Let's set the record straight: We are all in this together but we are all experiencing things differently.
The experience of the families sequestered at their cabins is different from those of the families facing potential eviction from their apartments. High-density urban areas are not the same as low-density rural locales. High health risk individuals need to take more precautions than those necessary for lower-risk people. But we need to remember that pain is pain, and each and every one of us are suffering through some kind of transition.
We know that transitions have beginnings, middles and ends, but they don't always occur in that order. In fact, they usually, but not always, start with endings. The middle is where we suffer from the disequilibrium of what is next until we find that new beginning.
Right now, many of us are in this uncomfortable state where we don't know when things are going to be different, we are sick of where we are, and we don't have any idea how things are going to turn out. How do we pull ourselves out of it?
In his book, "Life is in the Transitions: Mastering Change at any Age," Bruce Feiler writes, "[The] three key ingredients of a well-balanced life [are] agency - the belief that you can impact the world around you; belonging - the people that surround and nurture you; and, cause - a transcendent commitment beyond yourself that makes your life worthwhile."
These are not equal and at different times in your life one may be more salient than the others. But these three things are going to be how we lift ourselves out of the societal and, yes, to some degree self-imposed morass in which we find ourselves.
In our money lives, let's look at all three:
How we spend
We have agency over how we choose to spend. This is turning out to be a K-shaped recovery in the sense that those with financial assets are generally doing fine, while those without are not. And those with financial assets are saving at high rates for a variety of reasons including fewer things to spend money on and uncertainty about the future.
How we spend is always a choice, though. We have agency over our planning. The biggest question I get from clients is what will the deficit mean in the future? There are a lot of theories, but logic dictates that as more money is spent to pay the interest on the debt, less money will be available for other government provided services.
I suspect this will mean an increase in tax rates. That heightens the value of tax planning this year: gifting strategies, Roth conversions and accelerating income, and tax swapping should all be explored.
Making connections
Belonging means that during this period where we seem to be lacking real connections, we have to make an extra effort to create them.
I was talking to someone who was feeling lonely, but has the ability to work from anywhere. Her friend was expecting a baby two weeks before her husband was to be deployed. I encouraged her to figure out how she can work remotely to be with her friend. It won't be expensive and will be money well spent. We lose our creativity when we suffer from this low-grade depression we are experiencing, but often others can see things more clearly than we can. This is an important time to connect and open-up, even though our instincts are to retreat and close.
Find a way to give
Having a cause gets us outside of ourselves and puts us in service to others. And right now there are a lot of people who need it.
At our company, we increased our charitable match for this period because there are so many nonprofits that are suffering. Even though you are not required to take your minimum distributions from your retirement plans this year, if you are over 70 and a half, you are still eligible to give directly to charity. When you give, you are making an unconscious statement to yourself that you have enough, and this can be affirming during times of uncertainty. But your cause could be simply trying to call others who need a pick me up. There are endless ways to give.
This pandemic is going to end, but an active thing you can do right now is to imagine what you want your life to look like in five years. Write it down, make it a stretch, but not an impossibility. While we are all in this together, how we each come out of it is going to be very different. Make sure you put some thought and intention into the transition process.
Related: In Times Like These, It's a Sound Financial Strategy to Stick to Little Things