COVID-19 And Impact To Our Finances
COVID-19 has had far-reaching effects. It has significantly affected the global economy, with January to March 2020 delivering the stock markets’ worst quarter in over 30 years before starting a slow recovery. These large-scale impacts have meant very human implications for our daily lives. The Australian Bureau of Statistics found in the month leading to September 2020, the household finances of 21% of Australian families with children worsened, with 19% of Australians having to draw on savings, reduce home loan payments or similar in order to support basic living expenses.
Financial stress has very tangible effects, with increasing links being drawn between its influence on our mental wellbeing, quality of sleep and our energy levels. While more money does not guarantee happiness, having enough for our basic needs, enjoyable activities and rainy days provides us with lifestyle options, and in turn promotes our emotional wellbeing.
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Embracing A Different Christmas
You’re not alone if the idea of Christmas makes you feel overwhelmed. The 2019 Australian Christmas Attitudes Survey found that the top cause of stress over this period is financial stress - and this finding was consistent across all income levels. Further, have you ever looked around after Christmas at all your presents knowing you won’t ever use them? If so, you’re not alone, with 80% of Australians believing they consume significantly or much more than what they need.
Christmas in Western society does carry connotations of excess. With COVID-19 and its associated restrictions having turned 2020 into a season of forced rest and blank calendars, there are reports of people gaining new insights into the benefits of living in a more measured and intentional manner. This holiday season, it may be worth considering to plan for a holiday season that leaves us refreshed and financially ready for 2021.
1. Do Your Christmas Traditions Now Reflect Your Values?
Many things surrounding Christmas are based on traditions, whether they be traditions that carry the weight of history or simply family traditions. Give some thought to why you participate in the tradition of gift giving, and whether it is something you wish to uphold.
Do you engage in buying presents because it’s the done thing, or because you feel you need to keep up appearances? If so, you may wish to discuss with your family or friends how you can create new traditions you value. Alternatively, you may love giving gifts because it brings you a lot of joy, and psychology experts agree that cheerful gifting does have neural and emotional benefits. If this is you, being conscious of this can heighten your enjoyment of the gift-giving season.
2. Mindfulness & Intention For Your Holiday Season
Organisations create mission statements, and business projects have key outcomes because they set clear guidelines for future behaviour. While it may sound clinical, taking time to think about setting intentions for this Christmas period and how you are going to spend your money can help to guide decision-making.
In years gone by, it’s likely your calendar tends to magically fill up with social occasions. Yet, have you ever really thought about how you might like to spend your time, or how you would like to feel at the end of the Christmas season?
This year, you may wish to come out the other end in a position to reach your financial goals for the year ahead, instead of being financially depleted and dreading January’s credit card statement. This may mean saying no to some social occasions with acquaintances - for which you would otherwise have to spend time, money and energy on. Having clear priorities can help to reduce mental stress, and provide a sense of accomplishment when you act in line with them.
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3. Intentional Spending
Do you work to a set budget? If so, does it align with your values and priorities? While it would be difficult to go through this season without spending a little more than usual, we can take steps to make sure our spending is aligned as closely to our values as possible. For example, if promoting sustainability is important to you, you could suggest a ‘buy nothing new’ theme for Christmas presents. An element of a challenge provides extra interest, and chances are that your sister will love the cute tea set you found in an op-shop.
Research conducted in 2019 by the Financial Planning Association of Australia found that 65% of Australians prefer to receive practical and useful gifts over personal or unique gifts. Further, when asked to choose two preferred ways to celebrate a special occasion, 61% chose quality time as a first preference, and 39% chose an ‘experience’ as a second preference.
A 2016 study provides the psychological explanation for these survey results, while exploring the notion that gift givers and receivers have different views on what makes a gift a good one. Givers often focus on the moment the gift is given, and take surprise or delight to be markers of success. In contrast, receivers find value in gifts that will bring them joy or be useful during the period of ownership.
These findings support the view that we can place less pressure on ourselves to find the ‘perfect’ gift, and instead focus on something more practical or experiential. For the health-conscious friend, group sessions at a rock-climbing gym could be a better present than sports equipment they may already own. If money is a little tighter this year due to job losses or business closures, these findings could also support a crafty Christmas that can help to lower the costs, as many practical gifts such as candles, plant cuttings or food items can be made instead of bought. Or perhaps gifts could be foregone altogether in favour of building memories. A nice meal and generous tip, or a road trip away with loved ones would not only be excellent ways to build new memories, but also to support industries that have been heavily affected by the COVID-19 restrictions.
Whatever your financial situation or goals, taking time to consider your values and how you can spend in an intentional manner will set you up for a calmer and more centred Christmas season.
References
Coronavirus: A visual guide to the economic impact | BBC News
Household Impacts of COVID-19 Survey | abs.gov.au
Australian Christmas Attitudes | glowfeed.com
Why Australians are caught up in consumerism | mccrindle.com.au
There's an incredible upside to this pandemic, but no one's talking about it | bodyandsoul.com
5 Ways Giving Is Good for You | greatergood.berkeley.edu
What’s Your Family’s Mission Statement? | hbr.org
Creating Financial Wellbeing Through Mindfulness | SoulAdvisor
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