investors in stocks finally succumbed to mounting worries about the economic recovery…
In Toronto, the S&P/TSX composite index fell 256.08 points, or 2.2%, to 11,582.21, its lowest level this month. In the United States, the S&P 500 tumbled 31.59 points, or 2.8%, to close at 1,089.47.

If my entire portfolio drops 2% I do indeed take note. But I don’t make any conclusions about a sea-change in market sentiment. And I don’t feel particularly anxious. I do get anxious if any given company I own has bad news or declining sales. I would get somewhat anxious if there was … maybe about a 5 or 6% overall drop. And I’d freak at about 10-12%. But 2%? I’ll sleep, I guess!

Am I naive? What conditions cause you to stress?

Photo Credit: Dr. H (Creative Commons license)

Most of us have heard of the Seven Deadly Sins. (Pop quiz: see if you can list them!). But the seven virtues? Not so much. I guess a plotline about seven virtues isn’t quite as gripping as the other.

I’ll get to those sins eventually, but today wanted to reflect on an unsung virtue as it relates to money: Temperance.

What place does the word temperance have in our cultural lexicon? Does it have any place at all? And what place does it have in connection to how we handle our money?

I don’t know about you, but it’s not a word I’ve ever used in conversation. It calls to mind bans on alcohol or the name of a Puritans’ daughter (who probably sewed really well).

But I wonder if we wouldn’t be better off – both as a society but more specifically, our bank personal bank accounts! – with reclaiming the word, and more importantly, the notion, in our collective consciousness.

Here’s perhaps a fresh look at the word and what it has to say about our financial life.

Plato looked at it this way: Temperance is used to control the desire to go against one’s free-will. (The Republic 430e) I’m guessing that most readers know, as I have in my bad-old-days, that slightly sick feeling of having over spent despite our better judgment. Not only do we have to deal with the financial consequences, but we also experience a sense of failure at a deeper level.

The Greek/Stoics word for temperance, sophrosyne, includes Soundness of Mind in its meaning. In other words, part of maturing as a human is being not driven (by, say, marketing) but to be guided by our reason in our choices. Many Greeks considered temperance to be integral to wisdom and to a good society.

Likewise, Romans such as Cicero and later Machiavelli understood tempermentia as the antidote to tyranny. A just ruler was a reasonable one, not a capricious one ruled by their mood. Julius Caesar probably practiced temperance; you can bet Nero didn’t.

For both the Greeks and Romans it was not some emasculated character trait to roll our eyes at, but a strength that led to freedom.

The million-dollar question for each of us is: what are the tyrannical forces that exert themselves on our spending? They can be external (society’s expectations, for example) or internal (eg. need to feel good).

And, how can temperance, a higher and stronger force, create freedom for us?

An axiom of sound money management is distinguishing between our wants and our needs. Periodically I ask folks to share their best tips, and invariably this comes up. I’ve always nodded in agreement, yet as I think about it, it’s not nearly so simple.

What defines a want?

What defines a need?

Food is an obvious response as a Need – but even there, what do we mean? Simply ensuring our blood has the right mix of salt, sugar and water? Do we need precisely the optimal mix of nutrients so that we can operate at our peak? Or would less than our peak suffice? And what defines peak for that matter?

Shelter is another obvious response. Again: Do we need to be warm, dry and safe, in which case a good cave might suffice, or do we need a thick carpet, and big windows to let in natural light?

And what about our need for esteem? Do we even agree that it is a need? If so, does that legitimize top-quality, perhaps even designer clothing? A watch or jewelry that signifies we have good taste and invest in ourselves?
This is a personal area of interest for me – I was often conflicted as a money coach: Did I need to sport a great haircut, have well manicured nails and in general be “well heeled” to be taken seriously as someone with a measure of authority on the topic of money?

You see where I’m going with this?

So readers, I’m curious: what criteria do you use to distinguish your wants from your needs?