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Personal finance and COVID-19 economy thoughts from Jessica Willis, founder and CEO of Pocketnest
COVID-19 may be defining a new generation. It's probably also defining—or, redefining—your finances. That's why we're sharing some non-mainstream thoughts about COVID-19 and its implications on younger generations.
Beyond the media hype of short-term impacts on the general economy, we suspect COVID-19 will have an impact on the financial behaviors of younger generations. But, we don't necessarily think those new behaviors will be bad.
Consider the Greatest Generation and the subsequent Silent Generation, both of which lived through the Great Depression. Their life experiences resulted in deep-rooted, fixed-financial habits. The Great Depression defined these generations as thrifty, frugal and never-wasteful. In retrospect, these aren't terrible characteristics to embody, considering the market fluctuations over time.
As I write this, I picture my Grandma (pictured below) hand-washing and air-drying every single ziplock bag—regardless of its prior contents. She was raised to watch her pennies, be resourceful, not waste anything that still functioned, and plan for all possible scenarios. Yes, that's her, bathing my dad in an outdoor tub.
The Greatest Generation and the Silent Generation lived through the major financial crisis of the great depression during their formative years. In doing so, they taught themselves extreme financial conservatism and developed a habit to save and plan for the future. They typically kept more cash on hand than generations after them, and could be considered better recyclers (well, reusers) than most of us. With that generation as a template, or a proof point, in mind, there's hope for how we, and especially the younger generations, will resurface from the COVID-19 crisis. I believe our future generations will come out of the COVID-19 economy with an awareness of why personal financial planning cannot go unchecked. Perhaps we will remember the importance of being financially fit, strong, and stable planners. Perhaps among all the uncertainty, we may establish better financial habits. And maybe, just maybe, this crisis can bring about some good.
For more financial wellness tips and tools, see the below resources:
401(k) Tips During Financial Insecurity How to Think about Your Investments During a Crisis
Podcast: Building Resiliency and Financial Stability During COVID-19
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