Financial needs and wants in a post-COVID-19 world

The COVID-19 pandemic has undoubtedly changed the world as we know it. And, while this event is first and foremost a public health issue, other clear and significant issues have also emerged for many of us, be they economic, financial, physical, mental and/or emotional.

While there appears to be some light at the end of the tunnel, and restrictions are gradually being wound back, uncertainty and caution remain—which is an understandable human response.

What we have experienced, and continue to work through, is something truly unique in terms of its overall size, reach and impact. The world grounded to an almost halt, and we were placed in unfamiliar and surreal territory.

What we do know, these changes have affected us on many levels, both temporarily and in some cases permanently. Our strengths and weaknesses, our opportunities and threats, and our values and priorities have been tested. And, with this, some things may revert back to normal, and others may not.

Although there have been many negatives from this event, perhaps one positive has been the opportunity to pause and reflect. By doing so, we have gained insights and learnt lessons about ourselves, which can be used to move forward in a positive direction.

From a habit forming perspective, this event has disrupted many of our existing context cues and created a window of opportunity to make decisions and implement new intentions and goals (and form new desirable habits).

If we relate this back to an area of personal finance, over recent months, one area we have all likely become more aware of is our spending habits, especially in terms of our discretionary costs. Social distancing, isolation and restrictions have impacted our mobility in several key areas.

Many of us have seen a reduction or loss of our earnings. Or, we have become more cautious with our spending, despite having not experienced a reduction or loss in our earnings.

These things have certainly impacted who we spend our money on, what we spend our money on, where we spend our money, when we spend our money, how we spend our money, and finally, why we spend our money.

For many of us, this event has brought the focus back around greater understanding and awareness of our existing spending on both obligatory and discretionary costs. It provides a platform from which to better distinguish and balance between our financial needs and our financial wants.

It also offers a greater appreciation of our earnings and spending, and that it’s possible to find joy and balance in things and experiences that cost money, and those that don’t.

In a nutshell, yes, these last few months have been difficult, however, this event has allowed us to gain insights, and learn lessons about ourselves. These insights and lessons can be used to move forward in a positive direction.

After reading this article, you may also find the following of interest:

If you have any questions regarding this article, please contact us.

This article has been adapted from the original article posted on The Wealth Mentoring Group’s Financial Knowledge Centre on 12 June 2020.
Photo by Brian Gordillo on Unsplash

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