What a Year
What a Year.
How did you manage? What did you learn? What are you bringing with you into 2021?
2020 was tough. Emotionally. Mentally. Physically. The pandemic has definitely taken its’ toll on my emotional and mental well-being. Not being able to freely walk around, see friends and family, and be constantly mindful of the people around me has really made this quite the year. It’s definitely been hard, but I think after all of this, there are probably a few things that we’ve learned in regard to our finances.
Here are a few things to bring with you into 2021.
- We don’t need a lot to live. I think for the majority of our coaching clients, the thing we hear the most is that the pandemic really taught them about the most important things in life. It wasn’t about the car they drove, the clothes they had in their closets, any other material object they once had, or even going to get their hair done bi-weekly, we’re surviving without all of it. There are always going to be things that we like to have. But when you really get down to the nitty-gritty of it, we don’t truly need a lot to live. Head into 2021 by taking a good hard look at your finances, cut out those things that may not be bringing you joy, and focus on those things that matter most to you.
- You can manage your cash flow, regardless of your financial situation. This one was SO interesting to me. We had a number of coaching clients who had joined us back in February, and then lost their jobs because of the pandemic and had to take a paycut or live off of the CERB. And guess what? They still managed. By working one-on-one with our coaches, our clients were able to re-work their budgets and focus on the priorities of putting food on the table and a roof over their head. It just goes to show that it’s not the money you make, but the way you manage it.
- Pay off your high-interest debts – ASAP. Being in debt can be hard. Being in debt during a pandemic can be even harder. But I hope (if you were one of the 1000’s of Canadians who had debt before the pandemic) that you had some ah-ha moments. Our coaching clients certainly did. Always pay off high-interest debts (above 5%) every month, or as fast as you can. Nobody knows what’s going to happen in the future, and I think the pandemic made a lot of us realize that our finances are not finite. Manage your income, dollar by dollar, and get out of the weeds when you have the ability to.
- Have money set aside for an emergency fund. Remember how we always talk about having 3-6 months of necessary living expenses in an account that you can dip into for emergency purposes? I’m sure that really came in handy back in March if you were someone who lost your job. Figure out what your absolute necessities are, and keep a 3-6 month emergency fund in an out of sight, out of mind account that pays some kind of high interest.
- Invest, Invest, Invest. Once you’ve gotten rid of all of those high-interest debts (above 5%), you can start to invest. Back in March, I was in the airport heading to Belize when the markets were crashing. I kept seeing them drop. Lower and lower and lower. Do you know what I did? I didn’t sell my investments. No, no, no. This was the opportunity that I’ve been waiting for. Everything went on sale! I maxed out my TFSA, RRSP, and had my partner do the same. To this date, our investments are up over 30%. Now, I’m not telling you to time the markets, because nobody can. But if you can keep costs low throughout the year, manage your cash flow, and have cash set aside for these kinds of opportunities, then you’re all set. Buy low, sell high, remember? Don’t panic. If you’re properly invested and diversified, you’ll never lose all of your money. Yes, it may be volatile, but if you can think of the future, you’ll come out on top.
"Be Greedy When Others' are Fearful and Fearful When Others' are Greedy" - Warren Buffet
At the end of all of this, it’s been really interesting to see our clients throughout this pandemic. Regardless of their financial situation, they’re excited about getting their financial house in order for a healthy and successful 2021.
Are you ready to join them? Sign up for your free Coaching assessment call here. Having someone else to give you a completely non-judgmental and non-biased view of your financial situation may just be what you need for your own successful year ahead. After everything is said and done though, make sure to not take any moment for granted. Hugged your loved ones. Take time away from technology, work, and enjoy every minute.
Happy Holidays and New Year from Enriched Academy