The global pandemic of COVID-19 is ushering in a new world order. We can’t predict what this will look like but I am quite certain that, just like 9/11, there will be enduring social, economic, and financial impacts which will cause us all to live a little bit, and perhaps a lot differently, from this day forward.
If you think about it, most of us have been shocked into a new reality simply by the fact we are in isolation at home, a large majority of businesses we frequented are now closed, we can no longer book our next vacation, and our spending has all but dried up to focus on the essentials.
In Canada, we didn’t suffer the deep wounds caused by the 2008 financial crisis in the United States and other parts of the world. As a result, our friends to the south were forced to learn some painful lessons that pushed them to adopt greater financial awareness, prudence and discipline. Now it’s Canada’s turn.
If you have read this blog or waded through this website you will know that I preach about the need to strive towards Financial Independence, not Retirement. In a nut-shell, Financial Independence is when you have built sufficient wealth and can choose to live and work on your own terms. You no longer have to trade time for money.
To get on the path to Financial Independence, you must start to spend less, save more, and invest those funds to build a nest egg of wealth you can draw from in your later years. One of the surest ways of doing this, and no I didn’t say the quickest, is to adopt the Fin$mart money mindset. I recently wrote a blog defining this mindset and professing Fin$mart is the new Frugal.
Now Is the Time To Spend Less, for Good
One of the side effects of social and physical distancing is that you have to make changes to your daily routines. Rather than going to a gym, you may be running and biking outside, taking part in a free exercise class on YouTube, or lifting weights in your garage. Rather than going to events or dining out every other day, you are out enjoying nature, testing new recipes, learning a new skill, or doing a DIY project, such as creating a vegetable garden in your backyard. Some of you may also be developing plans for a side hustle or using this opportunity to start a new business as a solo-entrepreneur. If that is you, welcome to my world!
These life changes don’t need to be a deprivation or a painful period of discontent. Rather, consider it an equalization between your present and future self. By making thrifty, Fin$mart choices today and committing to these choices long-term, you will be in position to save money, invest those savings, and set yourself up to achieve Financial Independence in the future. It is freeing to know that we can all be content with less. In return, you can live life without financial stress and without the pressure to accumulate more from the material world. And for that, Mother Earth thanks you.
Now is the Time To Make a Change
Data doesn’t lie. The majority of Canadian households are severely in debt and living pay-cheque to pay-cheque. According to Equifax, the average household is carrying $23,800 in non-mortgage debt and an average credit card balance of $4,240. It is therefore not surprising that for many workers, Canada’s Emergency Response Benefit will come painfully late because they have no savings and are maxed out on their available credit. Financial stress is unbearable. I know. The good news is that it doesn’t have to be this way and you can choose to make changes today to prevent this stress from happening again. That’s that conscious choice I made in August of 2001 after I suffered a personal financial meltdown.
Now Is The Best Time To Pursue Financial Independence
The COVID-19 pandemic has been a great equalizer – we can no longer say we don’t have the time to make change in our lives. The first step on the path to Financial Independence is to have complete awareness of your financial affairs — everything there is to know about your money — your income, expenses, what you own, what you owe, and all the details in between. From there, you must create a budget that incorporates a saving and spending plan.
Once you have a budget in place, you can begin to make progress on your journey to Financial Independence (FI) by making Fin$mart choices from this day forward — choices in how you earn, save, spend, borrow, and invest your money, and how you can plan for the unexpected.
The first essential savings goal on your FI journey is to establish an emergency fund of at least 6 months living expenses. Having this amount of accessible cash can reduce your financial stress by 50%….I promise. It serves to assist you and your family when you are faced with a personal emergency or sudden drop in income. And let’s be real….a future pandemic or disruptive global event cannot be predicted but it should be anticipated in our deeply, interconnected world.
Whether you are on Day 12 or in Year 20 like myself, you can do this!! Contact me for personalized support…let me help transform your life from uncertainly and stress, to a life defined by empowerment and fulfillment. Lest I say, Fin$mart is the new normal.
Stay safe. Stay strong. We will get through this. We are all in this together.