As we emerge from lockdown and get back to a ‘new normal’ of life, many people are re-evaluating their life priorities. Changing priorities have a financial impact. That’s because the role of money in anyone’s life is to enable them to live the life they want, based on what is important to them.
Everybody has their own individual priorities and for that reason, the way in which one person manages their money may not be appropriate for another. It is not uncommon for couples to have opposing views about spending versus saving or investment risk versus investment return, simply because they have different priorities. Unless these differences are resolved in some way, money issues can tear a relationship apart.
For some people, money represents security. This applies particularly to those who have lived through a financial crisis. In years to come, the 2020 financial crisis will continue have to an impact on those who have suffered redundancy or the loss of a business. Memories of hard times will reinforce the need to have a financial buffer. We saw this after the Great Depression, which resulted in a generation of hoarders, too scared to spend their money.
Some people see money as something that enables them to live life to the max, with little concern about the long term. This attitude can come from an overly optimistic view of their financial future or a view that longevity is so uncertain that its best to spend money before it’s too late. The impact of a financial crisis on these people is not to cause them to spend less, but to rethink what they spend their money on. Many people came to a realisation during lockdown that being able to spend time with family and friends was much more important than buying ‘stuff’.