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Personal finance and COVID-19 economy thoughts from Jessica Willis, CEO and Founder of Pocketnest
COVID-19 may have defined a new generation. It probably also defined—or, redefined—our personal financial perspectives. Here, we share some thoughts about the COVID-19 economy and its impact on younger generations.
Beyond the media hype of any short-term impact on the general economy, we suspect COVID-19 had an impact on the financial behaviors of younger generations. But, we don't necessarily think those behaviors will be all bad. In retrospect, we consider the Great Depression.
Consider the Greatest Generation and the subsequent Silent Generation, both of which lived through the Great Depression. Their life experiences resulted in deep-rooted, fixed-financial habits. The Great Depression defined these generations as thrifty, frugal and never-wasteful. In retrospect, these aren't terrible characteristics to embody, considering the market fluctuations over time.
As I write this, I picture my Grandma (pictured below) hand-washing and air-drying every single ziplock bag—regardless of its prior contents. She was raised to watch her pennies, be resourceful, not waste anything that still functioned, and plan for all possible scenarios. Yes, that's her, bathing my dad in an outdoor tub.
The Greatest Generation and the Silent Generation lived through the major financial crisis of the Great Depression during their formative years. In doing so, they taught themselves extreme financial conservatism and developed a habit to save and plan for the future. They typically kept more cash on hand than generations after them, and could be considered better recyclers (well, maybe, "re-users") than most of us. With that generation as a template, or a proof point, in mind, there's hope for how we, and especially the younger generations, may have grown from the COVID-19 financial environment. In fact, we are seeing younger generations coming out of the COVID-19 economy with an awareness about why personal financial planning cannot go unchecked. Perhaps we will build good financial habits around the importance of being financially fit, strong, and stable planners. Perhaps among all the uncertainty we lived through with some worry and concern, we may have established better financial habits.
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