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Two years ago, writing at the outset of the pandemic, I cited a March 2020 New York Times column by David Brooks, "Pandemics Kill Compassion, Too." He warned that, historically, pandemics, unlike other disasters that bring communities and nations together, fracture relationships and social structures.
His warning was justified. The various pandemics he described (going back to 1348) divided communities, were more harmful to the poor than the affluent, and overwhelmed healthcare workers, just as COVID-19 has done in the 21st century. It divided us to the extent that the country couldn’t even agree on the severity of the pandemic.
Now, the focus is shifting from "living through COVD" as a pandemic requiring an emergency response to "living with COVID" as an ongoing health concern to be managed with vaccinations and other strategies. Professionals in fields ranging from medicine to sociology to economics will be assessing its longer-term impact.
Even if I were an economist, there is no way I could begin to discuss the economic fallout from the pandemic in one short article. As a financial planner and financial therapist, though, I do have some thoughts on how COVID will affect individuals' relationships with money.
Many people are coming through the pandemic better off financially than they were when it began. Combine being able to work from home with being unable to spend money on entertainment, shopping, and eating out, and the result is more money in the bank. The chance to get "back to normal" is bringing an upsurge in spending. It will be interesting, though, to see how many of the pandemic-forced habits of frugality continue in the longer term.
We're likely to continue our increased reliance on technology. Two years ago I wrote, "Let’s hope that the technology which allows us to maintain social connections virtually will soften the emotional toll of today’s pandemic." The ability to stay connected via virtual video platforms was indeed a significant advantage. I see us continuing many of the creative ways we've learned to use technology for everything from remote work to telemedicine to reading books to grandchildren.
Finally, one of the strongest money-related lessons from the past two years is how much we had taken for granted. As consumers living in a country with a thriving economy, we were used to assuming if we needed or wanted goods or services, we could go out and buy whatever we could afford.
It didn't occur to us that store shelves might be empty of necessities like toilet paper, that huge container ships would wait at seaports for weeks, or that a shortage of computer components would make it a challenge to find a decent used car. The term "supply chain" wasn't even in our vocabularies. It is now.
It didn't occur to us that ordinary health care – from routine wellness visits to procedures like tonsillectomies or hip replacements, to more crucial care like cancer treatments – might be neglected or postponed because clinics and hospitals were short on beds, staff, and supplies.
It didn't occur to us, either as providers or consumers, that so many jobs in areas like hospitality, food service, and entertainment could disappear.
It didn't occur to us that even well-funded retirement plans for activities like travel, get-togethers with friends, and time with families might be rudely interrupted.
Regardless of whether someone's financial health was bolstered or devastated by their COVID experience, it's impossible to separate the pandemic's financial from its emotional impact. The individual and collective trauma of this experience will affect our beliefs and behaviors around money for years to come.
Rick Kahler, MS, CFP®, CFT-I™, CeFT®, CCIM, is founder of Kahler Financial Group, a Rapid City, SD-based fee-only Registered Investment Advisor.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives
