Our relationship with money changes as we face various financial events. We don’t necessarily approach our personal finances in the same way when preparing for the purchase of a big-ticket item like a house, condo, or car as we do when we feel financially stable and just received a raise.  And although we never could have predicted the effects of COVID-19 on our national economy, there’s no denying that most of us are spending differently as a result.

The Personal Economy Wellness Check

It’s only natural for feelings of anxiety, stress, and maybe even fear to creep into our subconscious spending and savings patterns during times of economic struggle. To that I say, what better time to perform what I call a ‘personal economy wellness check’?!

I know what you’re thinking, ‘not another article telling me what economically prudent saving and spending decisions I should make’ (hard eye roll). This isn’t that at all. You, my darling, are the master of your own finances! You know how much comes in and goes out of your household. You know what are necessities versus ‘splurge’ category goods and services. You know where you can cut back and when to loosen the purse strings. Inevitably, we individually create rules that govern our unique spending habits and, as is to be expected, experience the effects when we honor or break those self-imposed rules.

This wellness check is an investigation of how you respond to moments of financial difficulty and finding ways to prevent the three amigos (stress, anxiety, and fear) from controlling your personal economy. 

Your Personal Economy Adjustment Style

Whether it’s a pandemic like COVID-19 or the dot-com business bust of 2001, you’ve likely come to know your personal economy adjustment style during an economic downturn. Most of us begin saving more and spending less. Hard hit by COVID, America’s national savings average was 33% per household (a rate not seen since 1975) by July. But not all of us are saving aggressively and that’s OK too! We all fall somewhere on the fiscal responsibility spectrum of these financial adjustment personalities: Penny Pincher, Spencer Spender, and Moderate Marley.


Penny Pincher

Whether forced by circumstance or motivated by personal habit, Penny Pincher jumps into action in the early stages of economic difficulty. Penny performs a budget review of all current expenditures to determine where to make a variety of drastic and moderate spending cuts. Depending on market impact, this personality may also redirect a regularly dedicated amount of funds into savings vehicles such as bonds or high-yield savings accounts. 

 Current economic climate reports and future financial forecasts are the North Star of this adjustment style. Sometimes Penny is swayed to and fro by doomsday reports that at times proven to be inaccurate in the long run. As a result, Pennys can feel overly taxed and needlessly stressed throughout an economic slump. The comforts of a financial cushion to withstand the storm provide the solace this personality seeks.


Spencer Spender

Spencer Spender, on the other side of the personality spectrum, leans into the dopamine release of the BMW (body-mind-wallet) connection. The anticipation of a reward lights up the brain’s pleasure center and before Spencers know it, they’re an online shopping cart deep into a neurotransmitter dopamine surge that reminds them they’re safe and echoes the comforting phrase ‘everything will be okay.’* 

This personality style doesn’t make much (if any) change to spending and saving plans, despite the reports Pennys readily consume. Spencers sometimes find themselves feeling guilty days after a purchase and debating whether to return the item to ease their regret.


Moderate Marley

Moderate Marley lands somewhere in the middle of the two styles. They find solace in both spending and saving with an eye on the economy’s ebbs and flows and another on purchasable pleasures. This personality remains aware of the current economic climate, takes an accurate snapshot of personal budget patterns, and makes adjustments where needed.  

Marleys’ cuts likely lack the volume of Pennys and they won’t shy away from making those dopamine-based purchases every so often. Marleys embrace both the Pincher and Spender personalities but in a moderate fashion.  

Neither of these adjustment styles is right or wrong, good or bad. Steering away from labels such as these is the first step in reducing the effect of the three amigos (stress, anxiety, and fear) around money while improving our relationship with it.  

Knowing your adjustment style helps you remain in control of your wallet, your budget, and ultimately your financial wellness! You may identify with one or all three, and at any moment in life, your style may change depending on circumstance or your individual financial goals.


Maintaining Holistic Money Wellness

Regardless of your personal economy adjustment style, we’ve all made some form of adjustment in the face of the economic disturbance caused by COVID-19. It’s important to find balance as we all navigate fiscal uncertainty together. Armed with the knowledge of how we respond when faced with economically challenging times, consider these tips to help neutralize the control of the three amigos (stress, anxiety, and fear):  

Organize & Prioritize

Penny Pinchers’ knee-jerk reaction to economic difficulty proves beneficial. By facing the realities of our current financial lifestyle, we may avoid exacerbating feelings of stress and anxiety related to our budgets and feel like we are more ‘in control.’ 

The key here is reminding our psyche that money matters aren’t scary. Try taking your budgeting activities to a comfortable locale like heading to an open-air café with great music! Write down a list of your expenses and number each item to create a hierarchy of most to the least important line items (1 being the highest priority). 

By readily identifying expenses that are most important to you, you in turn pinpoint those you are more willing to cut because they just don’t carry the same weight. Just like that, you’ve cut the fat!


Personal spending creates jobs!  

Let’s face it, we’ve all had our Spencer Spender moments during quarantine. It’s no wonder Amazon doubled its net profit to $5.2B by the end of the second fiscal quarter as compared to profits reported in 2019. Take heart, the Bureau of Labor attributes over 60% of U.S. employment to our personal spending. Use this data to neutralize potential guilt for splurging on yourself, your home, or your loved ones. 

Harnessing the power of our dollars to support local businesses that are taking action and supporting work we care about (i.e., community-conscious spending) could further defuse guilt. Think about the businesses you frequent. Who is going above and beyond to care for employees or donating to community causes?


Consider saving a little more … just in case

I can’t speak for you but I’d rather free fall with a safety net below to catch me. In uncertain economic climates, even minor savings can remind our brains and bodies that everything will be just fine. According to the Federal Reserve, 40% of the American population has less than $400 set aside for an emergency. The generally accepted rule of thumb for savings is to have at least 3-6 months of savings set aside. Reality check: that’s just not realistic for everyone

Remember, you are the expert of your own finances! Ask yourself, how much can I set aside without jeopardizing my basic needs? That number can range from $5 to $500, either is enough! Rome wasn’t built in a day and neither will your savings cushion. You will not become a master saver overnight and although a unique circumstance, an economic downturn will not accelerate that change. 

The goal is to identify which personal financial categories you can find pennies worth saving and begin building your net. (Pro-tip: If you are one of the few American’s not affected by COVID layoffs, you can do some good in the neighborhood by donating to local Mutual Aid Networks that help less fortunate neighbors stay afloat. A quick search online will get you headed in the right direction.)


Find the Freebies

If your personal economy was affected by COVID some of these tips may seem out of reach. Simply making ends meet for some of us these days is the name of the game. Remember that your community still cares. Despite the nation reopening, many community leaders who stepped in to fill the gaps left by governments remain ever vigilant in providing assistance in the way of meals, errand runs, and legal aid. Local non-profits, mutual aid groups, and houses of worship can connect you to these invaluable resources.


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