5 Financial Wellness Lessons the Pandemic Taught Us
Spring is jumping. Vaccines are rolling out. And for the first time in a long time, I’m starting to make plans. I will go away with my daughter for a week; I will visit my parents; and I’m planning a couple of dinners. To every friend, acquaintance or person I have only met once and who invites me to do something this summer or autumn: I will be there. (For sure.)
That so many of us are starting to make plans means the economy is looking up: the Federal Reserve chairman said the economy could grow rapidly, and over-banker Jamie Dimon predicts economic blue skies that “will last for years could. “People are ready to go back to restaurants, concerts and bars. People are ready to go shopping (for real clothes!). People are ready to get back on track, and that will drive our economy forward.
But before we all go back outside, let’s take a minute to draw a line under the financial lessons of the pandemic and prepare ourselves financially for the next chapter.
Sallie Krawcheck, CEO and Co-Founder of Ellevest
The pandemic hit some of us harder than others.
So first of all, kudos for making it. We know that women (especially women of skin color) have been harder hit than men in the past year – whether it was job losses, productivity losses due to family care responsibilities, or the need to draw on your emergency fund (or possibly spend more of your credit limit) if you haven’t saved any money).
You did great, even if it didn’t feel like it.
Businesses have found ways to grow and prosper despite the pandemic.
What We Learned: Damn it, stock market. The stock market is now 87 percent higher than its March 2020 low. Who would have thought? (Answer: nobody.) You may have heard that “the stock market is not the economy,” and it is true: the stock market is “forward-looking” and (as we can tell by how much faster it recovers) it is not. t represent what the average American can experience economically at any point in time. Instead, it represents the expectations of a wide range of business growth and profitability prospects.
The fact that even in a pandemic (and for some, because of the pandemic), businesses can find ways to grow and thrive: that’s capitalism in action. And this brings home the lesson that investing in the stock market (also known as investing in these companies) has in the past been a generator of wealth – for some of generational wealth – in this country. (No, that’s not a guarantee that the market will rise in any way every year, but it has historically been on the up.)
But we know that, similar to wage and wealth differentials, there is a gender investment gap, which means that women leave far more money on the table than men. In a future column we will be helping women learn how to start investing.
Financial wellbeing has a moment – let’s keep it that way.
For real wellbeing we need to add financial wellbeing to the old saws of emotional wellbeing, physical wellbeing, and mental wellbeing. It’s often left out of the self-care routine, but lack of finances can seriously affect your well-being. Money is our main source of stress. Measures such as saving and investing reduce this stress.
And nobody, I repeat, nobody needs more stress after last year.
It pays to look at our careers with clear eyes.
A fourth thing we learned: we know more about the character of the company we work for. Has your company adapted to your need for flexibility? Has it helped its employees work in a way that worked for them? Was it flexible with free time? Has it continued to drive diversity? Has it created fearlessness to take career steps? Yeah, now you know. Maybe it means you want to work there forever, but maybe it means it’s time to move on.
And if you’ve been one of the many women who left the workforce in the past year (many of whom were laid off; others had to leave to care for children or a family member), remember, there is still hope. When the economy recovers, we hope companies hire at higher rates.
Money can be the power to live the life we want.
The final lesson, as one Ellevest community put it, “If you don’t control your own money, you don’t control your own life.”
Let’s fix that before we get out there again.
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