We all have our own money story; we call this our relationship with money – this is shaped by our values, history, what our parents and grandparents taught us, experiences and general money habits. As Covid-19 has hit hard throughout the world, it may be a good time to sit back and try and understand what our relationship with money is, and whether or not this has changed over the last few months.
Do we have money habits that have been shaped by our history? Will these habits enable us to become financially free, or will they steer us into a never-ending money trap?
What if I told you six months back that Covid-19 was coming in 2020? That the stock market would be down 35%, and your salary would be cut by 20%? Would your money habits have changed, or would they be the same?
We’ve had numerous discussions with clients around this topic. On the one hand, clients have had to completely review their money habits – they have done a complete 180. On the other hand, we’ve had clients who have been unaffected, because they have ‘prepared’ themselves for black swan events such as this; they have not overextended themselves and know about every cent that goes in and out of their accounts.
In a time of panic and uncertainty, as is the case now, it’s extremely important that you go back to the basics and do a quick reflection about your own money habits. This will be different for each one of you, depending on which phase of life you are currently in.
Here are five tips to help you manage your money during this time:
We are living in a time of chaos, and it is uncertain and uncomfortable for us all, but by understanding our relationship with money and tweaking our money habits (or even keeping the same), we can ensure we get through this pandemic stronger, and wiser.
Chartered Wealth Solutions is an authorised financial services provider
(FSP no. 13909)