The COVID-19 pandemic has reshaped our lives in unprecedented ways, forcing us to live closer together with some people, rely on video conferencing to connect with those who live further away, adjust our spending habits and even reevaluate our retirement hopes and dreams. And as we enter the waning months of summer, kids are going to school virtually, businesses are still shut down and many of our offices have yet to welcome employees back—bringing untold financial stress to millions of Americans.
But let’s take a moment and examine how COVID has changed our relationship with money. And before we answer that question, maybe we should ask this one:
Do I have a healthy relationship with money?
It may seem like an odd question, especially if you’re one of the 18 million currently unemployed, but understanding the link between money, happiness and well-being could prove invaluable. This is especially true since our relationship with money may be healthy or unhealthy.
How we regard money is a function of thoughts, beliefs and emotions formed since childhood. Often, we deal with money in the same way we deal with relationships.
If we are careless in our relationships and our behavior, our finances reflect the same lack of care.
Money Fights = Divorce.
A study by Jeffrey Dew, a Utah State University professor, quantified the link between money-related tensions amongst couples and the risk of divorce. Money fights are the second most common harbinger of a breakup. Couples who disagreed about finances once a week were over 30% more likely to get divorced than those who argued over money a few times a month.
But money and wealth are not the same. Money is a physical or electronic currency that may be spent immediately on goods and services. Liquid money is a component of wealth, but wealth includes assets that are not liquid and not immediately convertible to spendable cash.
How often do we read of the rising Hollywood or athletic star destroyed by drugs and alcohol? Whether born of insecurity, narcissism or some other need, money may be the fuel that fires destruction. Conversely, some are loving, caring and giving, some with wealth and some with little, who are happy and well-adjusted, leading meaning-filled spiritually rewarding lives.
Why We Pursue Money
People do not pursue money for its own sake. Money represents other things. It may be power, a means of control, the satisfaction of competitive urges (“the one who dies with the most toys, wins”). But the most basic role of money is security. You want to know that you can meet your everyday needs and those of the people you love and care for.
A certain level of available money, along with no debt or manageable debt, allows one to sleep at night. Your first task in personal planning is building a healthy financial cushion, managing debt sensibly, with insurance safeguards in place relative to property, liability, health, disability and death.
Let’s Talk
Concerned about your relationship with money? Reach out to us to schedule a time to discuss your questions and concerns. Why wait to ensure you’re on the right path towards a healthy retirement?
