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How to navigate personal finance during COVID-19

Nearly everyone has asked the following question sometime in the past year: How should I navigate my personal finances during the COVID-19 pandemic? When it comes to personal finance and COVID-19, it’s truly a complex question that largely boils down to individual circumstances. But in addition to general life and work circumstances, so too your mental health plays a big role. For that reason, in this article I’ll spend a good deal of time discussing the pandemic as a whole. And notably, the effects of the pandemic on mental health and how to overcome them.

Turning a corner or doubling back? Managing personal finances during COVID-19 is not easy when the pandemic never ends.

Personal Finance and COVID-19This summer we felt like we were turning a corner. Vaccines were widely available, and businesses started to reopen their fitting rooms and indoor dining rooms. People started buying concert tickets again. Flights were booked. The national parks saw a huge increase in visitors, in many cases causing long waits and crowds. But people were so excited to be on the road again and free to move about the cabin.

I was more than a little excited when party invitations started flowing. Extended family gathered to meet new babies and hug each other. Businesses started hiring and offering signing bonuses.

It felt like we were on an upward trajectory OUT of whatever last year was. I know I thought so. But then the delta variant began. Pockets throughout the country refused the vaccine. Businesses were unable to hire people, and the appropriate level of masking and gathering, even for vaccinated individuals, became complicated. Children under 12 still cannot be vaccinated.

Everyone is reluctant to return to social isolation after summer gave us a taste of freedom and togetherness. Worldwide, another shut down is politically unlikely. Some are angry about returning mandates. Others are left worrying about the new variants that will surface if we don’t tighten up again. A growing subset of the population is ignoring the news and just hoping it will go away.

Political lines are drawn, and we’re exhausted from debating which rules best keep everyone safe. It’s enough to make you feel like last year all-over-again!

“Mom, are we theeere yet?!” On pandemic fatigue.

I was commiserating with a friend the other day about how we were still carrying through plans we made early in the summer when we thought by this point, things would be a lot better. Sometimes we feel a prickle of hesitation that tells us big gatherings, even outdoors, might be part of the problem. On the other hand, we want to get our fun in before inevitable closures this winter.

People who have been cautious feel like they are missing out on the window to loosen up. Individual actions feel like a drop in the bucket. It’s hard maintain restrictions when we’ll all suffer the same consequences.

And perhaps worst of all, for many it’s been a time of great financial challenge. From pay cuts and layoffs, to economic challenges straddling small business owners, to rising inflation, and of course the rising cost of living (has anyone else seen home prices lately?!) it seems like there’s no end in sight.

But as usual, and as always – there is hope. As with most things in life, there are certain things within your control and others that are not. By focusing on those things we can control, we can maintain power over our financial destiny. This is true even despite the current challenges brought on by the COVID-19 pandemic.

Personal Finance and COVID-19: Reasons for Optimism

Last year, our primary goal was to keep people from dying from COVID. We were wondering when a vaccine would be available and how effective it would be. When Pfizer and Moderna released their shots, they were more effective against infection than expected. A study in October by the NIH suggested that a vaccine that is 60% effective would be enough to stop the pandemic if 100% of people were vaccinated, or 70% for 75% of the population. Shortly after this study, the two RNA vaccines with higher than 95% protection were released. People’s expectations went from optimism that we could slow down the death rate to feeling invincible.

We were so ready to have our silver bullet, to be past the lockdown, that it got a little nuts. And of course, there is no physical indicator that proves you are vaccinated. Those who chose to skip the jab dropped the mask in public spaces, too. Counterfeit vaccination cards arrived along with restrictions meant to keep people safe for travel and concerts. At the grocery store, 95% of shoppers were maskless, but I knew the percentage of vaccinated adults in my area was much smaller.

Talking about success

The outbreak in Provincetown in July was a wake-up call that even the vaccine cannot completely defeat the delta variant. Those skeptical about the vaccine used this as fuel for why it wasn’t working. But the big take-away for all those vaccinated people who contracted Covid was that few of them were hospitalized—and none died. Against our yardstick for success a year ago, this is a huge success!

Not only is this good news for the economy and business as a whole, but it’s also good news for jobs and individuals. From a personal finance perspective, we truly have much to look forward to at this stage. Good personal finance and COVID-19 don’t necessarily have to be mutually exclusive.

How the Fear of Isolation can undermine mental health

Those who felt a toll on their mental health after last winter’s lockdown may be worried about a repeat season of isolation, especially if you are immunocompromised. You may feel like you are losing control now that we are seeing the pandemic is not likely to end as quickly as we had hoped. You may still be grieving someone you have lost during the last year, or have concerns that your livelihood will be affected.

This is not last year. We are starting from a different place.

Get the vaccine if you can. We have new data about how effective masking is, especially in schools now that a large portion of the country’s children have spent several weeks in school under various masking rules.

Know that your feelings are valid. The lockdown was a true crisis situation for people who struggled with mental health issues last year. Isolation is terrible for those struggling with eating disorders, addiction, or self-harm. Because so many struggled last year, today there are many robust options for online therapy, like Betterhelp and Talkspace.

Renew your commitment to bettering your personal finances, spending, and budget. No matter where you’re at financially, this is a fantastic time to revisit your personal finances. And doing so will give you a confidence boost that has a positive effect on your mental health.

Also, resources abound for coping with the aftershocks. And if you are more comfortable with in-person therapy, many providers are now more open to meet with patients because they have the vaccine now, too.

Where is the Office Anyway?

When a job migrates from the office to home, it can be a godsend. This is actually one of the nice effects COVID-19 has had on personal finance. Fewer expenses, skipping the rush hour traffic, and breaks on the couch with Fido. But for those who live alone or struggle with mental health, your feelings might be mixed. You are grateful for keeping your job when others aren’t so lucky. But a lack of routine may change your enthusiasm about the job.  Without daily interactions with coworkers, the day drags or you feel unseen.

Working from home requires intentionally differentiating your time. Now that everyone knows how to zoom and work off-grid, it can be hard to draw a line between work time and relaxation. One of the most important things you can do if you return to or remain working from home is to establish a routine.

Get up at the same time each day. Make time for coffee and exercise. Spend some time outdoors each day. Remember why you liked your job in the first place, and if you are drawing a blank or just feel like another environment would benefit you, start searching for a better fit. Employers are eager to hire right now and that gives you negotiating power. If you would be great at a job, but want to work remotely or need specific hours, they may be willing to work with you. And if a better fit right now means getting out of the house, there are plenty of employers who want on-site employees too.

Forming good habits, establishing a routine, and taking control of your career are not only great steps for your life in general – but also for your wallet.

Personal Finance and COVID-19: Small Business Owners

Business owners have been through a lot this past year, and many were optimistic this summer that things were returning to normal. You were the front line that dealt with supply chain issues. You and your employees bore the brunt of rudeness from exasperated customers when entire shelves were empty.  Enforcing ever-changing mask rules and keeping employees and customers safe took over your focus.

If you employ people that are in contact with the general public, this season of pulling back again is especially hard. You are holding on and trying to maintain business-as-usual, but now the public is afraid again.

But this time, consumerism seems less-daunted. After 2020, people are ready to spend again. Bank accounts are healthy, and while spending really stalled in March of last year, in consumer’s minds, the delta variant is an eye roll more than a run-on-the-bank kind of reaction. While this may be problematic for public health, the fact that people are hesitant to go back into lock down mode could be cause for optimism for those trying to run a business.

Has the pandemic been an economic boon or burden for you?

While a huge demographic was hurt economically, most Americans came out on the other side with money in their pocket and eagerness to spend.

To those returning to the stores as a customer, lead with kindness. Your local businesses are struggling to maintain staff. There aren’t enough school bus drivers, and only one check out lane is open at the grocery store. Be nice to those who showed up to work today.

It is so easy to project our anger over the ongoing pandemic at those who appear that they aren’t being careful. Or to play devil’s advocate, at those who are putting the economy and mental health at risk because of a disease that policy can’t control. No matter how you view the issue, Beth in front of you at the store is not responsible for what is happening. We have to stop waging this war against each other. Even if you don’t receive kindness back from everyone, know we are each facing our own challenges. Be assertive with your needs, but willing to make room for others’ needs too.

Nostalgia for the past

Sometimes I hear the lament that this is a particularly bleak time. Unique and awful.

In addition to a pandemic, America faces the messy ending of time in Afghanistan, still grapples with racism at home, and is navigating the best way to tackle global warming among frayed international relationships. Not to mention the effects on personal finance from COVID-19.

In a study done prior to COVID, different generations were asked about the most significant historical events of their lifetimes. Of course they had different perspectives. September 11 was the most unified response across all groups, but the Silent generation would include WWII and Baby Boomers included Vietnam, while Millenials and Gen X were more likely to include school shootings. Each generation has faced unique struggles.

The civil rights movement in the 60’s made a huge impact on how we view race relations. While we have become more politically correct as a society, the past few years have spotlighted the inequalities that still linger. Though not overt, some groups still enjoy advantage based on the color of their skin.

The technology revolution allows complete and instantaneous sharing of news, which means that anyone can amplify their voice. Even 25 years ago, it was hard for Joe-down-the-street to reach a platform of thousands of people. Of course there are pros and cons to an open stage.

It’s hard to escape the noise and disengage the dialogue when our minds and souls need a break. It’s exhausting trying to differentiate what is true and worth our time, and posts that seek to bait us for money or publicity.

Still I have hope, even despite the how COVID-19 has impacted personal finance and every other area of our lives.

During the Spanish Flu in 1918, there was little information about infectious diseases. The morbidity rate was about 28%, and nearly half of those deaths were people between the ages of 20 and 40. Because it coincided with WWI, countries were hesitant to share information about the death toll (or any ideas to combat it) with other countries. A large percentage of doctors were already off at war, which made the shortage of medical help even worse.

Today, we don’t have perfect science, but we do have knowledge to help us lessen our risk. Collaboration from scientists all over the world gave us quick access to vaccines and data to create policy decisions. While distribution has been far from perfect, the fact that countries internationally are working together to combat the problem is a big step forward from last century.

Lessons learned through the COVID-19 pandemic

The same technology that exhausts us with news has also allowed us to carry on business as usual. This is true in many industries,  at least, saving our economies from complete shut down. Remembering the recession of 2008, people panicked when businesses closed for COVID. But the market did not go into a long recession again. Though it was a different kind of catalyst, the Fed learned some lessons from 2008 on how much free-fall the market could handle. While we faced a large economic downturn at the beginning of the pandemic, the market bounced back.

Women and minority groups were hit hard in early 2020, which put a spotlight on how certain groups are left behind when there is a crisis.

While we have seen our government struggle to help people facing poverty during other natural disasters, for example Katrina, we could sympathize with the challenge of the response. We said, with so much devastation, it’s logistically impossible to get aid to them. The building back is slow because of the infrastructure damage. No one could have foreseen a hurricane of this magnitude. And in some cases, blame for the victims: They should have left when they knew there was a disaster at hand.

Moving past the “great divide” in America

With COVID affecting all parts of the country, the inequalities and societal response is harder to justify. On one side were the people who lost their jobs or had to keep things running at the risk of their own health. And then the legions of middle and upper class who were able to work from home with few other changes. Clearly, we saw the haves vs the have nots. And yet, those at the losing end were criticized for not wanting to do their jobs or not carrying out their end of the bargain.

While the recovery continues to be uneven, we can no longer deny that the divide exists. The past year amplified that we all suffer when a large portion of the population is at risk for economic ruin, living in close quarters, and unable to take time off for their health.

Support around women’s issues and racism became mainstream. Corporations are making policy moves where politicians are inconsistent, not only with regards to people but other issues for the greater good, such as environmental. Investors are more aware of social impacts and companies who appear to treat employees unfairly. We started to see lack-luster IPO’s when the public neglected to rush in and buy stock from companies with questionable leadership.

When the world seems divided, remember some of that dialogue is because more people have a voice. When some groups are silenced, it can feel like unity, but not everyone feels safe.

Personal Finance and COVID-19: Let’s Focus on the Here and Now

It’s so easy for the news to paralyze us, and for everything we see to make things seem terrible. Therefore, it’s so important for your mental health to pay attention to what is going on around you.

Simple meditation is something you can do at home to calm your mind. Take your focus away from the media noise. Ground yourself by basking in the present.

Many of us found connection and restored faith in humanity based on the kindness of strangers and collaboration that was necessary early in 2020. People came up with thoughtful solutions. Even while some hoard toilet paper, others help ensure their neighbors have access to supplies and volunteer to help strangers with shopping.

Moving forward and staying positive

Those people are still out there. Step back and look at your day to day interactions. The ones you have control over. Working from home and isolating ourselves from social interaction can be dangerous. This is especially true with the news ever-present these days. Believe the things around you that you know to be true. The love of your family, the kindness of your neighbor who picked up your mail while you were out of town. The smile (or at least the one visible in their eyes since they are wearing a mask) when someone at the grocery store tells you to go ahead of them.

These occurrences are not anomalies. They are reality.

And remember, too, that staying “present in the moment” is not only good for your mental health. It’s also helpful for your wallet! By staying present, you can make better financial decisions and keep more control over things like impulse spending. This is just one of the ways we can make personal finance and COVID-19 work together.

Closing Remarks

I want you to get through the pandemic with your physical, mental, and financial health. If you have any questions or need support of any kind, please do not hesitate to reach out to me directly at [email protected] or through my contact page here.

Tammy Lally

Tammy Lally

I BELIEVE MONEY IS NOT YOUR WORTH. Tammy Lally is an author, speaker, and Certified Money Coach (CMC). She helps others master their finances by first conquering their emotions around money, then by creating a comprehensive financial plan. She brings decades of experience and endless love to her bulletproof process for money mastery. She is the author of the book Money Detox, and her TED talk on Money Shame has over 2 million views.

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