Day 6 Of 30 Days Of Stay-At-Home Personal Finance Wins: Practice Financial Distancing

3 minute read

What if you were able to come out of this time of social distancing and economic crisis with a stronger and healthier financial life? What if you looked at this as an opportunity to take a little bit of your extra time each day to work on your finances?

Since it takes me about 35 minutes to drive to work in the morning and 45 minutes on the way back home, I have an extra 1 hour and 20 minutes of my day that I don’t have to drive while I’m working from home that I can use to accomplish something. This doesn’t even take into consideration all of the networking and social events that would usually take up some of my time throughout the week.

Obviously, your situation is different than mine (and probably a whole lot different if you have kids at home who would otherwise be in daycare), but I’m guessing that we all have at least a little extra time right now that we can dedicate to our personal finances.

It looks like we’re going to continue to practice our social distancing skills at least through April, and now is a great time to work on creating a better financial situation, so I’m giving you 30 days of stay-at-home personal finance wins throughout April.

Unfortunately, I understand that there are many who have (and who will) lose their jobs during this time of uncertainty and objectively will not come out on the other side of this with a stronger financial situation. Hopefully, many of these personal finance wins can help to lessen the blow and make things easier on them. On the other hand, I think that many of these wins are still relevant to those who are fortunate enough to be in a position to not have to worry about their job and their finances to help them build a healthier financial life.

Day 6: Practice Financial Distancing

We’re asked to practice social distancing to help “flatten the curve” and to slow the rate of COVID-19 infection so as to not overwhelm hospitals with people who need treatment. Likewise, we can practice financial distancing to flatten the curve of our emotions and not overwhelm ourselves to the point where we make potentially poor financial decisions based on a barrage of news and ideas from those who may not have our best interests in mind.

Tune Out The Noise

“The four most expensive words in investing are: ‘This time it’s different.’” – Sir John Templeton

There’s so much news every day and there has been a ton of volatility in the stock market over the past month. I think that too many people get too caught up in what they see on TV which causes fear, anxiety, and anger, especially when it comes to their financial lives. I understand that it’s important to be informed, but there are so many more positive things that you can do with your time instead of trying to keep up with the news and what could happen. Go take your 17th walk of the day.

One way to practice financial social distancing is to turn off the TV and quit worrying about the day-to-day movements of the stock market. Investing is a long-term game and too much bad news in the short-term tends to make people anxious and forget about their long-term strategy. While the beginning and stimulus of each recession in the stock market has been different, the end has always been consistent: they all ended and went on to new highs.

(Of course, past performance does not indicate future results.)

Check out this video from Dimensional Fund Advisors titled Tuning Out the Noise:

Tuning Out the Noise
At Dimensional, we believe that the right financial advisor plays a vital role in keeping investors focused on what really matters. To find an advisor in you…

Sales People

This may be a very vulnerable time for many when it comes to their money – particularly those who are worried about how the recent stock market movements could affect their retirement. Times of anxiety and volatility can bring out those who thrive at peddling “safer” products based on those emotions.

A confident pitch to a bad idea (especially if it’s complicated) can sound pretty compelling to those who have not been otherwise educated about a topic. It’s fair and wise to analyze ideas and information, look for the other side of the story, and to assume that someone is wrong until you’re able to find independent information that verifies or disproves their arguments.

Keep in mind that people you see on TV are sales people as well, just a different kind. They’re selling you entertainment and fighting for the right to your attention. They aren’t giving you objective personal financial advice.