I know that I am not alone when it comes to the experience I have had over the past several months. We are just over half way through the year 2020 and it feels as though the whole world has slowed down in an attempt to face Covid-19. For me in New Zealand, this has meant being locked down in different levels from March through till now in mid June. Although it has been challenging, I am grateful to be in an environment like New Zealand where we really have done our best to tackle it fast and early to avoid the devastating impacts we have seen unfold in other countries around the world. Even within my country, I know that there are others a lot less fortunate than me, so I have gone through this period doing my best to count my blessings.
As I have been reflecting over this time, I thought I should share my thoughts as it does have quite big impacts on the quality of our lives, which includes our financial state. I am hoping that the future looks a bit brighter, but regardless of what happens later what I can do is take as many learnings as I can from this period, and even if things get worse I will be slightly more experienced and prepared. So here are my thoughts and learnings and hopefully you can learn a thing or two as well or at the least be inspired to reflect and pick up your own learnings to move into the future with.
Unique Times
Throwing back to the start of 2020, my year started with me performing a new role at work within a new team. This role required a strong understanding of how the financial system in New Zealand works in general. When it came to learning these real life economic impacts on our environment, the team around me often referred back to the global financial crisis (GFC) to teach me each lesson. It was always a running joke that I was ‘still in diapers’ or ‘learning how to walk’ when they referred back to this time in the financial world. Throughout these past months the joke has shifted to now being “Nathan, in the future you will be teaching some young guy about what happened ‘back in Covid-19’ and how that impacted the financial world”.
Pushing humour aside, what this shows is that this has been a truly unique time for anyone to manage their finances, from everyday people like you and me through to the biggest company in our country. Even though it will look a little different for everyone, you are not alone if you are unsure or finding it hard to manage your money in this environment! We have all felt the physical restriction of places where we would normally go to spend money. Maybe it’s something more serious like a reduction of income, changing the amount you have to live on every week. Maybe there has been no change of income, but you feel quite unsure about your source of income and your uncertainty is already shaping the way you feel about spending money.
My personal learning and encouragement to you is to build resilient values and character that will guide you matter what environment you find yourself in, foundations that will not shift depending on the amount of money coming in or already sitting in our bank accounts. Once again, I count myself as blessed with the financial stability I am able to experience in this time compared to many, but even still I have pushed myself to stick to the values and character I have built prior to Covid-19. At the same time there have been people around me that have definitely been financially shocked due to the shift in environment, and when it came to helping them I found myself going back to simple lessons that existed before-hand.
The thing is, the environment isn’t the sole cause for the way we manage our money going forward. This can be proved by looking at how different people can react differently to the same single scenario. For example, let’s say they are facing a feeling of uncertainty on whether they are going to get paid enough in their next pay cycle to cover their normal expenses like rent or food. Some people could turn super frugal, planning each day coming up so they only spend on what is absolutely necessary. Alternatively, others will feel shocked and turn careless, spending way more than usual because they already feel out of control so they think to themselves ‘what difference does it make if I spend more on treating myself’. This is an example of how the values and character we have can determine the way we manage our money and we’re not just victims to the environments we find ourselves in.
Bringing in the lesson I am wanting to drive, we can look at what happens if we have characteristics and values that will help us react to money challenges from a place of control and intention rather than shock or feeling overwhelmed. Let’s say we have built a strong habit of prioritizing ourselves (personal savings, self care, etc.) before we go and give our money away to the world (utility bills, insurance, rent, etc.). When uncertainty hits us and we require additional self care, we will go and buy that treat from a place of control and intention, meaning we won’t feel any guilt and we will still be aware of all the financial commitments we have but that won’t stop us from looking after ourselves. Compare this to our prior example of reacting to uncertainty from a place of shock, there is most likely guilt involved since deep down we feel like we’re sabotaging ourselves and we would be a lot more exposed to going overboard with our spending because we’re ignoring the financial commitments we have. This is just one quick example, but overall there are huge benefits from reacting to money challenges from a place of strong character compared to us feeling shocked and overwhelmed.
Spotting the Silver Line
The other key realisation I had came from a question I asked myself when I was reflecting.
“In this time where it feels like we are all losing so much, what have I gained?”
When I thought about this there were surprisingly a lot of things that I had gained. The main thing that I gained was one of the most valuable resources in life – time! Just like money is a resource that we own, invest, spend, give and so on, time is also a resource except this one is a lot more valuable than money. Sometimes we forget that because we trade a lot of our time to get money, but very rarely spend money to get our time back and this makes us feel like money is more valuable than time. If that’s too confusing, just remember that all I am trying to say is that time is very important.
So when I think over this lockdown experience, one physical example of where I gained additional time was in my mornings and afternoons where I no longer had to take the train to and from work. This technically meant I had an additional 3 hrs each day compared to my pre Covid-19 schedule, but in reality it didn’t feel like I had gained this time. I started lockdown by waking up just in time to get breakfast and get to work, and after 5pm I would stop work and casually continue my night as if I had just got home from work.
The challenge I then gave myself, which is the key lesson for this portion, is to be aware of the extra resources I have and intentionally use them. If we don’t do this then they will naturally slip through our fingers without us realising it. It applies to all our resources, time, energy, money, and so on, but let’s look at the example I experienced in realising I had extra time. One of the first things I did was sit down and come up with a plan on how to use this extra time I had each day. ‘Not having enough time’ was always a strong excuse I gave myself for not pursuing some of my fitness goals as much as I wanted, so that was one of the key areas I decided to allocate my time to. I had a plan of doing my cardio on some of the mornings I had extra time, and then my usual workouts in some of the free afternoons I had. I intentionally left some of the mornings to have sleep-ins as I knew that our family would play games a lot which meant later nights, so technically I allocated my extra time to my family the night before. This may sound like I’m getting off topic, but let’s not forget that this journey towards wealth includes better management of things beyond money, and a lot of the lessons we learn about money are applicable in other areas and vice versa.
So if we were to flip this on to money, I technically had an extra couple dollars due to not spending so much on travel costs, which should apply to most of us! If I didn’t realise this and didn’t intentionally come up with a plan for what to do with this additional resource, then eventually it would just slip through my fingers. I don’t need to elaborate on what happens with money that doesn’t have a plan, because most of us understand that money quite easily disappears from our wallets when we’re not watching it. On the other hand, if we intentionally put that money aside to something we love, maybe a little road trip fund for when things open up for example, then the additional resource we have will give us a lot more joy.
To round this all off, it’s only half way through the year 2020 and the world looks completely different. Although our entire environment has changed, we can be comforted knowing that we are not alone when it comes to facing the way we manage our resources such as our money. We can take learnings from these times which will help us in the future, especially if we enter a similar scenario, and our strong character and values will hold us strong when it comes to managing our money in difficult environments. At the same time as feeling difficulty and loss, there can be areas where we find ourselves having more. If we recognise and intentionally manage this extra resource, whether it’s money or time or anything, we will thank ourselves later for making the most of the opportunity.
Key Points:
- Resilient values guide us in any financial environment
- Amongst loss, find and utilize gains
