I’m just back from my first vacation since the start of the COVID-19 pandemic.
Starting on Canada Day and running until this past Tuesday, for a total of 6 days I changed the channel on life and spent my time visiting museums, eating out, and swimming in Lake Ontario, all in the company of family and close friends.
Like a lot of people, I didn’t realize how much I enjoyed the company of others until it was all taken away so abruptly last year.
On Tuesday afternoon, while enjoying a lovely lunch on a patio in Picton ON, I paused for a minute and took in the scene. Here we were, a group of friends who haven’t seen each other since the summer of 2019, sitting maximum four to a table, outside of course, wearing face masks, signing contact tracing forms everywhere we went, and just loving the fact that we could be together.
Two thoughts occurred to me simultaneously; it felt so strange, and yet so right.
And then a third thought, in 2021, this is what we call ‘normal’.
I’ll be honest, I hate the phrase ‘new normal’, but I can’t really come up with anything else that adequately expresses the reality we find ourselves in. The world is never going back to the way things were in 2019. Some things, like movie theatres, live sporting events and indoor dining will return, hopefully sooner rather than later. But facemasks, open spaces that encourage social distancing and the signing of contact tracing forms may be with us for a long time.
As things reopen there is another aspect of normal that I think could stand a bit of adjusting; the way we look at, plan for, and manage our spending on non-essential items.
According to Statistics Canada, in the second quarter of 2020 consumer spending fell off a cliff. There was nowhere to spend your money. As a result, household financial assets have been steadily increasing ever since.
With most travel, entertainment and other non-essential businesses closed people have been able to turn their money toward debt repayment, investing and home improvements. That’s a good thing.
The government has done its part by keeping interest rates low and flooding the market with cash for those who lost their jobs due to the closures.
But now, with low interest rates, pent-up demand, and ready cash, it’s starting to look like a perfect storm. Now that things are starting to reopen there is a real danger that, for many, the temptation to over-spend may be too great. Check out this article from CTV News for a sombre take on what reopening might mean to some household balance sheets.
Getting on and sticking with a budget is key to achieving life long financial security. Budgeting is never easy and coming back from almost 2 years of restrictions and lock down I understand the desire to make up for lost time, but the fundamentals haven’t changed. You still need to be mindful of both sides of your balance sheet.
As things open back up and we all start to get back out there, tell me what your summer plans are. I hope to see all of you in person again soon.
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