Routines are important in all aspects of our lives from fitness routines to sleep routines and work routines. Psychologists warn that getting out of a routine can create stress and inconsistency.
The current pandemic, without a doubt, has thrown nearly all of us off of our regular routines. Where and how we work is different. When and where we eat and exercise has also changed. And potentially with all of that disruption comes unhealthy changes in sleep and consumption patterns.
The key is to get back to a routine, even if it might be somewhat different than the routine you had before anyone had heard of COVID-19. This includes a routine of saving money. Many people's financial plans and savings routines were severely disrupted as a result of COVID-19 and the related shelter-in-place mandates, shutdowns and layoffs. Getting back to a routine requires a firm commitment to do so. Just like it's easy to get out of the habit of exercising daily and then hard getting back to it, it's just as difficult to get into the habit of saving regularly.
Now is the time to assess where you and your family are financially and where you would like to be in three months, six months, one year and five years down the road and then create a plan and timeline for meeting those goals.
Tips for restarting successful savings routines include:
- Do a reality check. How bad are your finances? Have you maxed out credit cards? Are you delinquent with lenders? Has your savings account been depleted?
- Identify priorities. Start by paying down those credit cards with the highest interest rates and the loans that are the most delinquent. If possible, consider consolidating debt with a lower interest financial vehicle, such as a home equity line of credit.
- Develop a realistic budget. If your income is less now than before the pandemic, you may need to adjust how much you can save, at least short-term. If you're too strict, you are more likely to give up on your goals and fall back into bad habits.
- Create a plan to meet the new budget. Schedule "payments" to your savings and retirement accounts the same way that you would schedule payments for a home or car loan or utility payment. If possible, consider direct deposit so that money is taken out before you realize it's missing.
- Remain steadfast. While it's okay to treat yourself sometimes with special indulgences, you need to commit to regular savings payments.
- Find other ways to deal with the stress and depression of the pandemic. If you had been spending money as a way to break through periods of sadness and anger, identify healthier options. Mental health professionals suggest minimizing news feeds and screen time. Do simple daily exercises which are good for the mind and body, and they're free! Stay in touch with loved ones, even if it's virtually. Try out biofeedback and controlled breathing exercises to alleviate anxiety. And get healthier. This means eating right, sleeping regularly and avoiding excessive tobacco, drugs and alcohol.
- Seek professional help. If you are struggling to get back on track on your own, don't be afraid to reach out to professionals. If you're feeling breathless or overwhelmed, or if you're having difficulty sleeping, concentrating or getting work done, you may want to talk to a mental health counselor. If you're not able to stick with a viable financial plan, consider calling in a financial planner or financial services expert. Sometimes it takes an outside perspective to identify solutions that may be relatively easy to implement.
- Work on building an emergency savings fund. Some people were in better shape financially than others when the COVID-19 pandemic struck. A second wave of the virus and resulting shutdowns could again compromise financial plans. Or the threat could be something completely unforeseen. Regardless, you will be able to weather the next rainy day - financially and mentally - if you have a surplus to tap.
For more help with building savings, visit our financial education center.
The information and recommendations contained herein is compiled from sources deemed reliable but is not represented to be accurate or complete. In providing this information, neither Cortland Bank or its affiliates are acting as your agent or is offering you any tax, accounting or legal advice.