The general price level in Finland rose by 7.8 percent year-on-year during the month of July. The last time Finland's inflation rate was at a similar level was during the 1980s. The latest increase follows a general trend of inflation being accelerated by the lasting economic effects of Russia's invasion of Ukraine. source
Sure, the inflation rate is being accelerated by the war in Ukraine, but I am yet to see any adequate mentions of the cause of inflation - economic mismanagement at the grandest of scales.
In July, according to Statistics Finland, the biggest increase in consumer prices compared to a year ago was the increase in the cost of electricity, petrol, diesel and renovations of single-family homes.
I don't drive much, but that last one is definitely having an impact. For example, the cost of the ceiling panels that we bought last year and will finish the kitchen and office with, have increased by a "paltry" 65%. The cost of basic structural wood has increased even more, as to has gyproc sheeting, in some cases, by 200%.
I am glad these are the last two rooms for now.
Next "house" thing would be the basement, but in order to heat and finish that, it is likely going to take around €100K - so it is not on the near-term agenda.
Come on crypto.
While we are sinking a fair amount into this house, we are doing our best not to over capitalize on it and, we are trying our best not to take on any more debt burden. With such large amounts at specific times, it has been hard, but we have managed to spread the purchasing out over the last year and contain our lifestyle somewhat in order to enable it. While a lot of people don't mind holding debt (especially when the interest was lower), I am still a bit "old school" and don't like the risk of it. It frustrates me that I still have a credit card debt, but it is quite small now, so I will be glad when it is soon paid off.
"Financial mismanagement"
Yes, the governments are guilty of it, as are the central banks, but at least for me, I am not innocent in the part I have played in my own economic circumstances. If I could go back in time, I would do a million things differently and have several million euros to show for it, but my own naivety, incompetence, financial illiteracy, impulse control and instant gratification mentality also may have played a "minor" role in the outcomes.
I definitely don't come from a family that led by example on financial hygiene and best practices and instead, it was quite the opposite. So, while I knew that I needed to do differently, I didn't know what that "different" would be and I didn't have the right internal motivation to find out for myself. While I might have been a victim of poor economic conditions in the home, I was a victim of my own actions outside of it too.
Self-inflicted financial pain
These patterns aren't elementary to change. At least in practice. For me, the pathway has been long and the struggle constant, as my own behaviors are engrained and feel very much "right" to me, since they have been habits for so long. It is similar to my diet, where I struggle with a sweet tooth and breaking that sugar addiction takes intention and energy - and once an addict, always an addict.
Looking at financial behavior as a type of addiction might actually be useful, as it can help us acknowledge there is a problem, identify causes and triggers and then start "stepping" along the path to recovery. Along the road, slips are to be expected and accepted and as long as there is forward momentum and progress, the changes will start to compound positively, realigning practices for better outcomes.
In my case, reallocating funds by replacing the target with something more useful has been beneficial. What this means is redefining what I value, swapping out what has a negative return with something that either could be seen as needed or an investment that generates an ROI. I like to shop, but instead of buying useless, I spend it on needed and the "luxury" doesn't mean disposable, it is items like nice lights, or a better worktop counter for the kitchen. The lights even have a decent second-hand resell value, and we will likely buy secondhand to begin with.
By doing this, it means that I can still feed my addiction, but what I am filling it with has more value and, it has a "higher value" also, so it takes longer to collect the funds between purchases, slowly eroding my instant gratification desires.
This might not work for everyone, but my point is that pretty much all of us, can do something to start improving our lot in life and even if it doesn't seem like it will do much in the early days, long-term, a lot can happen. We aren't geared to look long though, as we are programmed to want what we want now and fill our bellies when we can, even if it is going to cost us a lack of food later.
Evaluating where we are now, what got us here and planning what we can do about it might not sound like fun (it isn't), but what I have found for me is, once on the path of improvement, it is the same feeling as improving any other skill also. There is the feedback loop of trial and error, evaluation, reattempt and improvement. And, there is the flow experience on offer too, because as I improve, I keep pushing out the boundaries of the challenge. Hopefully, I will be able to say,
I'm competent.
I will never be an expert at this, but if I can significantly improve my own processes, I can at least start to benefit from the benefits over time and perhaps, it will make a difference down the track to the outcomes for both me and my family. And this is the other part of the buying for value, as rather than only meeting my own desires, refocusing what I buy and when, also adds value to those around me, as they will use these things too. This essentially "cost averages" the purchase.
What I do know right now though is, I have a lot more to learn.
At least though, it isn't quite as "back to the drawing board" as it once was.
Taraz
[ Gen1: Hive ]
