A Once-in-a-Lifetime Chance to re-set Your Financial Life
Updated: May 18, 2021
Use this time now to re-think your financial life
Kathleen J. Owens
May 15, 2021
The pandemic has forced many of us to adopt new routines. We’ve had to hunker down in our homes for more than a year now, and things are starting to inch back to normal. Whatever normal is to you. But what if you don’t want to go back to your normal. What if you should really assess what you like and don’t like about the way you lived your life, pre-pandemic?
Now is the opportune time to take a hard look at your life. There are many areas which you can improve your life, only if you are brave enough to take action.
It would be bold to assess all areas of your life which you feel could be better, but since I’m a financial advisor, I’m going to discuss how you can take this ‘re-set’ to confront your behaviors that are holding you back financially.
You have good intentions, but financial matters often get pushed to the back burner. This is normal for a lot of people. We are all very busy with our daily lives, and if something is not staring us in the face, we tend to ignore it, even if it is something that we know we should do.
Use the time now to take a deep look and ask yourself, why? What fears, misinformation, lack of time, or lack of inertia is getting in the way of your financial success?
A survey revealed that 44% of adults keep financial secrets from their spouse or significant other. Usually, the secret is hidden debt. (1)
Is it time to come clean and confess to yourself and to your loved one’s a financial habit that you may not be proud of? Or, does your spouse or significant other sabotage your finances?
On the other end of the spectrum, you could be financially wildly successful, but your financial life is a mess. Celebrities are sadly a good example of people that have a lot of money, but have trouble managing their finances. We often see the headlines of celebrities and sports figures that have to file bankruptcy, or die without a will or trust documents.
If your work activity, your relationships with family and friends and how you’ve been living your life been disrupted by the pandemic, the time before you fully reenter the world should not be wasted. This time is a once-in-a-lifetime opportunity to come clean with yourself—to admit that all was not perfectly well before. (2)
Here’s how you can make a plan not to return to normal.
Get out a sheet of paper and draw a vertical line down the center of the paper, and a horizontal line across the middle of the paper. (a big +). On the top left, list the things that you liked (pros) about your financial life before the pandemic, and on the right list the list the things that you didn't liked (cons) about your financial life before the pandemic.
One thought could be that you liked your financial life before the pandemic because it was predictable and you had a routine. Your bills were paid on time because you automated your bill pay and set-up automatic reminders.
On the bottom left of the sheet, list the things that you liked (pros) about your financial life during the pandemic. One the bottom right, list the things that you disliked (cons) about your financial life during the pandemic.
Another thought could be that before the pandemic you were forced to spend more due to social obligations. Your friends expected you to accompany them for after-work drinks, or your kids pressured you to buy them “stuff”. You developed a habit of caving-in to their expectations. Be brutally honest with yourself and determine, were all the things that you bought, really things that you wanted to spend your money on, or were you pressured or coerced to do so?
Are you living a financial life that you don’t want to live? Do you want to earn more, but aren’t seriously taking action to make that wish a reality? Are you just ‘going through the motions’ of living a life that you didn’t intentionally want, but it just sort of happened?
Next, make a list of behaviors that you want to leave behind, and make a list of activities and behaviors that align with the type of life you want for yourself; those are the keepers.
Change can be invigorating for some or it can be a source of discomfort. There’s a saying, “if it was easy, everyone would be doing it”. Change can be even more difficult for the people in your life because it wasn’t their idea to change the way things are.
Status quo – the existing state of affairs, is a strong force. Many people keep to the same habits: it’s easier to keep things the way they are.
Keeping things, the way they are requires no effort. Change requires effort.
A large proportion of couples fight about money, and studies have revealed that money disagreements are one of the top reasons couples’ divorce.
But in reality, we all have relationships that are simply not mutually beneficial. Some people will take advantage of you, if you let them. At work and elsewhere, there are people who bring us down financially:
The working 30-year old son, that you are still supporting financially.
The co-worker who continually asks you to lunch, but then leaves you with the check.
If the pandemic has been a welcome furlough from these relationships, you should ask yourself whether you can make that (financial) break permanent. This moment is the best chance you might ever have to do so. (3)
Seventy-nine percent (79%) of parents with adult children between the ages of 18 and 34 reported that they provide some sort of financial support in one area or more, according to a 2018 financial firm survey of 2,500 parents. About 60 percent gave financial assistance for food and groceries. (4)
If the adult child has experienced a job loss or other significant hit to their finances, then, temporary financial help makes sense, if you can afford to do so.
But, you may have to have a 'tough love' talk with your adult child, that may be unaware how their financial dependence is affecting your finances in a bad way. Helping an adult child to be financially independent is the number one job of a parent.
It helps a lot to have the guidance and support of a financial professional, if you want to take action to change the things about your financial life that you don’t like. The financial pro can also point out many things that you are unaware of or haven’t thought about as a viable option.
It’s your one life, and your financial life. Take action to make it better!
(1) (2) It’s time to prepare for a new and better normal than your pre-pandemic life.
Arthur C. Brooks, The Atlantic, May 13, 2021
(3) Survey: Credit cards.com
(4) Survey: Merrill Lynch 2018