Your Standard of Living may take a hit, your Quality of Life doesn’t have to

Ben said something in a comment that made me think a bit

for the upper side of middle class these are brutal times with generation X ers significantly harder up than their baby-boomer parents. The desire they have to maintain the same lifestyle they were brought up with is almost certainly overpowering

There’s a lot in that. It’s hard to equate directly – I am probably tail end of the baby boom, DW is GenX and I had a better experience of work than she did. And work in general is getting less rewarding IMO. I’ve ascribed this to digital Taylorism before, although there is also the possibility that I am losing tolerance and adaptability to business trends through the usual process of getting more ornery and curmudgeonly as I get older.

Ben’s comment gave me a double-take. A lot of things are far better for GenX than they were for baby boomers, gone are the draughty coal-fire heated houses of the London I grew up in. TV is better, both in programming and in picture quality. Far more people have cars, though that has its downside too. Those cars are far more reliable now – I recall changing clutch cables and water pumps by the side of the road in the freezing winter a couple of decades ago. But I know what he means. Some of the important things in life, like accommodation and jobs early on, were commoner and easier to afford on typical wages than they are now. Britain paid its way in the world more, and had less global competition. More of our consumption was made locally in the mid-20th century than it is now. As a resut we had more jobs, relatively, but our stuff was of a poorer quality, hence the unreliable cars and TV sets 🙂

That decline in standard of living will progress and accelerate, as the West loses competitive edge to the East. Robert Peston had a programme ‘How The West went Bust‘ on TV last year and he pretty much laid this out with evidence. We’re overpaid compared to other people, and globalisation and improved communications will see to it that wages equalise. To see the level they will find themselves at, we are probably overpaid by five times relative to the Chinese by his reckoning. Split the difference and real wages will fall to about a third of their current real value, weight by population size and our pay will fall even further.

It’s not guaranteed, of course. There are some things that could happen that would forestall this sucker punch from globalisation. Peak Oil would put a major spanner in the works of those long supply chains and we’d have to make the stuff we use more locally again or do without. The Raspberry Pi could galvanise a generation of British kids to do something with the sticky grey stuff in their craniums rather than watching TOWIE and wanting to become a sleb.

However, the tragedy behind Ben’s comment is that each generation will have to strive harder to achieve some of the basics their parents had because of increasing global competition until that is assimilated, or the myth of continuous growth finally goes titsup, in which case it is Game Over for a lot of our standard of living.

Standard of Living ≠ Quality of Life

Just because we have an advertising industry hollering out that buying Stuff and Experiences is what makes a better quality of life doesn’t make it true, but unfortunately it makes it easy to believe that’s the case.

Obviously, at the bottom end of the standard of living scale it does directly influence quality of life. If you haven’t got enough to eat or you haven’t got a roof over your head then your quality of life isn’t great. However, one of the myths of British culture that causes a lot of misery is that you have to own that damned roof. At an early stage in your adult life you take on a huge financial risk and expose yourself to a big one-time purchase in a cyclical market. To make things worse, some of us don’t understand the repayment part of buying a house and get ourselves into a right pickle.

Other European countries manage better by having a working rental market with professional landlords rather than our motley crew of amateur buy-to-letters. It’s been a long time since I had dealings with landlords but the professionals always delivered a better experience than the amateur accidental landlords. It sounds like nothing has improved in the intervening quarter of a century.

That’s just one aspect, but there are many cases where we built non-negotiable costs into our lives. Each and every one of those binds the chains of wage and debt-slavery tighter. It doesn’t have to be this way.

You can separate Quality of Life from Standard of Living

Subject to a minimum standard, which you can achieve in Britain on benefits which is part of the financial problem we are in 😉 you can improve your quality of life separately to your standard of living. Ray has a much better quality of life than I currently have, though my standard of living is probably higher than his even after saving is taken out. Standard of living you influence by earning more, and/or eliminating debt costs. It is primarily about the amount of money you have in terms of income.

Quality of life is largely about how well your needs are met. Finance and society address the bottom two of Maslow’s hierachy of needs, after that it’s up to you and the people around you to work it out. Ray is living his values, and he’s comfortable. I am not living my values, so I have issues in the self-actualisation department. I am working towards fixing that, but I’m not there yet. Once I have sorted that, I will probably have a better standard of living and quality of life than Ray 😉

It’s the job of the advertising industry to convince you that money will buy solutions to the top three levels. They do a very good job of it, and lead most of us into a continual epic fail. Let’s take a look at those top three levels.

You can’t buy Love

For a start most of us manage to break out of that fail in the love department, though there’s the oldest profession in the world for those that prefer to use cash rather than charm 😉

To get anywhere with love you have to be a lovable person and to be able to give enough of yourself to love. That’s about how you are, not what you buy or what you own. However, the admen get in there too, with Valentine’s day, diamond rings, the wedding industry, almost anything to do with children, you get the picture. We are all social creatures to some extent, and again, lasting success in interacting with others is about who and how you are. You can take some shortcuts with what you have, but the sort of love and friendship money can buy tends not to stick around at times when you need it, or when the money runs out.

You can sort of buy Esteem

The Esteem level is absolutely rife with products to make you feel you are special by virtue of what you buy, and we fall for it every time.

The sort of esteem that money can buy you is shallow and impermanent – you achieve self esteem through self-knowledge, consistency, living your values and knowing what you stand for.

The sort of esteem you get from lowering your car suspension, fitting a loud sound system and detuning your engine with a bigger exhaust pipe is all about trying to dominate the ‘hood. It’s the same sort of esteem as the cock sparrow on the gutter dominating the area with his chirping. The self-esteem you get from what you own is all very well but it suffers from the ancient problem of the sound of a tree falling in the forest with nobody to hear it. If your self-esteem is dependent on other people looking at what you have and where you are then it will fail you in the dark night of your soul when you need it most. You can’t buy that, you have to grow it through hard work and self-knowledge, and even then there are no guarantees.

You can’t buy Self-Actualisation

It’s in the title. Doesn’t stop there being a huge industry being out there to separate potential self-acualisers from their money, but the Delphic Oracle had it spot-on, all those years ago.

Know Thyself in Greek in a stained glass window
'Know Thyself' in Greek in a stained glass window

Know Thyself. It’s something only you can do, and to achieve self-actualisation it’s something you have to do.

Quality Of life is about what you Are as well as what you Have

It took far too long for me to come to this realisation. Shona hasn’t got it yet, bless her, though she’s on a voyage of discovery. It is something that I found in a crisis point, I saw clearer, that I didn’t need another eight years of a decent middle class salary doing a middle class job.

So I started to make the biggest purchase in my life, of something no ad-man has ever offered me. In financial terms it is much more costly than my house and car. What I am buying cannot be held, or weighed, it is intangible by definition.

It is freedom and dominion over my time. No Stuff will be as good as Freedom from wage-slavery feels. It has no fixed price – Jacob in his ERE days won his freedom far earlier in his life than I and for a far lower price. There are other ways of doing it – Dolly Freed’s book Possum Living shows another way.

One of the things that saving towards buying financial independence showed me was I don’t need a lot more Stuff in my life, because my spending on Stuff dropped way down. I don’t miss it any more. Even if I had no independent savings if I drew my pension early I would have to increase my spending on Stuff to use it up. I do miss some things that I had to give up to shorten the period of saving to a minimum, and I’ll probably restart them. But more than half of my spending was a chimera from which I derived no lasting pleasure. To hell with that. I had to find that out the hard way, some times that is the only way; Nietzsche had some point with that which does not kill us makes us stronger.

Tyler Durden showed why it’s so hard to see this consumerist fallacy in Fight Club It’s only after we’ve lost everything that we’re free to do anything. Because he’s a movie the principle is overstated for dramatic effect, but far too many people cling to the inessentials of life as their standard of living falls only to lose the essentials because they are misallocating their resources.

Taking a controlled standard of living hit upfront means I haven’t had to give up anything really important to me

I was ‘lucky’ when I thought I was done for working three years ago. I first prioritised short term savings, along these lines, but what I percieved as an immediate hazard of having to leave work turned out to be less acute. At no time in the past three years have I attempted to recover my original standard of living. I simply aimed for a controlled crash-landing to a satisfactory standard of living, slowly surrendering disposable income to buy my future income, a reverse of the ‘borrowing from my future self‘ by saving to my future self.

I targeted half my income as a reasonable goal. I was more than halfway through the controlled crash landing when I realised that I was in danger of succeeding, despite not having the benefit of compound interest on my side. Some things make the job a lot easier for me than, say, ERE. I already own my house outright, and I have been saving in a good pension for nearly a quarter of a century. Against me, I want to retire early, which weakens the pension severely, combined with dastardly dealings from my employer which means even if I carry on working to 65 I can never realise the original target of half my salary with that pension now.

It is only now that I realise I have no need for half my current income, proven by the simple fact that I am saving well over half of it. This is largely as a result of taking the standard of living hit entirely under my control and in ways of my choosing. I will improve my quality of life once I have completed the path.

The Times They Are a Changing – Choose Quality of Life over Standard of Living

These challenges are coming to many of us in Britain, and Ben opined

The desire they have to maintain the same lifestyle they were brought up with is almost certainly overpowering

They need to kill that desire. The key to preserving your quality of life when your standard of living is going down is to get ahead of the curve and choosing where the dwindling resources will be allocated. Doing that reactively puts you in endless firefighting mode.

Choose your battles before they choose you. Live intentionally, know yourself, what your values are, what matters to you, what your resources are and what your potential is. Then deploy those resources, stay adaptable to changing circumstances, and live.

One good tip here is to engineer out as many fixed costs and long term commitments as you can from your life, things like Sky TV, long mobile phone contracts, any sort of contract like gyms. For elective spending it’s sometimes worth paying more for something to get that freedom from long-term lock-in. For things you must have, like mortgage/rent and fuel contracts are okay, but many people see the savings on elective contracts without seeing the invisible chains of spending that tie them down. And think long and hard before taking financial responsibility for anything that eats.

That’s where Shona screwed up. That family could either pay for school fees, or for their huge house. If the school fees mattered more, they would have downsized ages ago, when the first child went to public school, and not been caught on the hop. If the house were more important, then the school fees would go, and they’d still be living in their fancy house.

Prioritising worked for me, though I was already living within my means when I started, unlike Shona. I cut the holidays, the gadgets, the media buying. I’ve already bought myself a tax-free income of over a hundred pounds a month with my measly post tax savings, and a potential income of a lot more with pre-tax savings, which I will spring tax-free as a pension commencement lump sum. I also bought myself a stake in a business, three years’ index-linked  living expenses with NS&I and a cash emergency fund.

It’s all about the choices you make, and I’ve chosen to surrender standard of living to buy a better quality of life. They’re not the same, whatever the admen want to have you believe. If it traps you in a job you don’t like or takes you away from seeing your children grow up, then a higher standard of living is often associated with a poorer quality of life. It’s the dirty underside of consumerism, and it needs to be called out every so often. Choose quality of life over standard of living. You’ll feel better for it 😉


13 thoughts on “Your Standard of Living may take a hit, your Quality of Life doesn’t have to”

  1. I think where most people get it wrong is that its not about spending money or not spending money, its about getting full value out of what you spend. Some expensive things are wise purchases… I pressured an older member of my family who doesn’t like spending large sums of money to sign up for the gym when they weren’t walking as freely as they used to. It’s one of their larger expenses, but one that massively boosts quality of life, which as you say is key.

    On the other hand you have purchases that give bad value for money. An advert on a website today told me I could get a neo plasma 42 inch HD TV for £500. It sound fantastic… neo plasma, but I bought a widescreen old school big TV for £20 from the charity shop. All it cost me was very sore arms after carrying it (with help – I’m not that strong) up the road and up the stairs. The better TV is fabulous, but £480 is almost 2 months rent and I’m afraid its not that much more fabulous than the other one. Incidentally, (you’ll be interested in this one) some family’s have one parent working full time just for school fees… it absorbs the lot… kids have to have child minders etc.


  2. Thanks for the morale booster. It’s really true that standards of living have really fallen in the West. I see the watershed as the first major recession in the seventies.

    Generation X may be having a hard time but tail-end baby boomers didn’t have a free ride either. Early boomers literally fell into their positions but if you were coming out of school in the mid to late seventies or really up to the 1980’s things were far from easy in the job market and wages were frozen for years while wage concessions to unionized workers were slim, to say the least.

    There were, just as today, years of job instability, following the first “oil crisis” and consequent Great Recession #1. You could say it fueled the enlightened self-interest and greed that fueled the latest “crisis”. Call it “pent-up” demand to get what you could, while you could, and the rationality of “freeing the markets” “deregulation” and “globalization” as the only answers to regain that lost standard of living. No suprise that those on the Right came to dominate western governments while the Left moved to the Centre and “Neo-Liberalism”. Hence, we find ourselves where we are today. What will the next “lost generation” bring upon us ?

    Anyway, I have to agree about quality of life, but we only have the privilege of talking about it because we shared in some of the crumbs of that middle-class standard of life. Oh well…all that spilt milk…


  3. @rob Guess what, the CRT TV’s still have better picture resolution than either Plasma or LED. I think, if it’s working OK, you got a steal. Probably be able to sell it at a profit down the road, when CRT becomes extinct. I think when people get tired of squinting at plasma or LED from the side they’ll clamor for CRTs and there won’t be any new ones to buy. I considered these options because of the clunkiness of CRT but decided against it. Apparently my JVC has won consumer awards so I don’t think I’ll be junking it anytime soon.


  4. Another excellent article,
    Yes I agree that our standard of living is going to take a hit, and that the two ends of society will bear the brunt of it.

    The under 30’s will find it difficult to get decent employment if they have no marketable skills. House purchase is off the Radar till House prices are allowed to fall to 4-5 times earnings, or wage inflation can be brought into play. Both are unlikely to happen, there are just to many barriers. The BTL brigade, the Builders Federation and the lenders who lent on overvalued property, using cheap short-term money.
    With unemployment being high, whilst demand for manufactured goods are low. It will be difficult to increase wages, even by the RPI.
    Demand for goods and services will now be in the third world, hence the reason why goods are increasingly being made there.

    The so called lucky generation, the baby boomers, yes if they are lucky have got decent company pensions, but in most cases paid 5-8% of their wages into Pension Schemes as well had their employers contribute 15-20% of their salary into the scheme.
    Question? Is pension contributions, deferred wages for you to receive at a later date? Or is it something that can be taken off you if politics dictate?

    Also whilst we have seen the value of property rise, much of this rise is tied up in the property, hence the term “Capitol Rich, Cash Poor”. Plus the massive and sustained fall in interest rates as led to a fall in our spending power, Yes, we will spend any income generated, but we won’t touch our savings unless we are really desperate.

    Yes there was work around, but a lot of it low paid, as now. But then here was a lot of people after decent jobs, as now. The term baby boomers was not a term used in fun, I went through schooling were to be in a class of under 45 was deemed to be small. A lot of class sizes were 50+. Entry into Grammar schools was decided by the budget restraints at the time, the same could be said for going to University. The politicians at the time, both local and national were under extreme pressure to balance their budgets
    In doing so varied the exam levels needed to get a pass to go to Grammar School or University, on a year by year basis.
    Yes University was free, but only about 20% went to both Grammar Schools and onto University.

    The other main criteria was the so-called balance of payments deficit, the aim was to pay for our imports by our exports, not always possible. The shortfall was made up by what the economic wizards called [invisibles] a term used for dividends from overseas trade of companies based in the UK and the selling of Insurance etc.

    In the 80’s these ideas were abandoned as the term Global Economy and Adam Smith’s ideas of free enterprise came more to the fore. Hence the growth of Factories and Manufacturing overseas and the decline of this in the UK/US in particular and the western world in general. In the short term it did create growth and an increased standard of living in those countries that had these new industries. We also benefited from cheap imports, so even though unemployment, both hidden and obvious, rose we could all still live well.

    But the G7 Countries became greedy and played one third world country off against another to drive down wages that were already low even lower. Plus it was the era of cheap energy, oil at $50 a barrel, petrol at £1 a gallon and a reasonable wage to live on. The world economy grew, which was the whole idea, living standards grew and the G7 became the G20. As the new middle classes in these third world countries wanted a bigger share of the cake and more control of how it would be divided up.

    I know people say, O! It’s all a conspiracy, Illuminati, Masons Etc. In my opinion it is a culmination of the three tier society. [Rulers, Administrators, and the workers] following Orwell’s ideas, but more importantly James Burnham, the most underrated yet influential man in the 20th century, that no one as heard of. Read his books the Managerial Revolution and the New Machiavellians and the fact that he was an advisor to most US Presidents since the War.

    People who Rule do not consult the people they rule on what to do, they may discuss policy with their Managers, then get them to introduce that policy on the shop/office floor. I mean did Alexander the Great discuss where to invade next with is Bowmen or Spear throwers, Is Generals, Yes, who then put is plans/policy into operation.

    Plus the people who rule, don’t recognise; Race, Colour, Gender or Nationality as a problem. They all work to the same game plan, because the end result is not wealth, but power.

    But I have prattled on enough, I have reached an age were I have more years to look back on then years ahead of me. Plus I have sufficient wealth for my simple needs, I can look on the world with interest but no fear, it is the under 50’s who will have to adapt to a changing world.

    The G20’s plans are coming slowly to fruition; here is a link that explains it far better then I could, it is a lecture given to a group of students from a member of the IMF.


  5. the price dimension is misleading in uk housing. think of 60m people, they are all living somewhere, therefore there must be a rough parity between supply and demand, whether rented or bought, ‘good’ or ‘bad’ quality…as i see it, the ‘excess’ demand is for quality, not quantity, consequently it is a market driven by class aspiration prevailing in our primitive and tribal society. uk housing has been ‘inadequate’ for as long as i can remember, but like tvs, it gets better all the time….


  6. > I am probably tail end of the baby boom, DW is GenX

    I noticed that change in title :-). Congratulations both! I am very happy for you.

    > one of the myths of British culture
    > that causes a lot of misery is that
    > you have to own that damned roof.
    That one’s being exported to any damn country willing to buy into it. I was suckered by it too. Agreed on the remarks about the European housing market. Spot on.

    > TV is better, both in programming
    No, do not agree.
    > and in picture quality.
    Yes, you have a point there. But my parent’s old 25+ year old CRT TV still works, and I use that for watching the odd DVD. I don’t have any other TV, terrestrial or cable.

    > Choose quality of life over standard of living.
    Or like that song in Trainspotting, “Choose Life” 🙂


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