By Brandon Miller, CFP–
This Pride Month, let’s pat ourselves on the back for how well the Bay Area has handled the pandemic. We can be proud of following prevailing wisdom—even as it changed—wearing our masks, keeping our distance, and getting our shots. Consequently, our densely populated region has some of the lowest death rates in the country.
Our willingness to band together and protect each other might be one of the lessons learned from the scourge of AIDS. Which makes me wonder, what will we learn from COVID-19?
I can already see some financial lessons starting to take shape. Of course, what was learned depends on what was experienced. Not all of us weathered this storm evenly.
Some were able to carry on business as usual (almost), albeit tucked away in makeshift home offices that the cat insisted on visiting whenever it was time for a video call. Paychecks continued to arrive, savings accounts swelled since there was nowhere to spend money, and Wall Street rewarded investors handsomely. Financial upheaval was not the issue here.
Others, however, watched their work—and paychecks—stop abruptly. Savings accounts that once seemed robust enough shrank alarmingly while Congress decided who was worthy of assistance. Money worries made a tumultuous time even worse.
So, while we all might be sharing a “you just never know” feeling, pandemic “haves” and “have-nots” will likely react differently. “Haves” might be ready to spend, spend, spend, practicing carpe diem because life is short. “Have-nots” may want to clutch every penny to dig out of a financial hole or build up depleted savings.
The common thread here is that budgets are not chiseled in stone. Far from it. Rather than a static, pre-determined thing, how you spend your money is something that can—and probably should—change over time. After all, your income and expenses will fluctuate throughout your life.
Some financial detours may be beyond your control, but you still have a choice of how you spend your money each day. Viewing money as the way to pay for your dreams—whether they involve world travel or financial stability—motivates you to alter spending and saving habits when circumstances, needs, and desires change.
That may seem obvious right now, but it’s amazing how quickly humans fall back into old patterns. So, instead of reverting to money habits that may not be appropriate post-pandemic, I suggest devising a plan that works for the current you and injecting some discipline into that new routine.
For example, if you want to save more, try automating your savings. Have the money taken out of your paycheck and deposited into your 401(k) or other account before you ever see it.
Another tip is to pay attention to little things that drain money away. For example, if you have Netflix and Hulu, alternating them every few months keeps you current on your shows without paying for more than you can consume.
If you’re in spend mode, discipline can help you do the things that are most meaningful without sabotaging your financial independence. Prioritize what you really want, then create a financial plan to make it happen. Perhaps the new you is less interested in making extra mortgage payments and more into using that money to enjoy life today.
Also, be realistic. You might have a newfound commitment to taking that African safari, touring Iceland’s volcanoes, and mingling with the wildlife in the Galapagos, but cramming those experiences into a single year might be overdoing it. Planning one trip a year not only lets you savor each experience, but also it is easier on your savings.
This might additionally be an ideal time to consult with a financial professional. Even if you don’t want an ongoing advisor relationship, having someone help you develop a plan for your new goals or new approach to life can be more valuable than what you’ll pay for the service. Professionals are also good at helping you instill the aforementioned discipline.
Whatever financial lessons you gleaned during this year of upheaval, remember that this is likely not the first or last time that your plans will change. What should be unwavering is using your money to accomplish what you want at any given point in your life. If you can do that, you deserve another pat on the back for turning this lousy pandemic into something that makes your life better and happier.
Brio does not provide tax or legal advice, and nothing contained in these materials should be taken as such. The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performance discussed during this program is no guarantee of future results. Any indices referenced for comparison are unmanaged and cannot be invested into directly. As always, please remember that investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.
Brio Financial Group is a registered investment adviser. SEC Registration does not constitute an endorsement of Brio by the SEC, nor does it indicate that Brio has attained a particular level of skill or ability. Advisory services are only offered to clients or prospective clients where Brio Financial Group and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Brio Financial Group unless a client service agreement is in place.
Brandon Miller, CFP®, is a financial consultant at Brio Financial Group in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.
Published on June 10, 2021
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