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Contributed by Vicky White
www.LifeDesignStrategies.com
It was just another one of those brown envelopes from Revenue Canada (the Canadian equivalent of the IRS)…until I read the fine print and realized I was being audited.
Predictably, I did what most people would do; I panicked!
Then I reviewed the facts: the letter wasn’t very friendly, telling me that most likely I owed them a huge amount of money; they listed a whole load of documents they wanted from me, going back over three years of my business, as well as the precise format of how they wanted them presented; and they told me that I had 30 days to get the materials together! The letter was signed by a Mr. Chan.
Of course, the brown envelope arrived one week before I was to fly to New Zealand to visit my family for a month! I bravely contacted Mr. Chan, told him I was off to New Zealand, and received an extension.
Meanwhile, everyone I spoke to told me horror stories about Revenue Canada, along the lines of “they’re out to get you”, “you can’t win”, and “they’re a law unto themselves.”
I did stress out for a couple of weeks before I remembered what I teach the clients I work with: there was a reason this was happening, and most likely I had a lot more control over the outcome than others were predicting. It further occurred to me that this audit was actually a gift – Revenue Canada was going to help me get my accounts in order and create a system that would enable me to grow my business!
The fact that I’d started a relationship with a former accountant a few months earlier just had to be some kind of divine timing! There definitely seemed to be a plan afoot and I felt that, whatever happened, I was being supported.
I made a decision to refer to “my friend Mr. Chan” whenever I mentioned his name or spoke about my tax audit. My financially experienced friend didn’t quite see it the same way, but he did spend countless hours with me over the next few months getting my accounts in order, documenting where I had made mistakes in my addition (huh?), where I had claimed things that were not claimable, and where I had neglected to claim things I could have!
The truth was, it wasn’t that I was trying to get away with anything. I’d been in Canada for just a few years, I’d been doing my own monthly accounts, and I’d been making assumptions about what I could claim. Definitely a case of a little knowledge being a dangerous thing! I did have someone complete my tax return each year, without realizing she was just transferring the figures I gave her onto my tax form without questioning anything. I could have done that myself! I was sending in tax returns that made no sense – no wonder they flicked up a red flag in Revenue Canada.
I learned several things in the process: I learned that renovating my new condo was not actually something I could claim; and that credit card statements are not receipts (after all, those expenses could be for anything). I learned a lot of things that were probably silly enough to show Revenue Canada I wasn’t trying to rip them off.
I convinced myself that Revenue Canada was there to help me. And I was convinced that my friend Mr. Chan was there to see that I was helped. He and I became buddies (in my mind, anyway) and I eventually delivered a box with the information they wanted, including a whole lot of receipts I had managed to get from coaches and service providers from past years. My friend Mr. Chan and I then had a little to and fro process with letters as he asked more questions and I explained what my business was all about and what my intentions for it were.
This whole process took six months and I can’t say it was fun, but in the end I felt I had been well treated. There was one expense I really think they should have allowed but I was more than happy with the $5000 tax refund I received a few weeks later plus the tax credit I was granted for the following year. I came away feeling as if I probably wouldn’t have had the same outcome had I gone through this process with the belief they were out to get me.
I now have a system I still use, I know how Revenue Canada likes things to be organized, and I know that if I was ever in a similar situation, it would take me half a day to get everything together to present to them. Revenue Canada did support me in creating the foundation for a strong business, for which I’m very grateful.
Questions for reflection:
- Do you think Vicky’s early shift in attitude about her predicament – before the full audit process was underway – made a difference in her outcome? How?
- Do you believe it’s possible to apply an “Upside perspective” to just about any situation in life? What exceptions would you make and why?
Good news heralds us from the current (11/23/09) issue of Time Magazine. The word is that some aspects of the current recession appear to have made people feel better!
The article refers to Gallup-Healthways Well-Being Index Study¹, which has been following health and well-being data since its launch in January 2008.
The study was designed to function like a Dow Jones average of attitude. At least 1,000 people are surveyed daily, 350 days a year.
According to the results, when the stock markets dropped dramatically last fall overall happiness did too; and anyone who lost his or her job, house, or health care is probably still in a world of pain.
But here’s the really interesting finding: overall well-being was higher in the summer of 2009 than it was in the previous summer, before the impact of the recession was fully upon us. In fact, the latest report finds America’s happiness at an all-time high!
According to the article everyone – or at least everyone who claims to be happy – seems to have some reason for finding an “upside to the downturn.”
This data reinforces the observations made in our inaugural web column in March 2009. We noted that despite hardship, fear, and worry about the future, a number of people reported that their lives had also improved in some ways.
These included:
- Spending more quality time with family and friends
- Becoming more resilient and re-prioritizing key aspects of their lives
- Reflecting on and shifting their core values, lifestyles, and spending habits
- Reaching out and helping others, even when their personal financial situation was deteriorating
Perhaps you’ve experienced something similar this past year?
We invite you to take some time over this Thanksgiving break to consider the potential upsides to the downturn in your own life, as well as the ways in which you and your loved ones may have become stronger and healthier individuals as a result of the current constraints.
Best wishes to our American readers for a wonderful, gratitude-filled Thanksgiving!
¹ Healthways Well-Being Index Data, U.S. Composite and Life Evaluation Score
- Based on 31,523 surveys completed in October 2009. Total of 655,061 since January 2, 2008
http://www.well-beingindex.com/files/GallupHealthwaysWBIReport_102009.pdf
By Steve Goldberg and Barbara Taylor
As we ride through the waves of the current recession, there is much speculation about the kind of economic reality that will emerge on the other side of this downturn. Some forecasts predict that improvement in the economy, employment, income, and spending will be a long, slow process over the next several years.
There is also considerable discussion about consumer behavior and how our spending and saving patterns will change as the economy recovers. It’s fairly obvious that, as a nation, our general pattern prior to the recession included overspending and the accumulation of unmanageable amounts of debt. A recent report from Reuters/University of Michigan Consumer Surveys (2009)* reveals a decline of consumer confidence in personal finances, job prospects, and the purchase of housing, vehicles, and “major household durables.”
Still, it’s hard to predict whether the current financial restraints we’re experiencing are sufficient to result in permanent changes in our consumer habits. Will we go back to our old, shop-till-you-drop ways (if we can get away with it)? Or, will we adapt to a consensus of “new normal behavior” that reflects a more modest baseline of financial restraint wherein we live within our means?
Which type are you?
A new study by the Decitica Marketing Research Group** examined extensive data on the current attitudes and behaviors of consumers across various categories of gender, income level, and age group. Their analysis suggests that four distinct groups will emerge from the current recession:
Steadfast Frugalists:
- Committed to self-restraint, engaging in prudence with unequivocal enthusiasm. They make up about 20% of American consumers, with representation from all income and age groups.
- 6 in 10 are women.
- Steadfast frugalists are the most disciplined in their behaviors and are seriously committed to self-restraint.
- 29% of this segment identified themselves as “tightwads” even before the recession.
Involuntary Penny-Pinchers:
- About 29% percent of the population, this segment is the most severely affected – financially and emotionally – by the recession. This group is over-represented by people in their 30’s and 40’s; 6 in 10 are women.
- This segment has not become thrifty by choice; their new-found frugality has been forced upon them by the recession. Half of them have not saved any money for emergencies.
- 38% of this group spent more than they earned last year (meaning, they were not that disciplined to begin with).
- Their behavior patterns are similar to Steadfast Frugalists except in their aversion to expending effort in money-saving strategies: only 17% find buying store or generic labels to be satisfying, compared to 59% percent of Steadfast Frugalists.
- Emotionally they admit to being more scared (77%), stressed (81%), and worried (87%) about the future than other groups.
Pragmatic Spenders:
- Pragmatic spenders have also curbed their spending but they are less troubled by the recession and have the greatest capacity – both psychologically and financially – to willfully resurrect their past spending patterns.
- This group comprises 29% percent in the population; 6 in 10 are men; and the majority are in their 60’s.
- Sufficient income has reduced the effects of the recession on this segment. Only 28% of Pragmatic Spenders feel the recession has changed what and how they will buy in the future, compared to 55% of Steadfast Frugalists.
Apathetic Materialists:
- Apathetic Materialists, about 22% in the population, seem the least changed by the recession in their spending habits and future intentions.
- They have not embraced the new frugality to the same extent as others as they don’t get much satisfaction from such behaviors. Only about 6% in this group find price comparison to be satisfying in contrast to 85% in the Steadfast Frugalists group.
- This segment is made up of slightly more men (55%) than women; most are younger consumers (72% are below the age of forty).
- They are the least driven by price: only 8% admit to being focused on value as compared to 30% of Pragmatic Spenders and 52% of Involuntary Penny-Pinchers.
Questions to consider:
- Which of the four segments to you identify with?
- Does your choice of segment change when you think of who you were (your attitudes and behaviors) a year ago?
- Do you predict a further change in yourself/your choice of segment in the future, e.g. a year from now?
- The above study found that all four segments confess to getting less pleasure from buying things now as compared with the time before the recession. Is this true for you, too?
- What else have you learned about yourself and your needs as a result of this current recession?
Sources
*Reuters/University of Michigan. (2009). Surveys of consumers. Ann Arbor, MI
https://customers.reuters.com/community/university/default.aspx
** The four segments are expanded in Decitica’s Marketing to the Post-Recession Consumers study highlights:
http://decitica.com/?p=618&cpage=1
Please use the link below share your thoughts with the Upside community.
Submitted by Heidi Kistler
It was close to midnight when we arrived at Kalispell airport in northern Montana, only to discover that my husband’s luggage ended up in Timbuktu (No kidding!). This grim news arrived after 12-plus hours of traveling, the insides of three airports, crying babies, cramped seats, and limited meals. Needless to say, it did not sit well with us.
While waiting at the now-deserted airport, completing lost luggage forms and becoming increasingly cranky, I flashed back to my earlier thoughts that day while flying over the mighty Rocky Mountains. How desolate, awesome, endless, inhospitable and fierce these mountains are, especially to the early pioneers who left the known for the unknown and a new life, traveling in a manner few of us could survive today. Their grueling journeys lasted months and, if they were lucky, they arrived at their destinations with their family members alive …only to be faced with other survival issues.
They didn’t worry about lost luggage, in-flight meals, or delayed flights! They were just thankful to arrive in one piece.
I thought about the pioneer women, worried about childbirth; I thought about their families cramped in covered wagons, praying that they could traverse the mountain passes before the snow fell, terrified of getting sick, scared to death of being attacked by native Americans, hoping that the men folk would be able to bring game to the evening’s campfire. Suddenly, when viewed through the lens of historical perspective, our little airport drama seemed so inconsequential!
Instead of being vexed, I was grateful for the privileges—technological and otherwise— that we take for granted and I was grateful for remembering how truly blessed we are. I was grateful for this experience of not sweating the small stuff.
Questions:
- Can you think of times in your own life when a shift in perspective helped you to overcome difficult times? What made it possible for you to do this?
- Would you be willing to share with us some of the ways you’ve learned to “not sweat the small stuff”?
Note: If you’re not familiar with the expression “don’t sweat the small stuff”, it refers to a manner of speaking and a way of life coined by Richard Carlson, PhD in a series of books.
Please use the link below share your thoughts with the Upside community.
Research released in the September 28th online edition of the Proceedings of the National Academy of Sciences suggests that during the Great Depression and other major economic downturns the average life expectancy in the United States actually rose! Yes, you read this correctly!
These were the unexpected findings of University of Michigan researchers José Tapia Granados and Ana Diez Roux when they examined American historical life expectancy and mortality data for the years 1920 to 1940. Specifically, they found that life expectancy during the Great Depression increased by 6.2 years — from 57.1 years in 1929 to 63.3 years in 1933. The increase held for men and women, including white and non-white populations.
I found this data fascinating because I assumed—like most people, according to the researchers—that periods of high unemployment would be more harmful to health than economically better times. A related finding from the study that is equally counter-intuitive is this: mortality rates (the number of deaths) increased during periods of strong economic expansion, such as in 1923, 1926, 1929 and 1936-37.
What could this research be telling us? If we were to view old black and white film footage taken during the Great Depression—such as scenes showing people out of work, or waiting for handouts in bread lines—we would be more likely to see evidence of pain and struggle than images reflecting robust health and well-being. Yet something seems to be going on in challenging times that motivates us to dig in, persevere, and even live longer on average than we do in easier times.
These findings reinforce my view and personal experience that in times of crisis and challenge, our clarity and focus might actually be improved. Could it be that—once we get over the initial shock, fear, and/or anger about our difficult circumstances—our attention is more focused and we engage in resourceful ways of thinking and problem-solving that may be more productive with even better results than in more “normal” times?
Questions for Consideration:
- How has the current economic downturn impacted your thoughts, feelings and behaviour during the past year?
- Have you noticed ways that you have become stronger, more resourceful, and perhaps even more satisfied with some aspects of your life?
Please use the link below share your thoughts with the Upside community.
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