Research Paper By Nicole Manuel
(Financial Sustainability Coach, UNITED STATES)
Is it your dream to use your coaching skills to inspire a global awakening? There is a profound opportunity for coaches to illuminate a path toward a more sustainable economy for everyone. Buddha encourages his followers to first
be the change you wish to see in the world.(1)
According to Albert Einstein,
The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking.(1)
Although it may seem far-fetched, economic growth is actually determined by private consumption.(2,3) Each individual thus effects the economy with his or her own financial decisions. A sustainable economy begins from within, by changing the way individuals perceive and interact with money. Unlike current professions in personal finance, coaching empowers clients to take stock of their own financial futures, using deep Socratic questioning to surface the root problem at its core while promoting personalized client-driven solutions. Coaching offers clients the opportunity to create a more positive relationship with money and explore how that relationship can impact the overall economy. It is through this shift in perception and heightened awareness that a more sustainable economy can emerge, one conscious consumer at a time.
It’s a Buyers’ World
Although the global economy may appear to be a large, invisible hand that guides our every transaction, it is in fact the other way around. Our every transaction affects the global economy. You see, the economy is like a highway system, filled with interconnected webs from each region, every transaction ripples throughout a company, a region, and thus the economy at large. The Gross Domestic Product (GDP), which is the yearly measurement of economic growth, is calculated by the sum of the economy’s interconnected parts: public consumerism, business investments, government spending, and net exports.(2) The largest contributing factor to a nation’s growth in the United States is public consumption, which accounts for 70% of its GDP.(2,3) In other words, the general public controls the direction of the economy by the purchasing choices made by its constituents.
If consumers believe the economy will do poorly, they will be less willing to spend due to the uncertainty of the economy’s impact on their own financial situation. This in turn will hurt businesses and their shareholders, resulting in cutting costs, labor, and corners in order to maintain their profit margins. However, if consumers are optimistic about the future, they will be more willing to buy and thus boost business, enabling businesses to hire more workers and increase supply to meet demand. Consumer demand also determines what items are sold and the trends that follow. Consumer choices ripple throughout our economy. This is why consumption is the largest contributing factor to the nation’s economic growth.
The Debt Cycle
In the Western world, many individuals feel the need to aspire to an affluent lifestyle due to messages in the media, in the workplace, in society, and even within their close circle of friends and family. These messages strip consumers of their self-confidence, leaving them feeling inferior and incredibly disempowered. As of January 2014, Americans are over $11 trillion in private debt, with each household owing $15,270 in credit card debt alone.(4) These disempowered consumers have no idea how a shift in their mindsets can effect their lives and the economy at large.
In the eyes of the disempowered consumer, if he or she were to scrape enough money for a desired item, his or her self-worth would be reaffirmed. It is this mindset, among other factors, that continues the cycle of personal debt while also encouraging this mindset among other disempowered consumers. For instance, if a girl were to buy an expensive pair of shoes to feel better about her financial situation, others who see her wearing them will envy her or feel as if their worth is less than hers because they can not afford such beautiful shoes. This chain reaction is then noticed by fashion magazines when they research the desires and purchases of women, and they in turn reflect that desire back to women as the latest trend. In other words, every disempowered consumer’s purchases effect the decisions of others who are feeling disempowered, while also encouraging businesses to produce more of those items. This cycle of negative emotions is fed by something called “consumerism.”
According to the Merriam-Webster Dictionary, consumerism is
the belief that it is good for people to spend a lot of money on goods and services,
as well as
the actions of people who spend a lot of money on goods and services.(5)
When people are unconsciously spending or are spending from a place of disempowerment, they can overspend, spend on items they don’t really need or desire, or even purchase goods that they know are bad for their health and safety or that do not match their true values. On the flip side, someone who has a healthy level of self-confidence will buy based on their values and will actively select items that are within their budget, are safe and healthy, and that will serve them. This is what I like to call a “conscious consumer.”
The Rise of the Conscious Consumer
Conscious consumers are aware of the effect their purchasing decisions have on the economy at large. They use their money to vote for the goods and services that match their values, in the knowledge that the companies will ultimately listen to the demands of their customers. For example, a conscious consumer might avoid purchasing from companies that contribute to perceived problems and will instead purchase goods from a company that contributes to perceived solutions. Conscious consumers might also make purchasing choices that can help them become the change, instead of entrusting a company with that task.
According to the BBMG Conscious Consumer Report, roughly nine out of ten Americans believe the phrase “conscious consumer” is a good description of themselves.(6) The report also revealed that if products are of good quality and are reasonably priced, conscious consumers are more likely to purchase from companies that produce
