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Letting fear act on you

“Should we buy more angelfood cake mix?” I wondered as my husband and I walked down the aisles of our local Kroger. “It’s only up twenty cents.”

“I’m not buying beef jerky,” my husband said several aisles later. “I can’t stomach paying that much for that little.”

“Eggs are almost as bad as back in Seattle,” I noted further down the store.

“We’ll never again see 4-for-$10 deals on pop,” he predicted, not stopping in that aisle.

“Floss is cheap; I’m going to get two,” I said. Then realized that floss wasn’t food and, unlike everything else in the store, its price probably wasn’t going up.

Psychological studies have found that fear works as a motivator–but only when the fear is accompanied by a message on how to avoid danger. Take global climate change, for example. People who realize that it’s a real problem and may in fact lead to disaster down the road are generally panicked and depressed, because there aren’t any clear messages yet on how to fix things. (We’re getting there, though, slowly.)

In the current economy, people who are afraid of rising prices but can’t think of anything to do about them are likely to be paralyzed, afraid but unable to act. People who can think of things to do–use coupons, buy store brands, skip luxury items–are very likely to do them, and by doing do, mitigating their fears.

Fear can be a very useful persuasive tool. Letting it work on you can achieve big changes–just make sure they’re ones that are good for you, not good for the ones using the fear as a message.

Gardening is good for the mind, body, and pocketbook

My garden is just getting into full swing. The lettuce and spinach are just about ready to pick; the onions and leeks are slender versions of their mature selves; the carrots and dill are putting out their delicate foliage. I’ve got squash and melon plants waiting for slightly warmer weather, but when that warmer weather hits, my yard will be full of good things to eat.

Why post this in Money and Minds? Because gardening is good for your mind, body, and pocketbook.

Digging in the dirt has actually been found to be beneficial for mood. A Neuroscience article last year described the finding that bacteria in the soil may have the same effect as antidepressants. Antidepressants work by increasing the amount of serotonin, a neurotransmitter, in the brain, which then goes on to affect various brain structures. Current neurotransmitters either reduce the brain’s ability to inactive serotonin (MAOs) or slow its ability to remove it from synapses where it does its work (SSRIs). These bacteria, on the other hand, cause neurons to release more serotonin. The result: if you’ve got your hands in the dirt, you may be happier.

Anyone who’s done gardening–any yardwork at all, in fact–knows it can be a workout. Researchers have found that any daily physical activity, including housework, gardening, and sports, is correlated with lower risk of psychological distress. The minimum level of activity that showed a benefit was 20 minutes per week, but the more activity, the better the mood. And being more active helps keep your body fit, which improves your self-image and, ultimately, benefits your bank account through fewer doctor’s visits and medications.

And the benefit of vegetable gardening to the pocketbook should be evident to anyone who’s buying food these days. When you’re saving money by shopping for produce in your backyard instead of your local grocery, rising prices of gas and bread aren’t quite so painful. A packet of lettuce seed, for example, will cost you around $1.50, but contains enough seeds to keep you in salad for as many years as the seeds will last (around 5 years if you store them cool and dry). A single tomato plant, also around $3, will typically yield around ten pounds of tomatoes. And the taste is far superior to anything you can get at the grocery store.

Gardening gives you exercise, fresh vegetables, and a good mood, both from the serotonin and from the feeling of empowerment. Anyone with access to sunshine, water, and seeds can do it. You might have a few startup costs, but the price of a couple of bags of soil and a spade will be more than offset by the cheap, delicious, nutritious vegetables you can grow. If you’ve never gardened before, a book from the library or a search of the Internet will help you. Here are a few sites to start with:

It’s not too late to start a garden. We’ve just come upon the last frost date for many regions, which is when you want to wait to plant most vegetables. So consider digging in a bit of earth, growing some cheap food, and reaping the benefits.

Your investment decisions can have global effects

If you could choose only one, would you choose to (a) save a thousand people in a foreign country from dying in an earthquake, (b) save a hundred people in your home town (but that you don’t know) from dying in a plane crash, or (c) save your best friend from dying in a car accident?

Most people will answer (c), and will choose (b) over (a). (Up the ante by changing “your best friend” to “your child” and all but the most Vulcan-like among us will answer c.) You could call it egoism–the view that humans always act based on rational self-interest–or emotionally-motivated behavior or just plain selfishness; but given the choice, people almost always choose to do what benefits them, even at the detriment of other people, especially if those other people are distant strangers.

This is healthy human behavior; we value what we have and what we know, and we act to protect what we value. Rationally, however, if we assume that human life in general is valuable, we know that (a) is the most logical choice. Most of us don’t worry too much about this, since saving one’s best friend from death is pretty big, and after all, it’s just a hypothetical dilemma.

Now let’s talk about the food crisis. Chances are you’ve heard that food prices are rising and seen it for yourself. There are a number of factors causing the higher prices: increased demand, low reserves, the weak dollar, the high price of oil…and speculators. This Washington Times article describes how investors are putting money into futures markets for corn, wheat, and rice (among other things), which actually drives prices higher.

Speculators have always played a prominent role in commodities markets, but in the past year, they have literally overwhelmed them, causing a dramatic increase in trading volume, volatility and prices and disrupting many of the normal relationships between producers and end-users.

…As with the credit bubble before it, the explosion in commodities prices has its origins in a global savings glut and massive trade imbalances…The difference this time, however, is that even before it bursts, this bubble is causing economic discomfort for households and businesses around the world, and misery for hundreds of millions of hungry people who suddenly cannot afford a bowl of rice or scrap of meat.

Generally speaking, your financial decisions affect you, your family, and maybe a corporation’s profit margin or a stock broker’s bonus. But this is a new twist in financial decision making, where deciding to make some money could mean making a family just like yours–even if it’s on the other side of the world–go hungry.

If you could choose only one, would you choose to (a) feed a hundred starving people in India, (b) feed ten hungry people in your home town, or (c) make a little extra money off the stock market?

Choosing to invest in the stock market, even in the commodities market, won’t directly bring you to that choice, of course. But it’s true that thanks to our truly global economy, your financial decisions can now truly affect people in foreign countries. What would you choose?