Spending Under the Influence

by | Aug 10, 2009 | Cash Flow, Weekly Column | 1 comment

man sleepingAt last, I’ve learned the real cause of our current recession. The majority of the cascading poor financial decisions over the past 10 years were made by politicians, bankers, financial executives, and consumers who were under the influence. This explains a lot.

All those bad decisions, however, weren’t affected by drugs or alcohol—but by lack of sleep.

What does the number of hours we sleep have to do with the current financial crisis, or with making sound money decisions in general? Just about everything, according to Dr. James Maas, professor of psychology at Cornell and author of Power Sleep. Dr. Maas spoke at the 2009 gathering of the National Association of Personal Financial Planners (NAPFA).

The amount of sleep an adult needs every night is about eight hours. When asked, Americans tell researchers they get 7.1 hours. When sleep is actually monitored, the actual amount is one hour less, or 6.1 hours. “Three out of four Americans are sleep deprived,” says Maas.

What is the problem with sleeping a couple of hours less a night than we should? Aren’t there legions of us who boast we can get by with just five, six, or seven hours? While some people do require less sleep than others, if we think we can function on less than our own bodies need we’re only fooling ourselves.

Someone who gets only six hours a night of sleep has worse mental clarity man asleep by computerthan someone with eight hours of sleep who has a 0.10 blood alcohol level—two percentage points higher than the legal limit for drunk driving in many U.S. states. Is it any wonder so many people have made so many bad financial decisions?

The quality and quantity of our sleep determines our alertness, reasoning capacity, energy levels, moods, and general health. Lack of sleep significantly inhibits learning and memory. It also lowers our resistance to viral infection by 50% and increases our vulnerability to a host of diseases. Research has shown that getting adequate sleep—a full eight hours a night—is more important than diet and exercise.

Most of the beneficial activity of sleep happens during REM periods, which occur at 90-minute intervals. The duration of the first REM period is nine minutes, the second is 18 minutes, the third is 30 minutes, and the last one is 60 minutes, which happens one hour before you wake from an eight-hour sleep. The average American misses the last 60 minutes of REM sleep, getting just 57 minutes, or half of what is needed.

To see if you are sleep-deprived, answer the following questions: Do you need an alarm clock to wake you up? Do you hit the snooze button on your alarm? Do you instantly go to sleep when your head hits the pillow? Do you often “sleep in” on the weekends? Do you often get drowsy after a meal, during a concert or play, or listening to a lecture? If you answered “yes” to two or more of those questions, you are sleep deprived.

Here is what you need to do to be at your best. First, determine your sleep need. According to Dr. Maas, it’s hard wired to be between 7.5 and 8.5 hours for adults and 9.25 for teens. Then make sure you get it. For some helpful suggestions, check out Dr. Maas’s website at www.powersleep.org.

woman waking up happyGetting enough sleep betters your chances of making wiser decisions in many areas of your life, including your finances. Besides, waking up bright-eyed and bushy-tailed every morning is a great way to annoy the heck out of those of us who don’t happen to be morning people.

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