Restore the Balance - trim your life

Don’t let this be a singular moment in time . I think it’s a lesson of a lifetime. You get to read about such situations only in books or get anecdotal references when someone talks about tough times. Having lived through this lockdown many of you will have a chance to build lives which use this experience as foundational base . Post this experience, like every moment in time we will get two paths going forward. It’s the choices we make which will determine our future. If it is the path of financial stability then we will never have to look back and regret it .

Time and again we have seen , memories or experiences are short lived or so we think . We end up going back to our old ways in no time. Declarative memory, also called explicit memory, consists of the sorts of memories you experience consciously. Nondeclarative memory, also called implicit memory, unconsciously builds up. These include procedural memories; which your body uses to remember the skills you've learned. Nondeclarative memories also can shape your body's unthinking responses, like salivating at the sight of your favourite food or tensing up when you see something you fear. In general, declarative memories are easier to form than nondeclarative memories. But nondeclarative memories stick around more easily. Once you've learned to ride a bicycle, you're not likely to forget. What we will be doing during this time, our responses will be part of our subconscious and recorded as nondeclarative memory.

Social distancing by itself has brought many hardships, melancholic stories, anxiety and lots of adjustments all around. However, if there is one good thing which I am also hearing after a month of lockdown is that how its is saving people from financial perspective. They were going into an endless debt trap; however this has just saved them from being topped over into that chasm.

This could be a function of lot of things coming together, most of us have been able to cut down our non- essential spends drastically. We cannot go to shops, restaurants, bars, food habits have transitioned from eating out every other day to cooking at home. Staying home is saving that occasional coffee at Café coffee day or Starbucks, driving or hailing an Uber/ Ola to work, fuel expenses for self-driven options. Maybe some grocery expense has gone up but that’s okay.

For those of us who have salaried jobs, this would been seeing a little bump in our monthly savings and being glad to see that there is money left over in the savings account.  This must be a huge relief to those who were living from pay cheque to pay cheque and running out of money. It’s a great time to start an emergency fund - like an overnight fund in mutual funds . Best to  automate it or set it up like an auto sweep account where in you transfer some money every pay day and then every weekend. This will prevent you from falling into a temptation of spending and also create a self discipline of cash sitting around earning till you need it .  Time to reexamine all your bills and get out of the late fee’s syndrome and revolver cycle trap of credit cards.

The biggest piece for some of us would be to look deep within and reflect what parts of “normal” are worth going back to. What brings in wistfulness, or what routines in your life before this moment are completely forgettable. If something is not being missed, trim it from your life. Do not go back to it.

Eliminating a few wasteful routines will probably give you a chance to build a strong financial foundation. Maybe practice delayed gratification and save money for micro goals, micro experiences #WIP(Weekend investment plan – 7 days a week) . Next time things go awry, one will not panic. Over a period, one will also witness those little worries at the back of the mind whenever you used to run of money, start vanishing. This will be part of your non declarative memory and will not trigger fear next time there is cyclicality in the market, or you are low on finances.  Delay purchases for what you really want to buy, think , reflect. This will help build muscle memory for the long term and prevent one from getting into debt traps. Our decisions are an outcome to immediacy of consequences hence we take splurge, or do not budget or get into credit card revolver cycles as we cannot comprehend the vague but long-term benefit of financial security. We get up when the alarm rings because you do not want to be reprimanded at work. Our choices are determined by this. We can build a life free of financial worries if our daily building blocks (decisions) are practiced with delayed gratification.

It’s the right moment so seize it - sort out your bills, make a plan to pay off your loans, budget while being locked down.

So the time is now , restore the balance – trim your life.

P.S - What have been your reflections from social distancing and lock down..Would love to hear some views on this