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In Finance, what is Downshifting?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 22 January 2020
  • Copyright Protected:
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    Conjecture Corporation
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Downshifting is a term used to describe the phenomenon of developing a mindset and type of social behavior that is aimed more at providing a sense of fulfillment to the individual, rather than focusing solely on making money. This concept is often associated with efforts to get out of the rut of working in a job that may provide an equitable living but ultimately leaves the employee feeling physically and emotionally drained. This often means that changes in lifestyle must take place in order to adopt a more simplistic style of living, and seek means of earning a living that are more personally fulfilling.

Often, downshifting begins by making changes in spending habits. The idea is to determine which expenses are truly necessities, which provide personal satisfaction, and which are generated for no reason other than to present the right image in the business world. Once an individual is able to categorize expenses in this manner, it is possible to begin determining how to make changes that either reduce or eliminate those costs. This in turn paves the way for utilizing frugality to create a simple living lifestyle that is less expensive to maintain.

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Once the individual has his or her spending firmly under control, other changes can be made that further remove the need to continue working in a position that is unfulfilling. The changes may be drastic, such as selling a large house that carries a large mortgage and purchasing a smaller home that is adequate and carries either no mortgage or one that is considerably more manageable. Planting a garden to aid in producing some of the food supply may also be an option in some cases. For people who are concerned about the impact of their choices on the consumption of natural resources, downshifting may also include finding ways to reduce dependency on fossil fuels and choosing to purchase products that are produced with as little impact on the environment as possible.

The ultimate goal of downshifting is to create a lifestyle in which an individual generates both financial and personal rewards for his or her labors. At the same time, the pace of living is typically reduced, allowing the individual to spend more time with family and friends, support causes that are considered important, and in general create a sense of self that does not rely on occupation as the primary source of worthiness. While not for everyone, downshifting can be especially helpful for people who are constantly stressed, unable to sleep, and fail to eat properly as a result of constantly attempting to stay ahead in the rat race. Making the change can mean living more years and enjoying those years in ways that would not have been possible otherwise.

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