The “NEW” normal is coming in 2022, but we still don’t really know what that will look like.
Are you ready for 2022? To say that the last (almost) 2 years has been a challenge would be an understatement. For many of us it was tough enough to get through every day safely. This is still the case now. Are you ready for 2022?
When we look at the investment markets, whether we are talking about stocks, bonds or the cash market all the way through to housing, the art market, the luxury items, or even car sales there has been a huge valuation increase.
If we think back to March 2020, the first reaction that we saw was ultimately fear. The market on March 23rd took a huge dive. Then there was this huge level of uncertainty, and then we saw a real turnaround which was completely unexpected.
We’ve never seen anything like the Government stimulus that was released in Australia. That has really helped to hold markets up, it’s also held businesses up.
In Australia the stimulus included things like Job Keeper and Job Seeker, that was at record levels. And that was the wave of cash that helped to hold the market up and push it back up to the levels that we’re seeing today.
If we think about this low interest rate environment that we’re in at the moment in Australia, here the Reserve Bank have basically come out and said that it’s expected to stay at this level for 2022 but will go up in 2023. However, from all reports it only looks to be around the 1% mark.
As we open our wallets and return to some of the activities we missed most during the pandemic, caution is warranted. The backdrop is not the same as it was in February 2020. Meaning that an old budget may not work for the current prices of goods and services.
Determining your new normal.
After nearly 2 years of social distancing, holding off on travel and mostly staying home, Australians can return to many activities they have missed.
We should take this opportunity to reassess our spending priorities and make sure that we are spending on the things that are most important to us, or that we have missed the most.
This is especially true for people who kept their jobs through the pandemic and were able to save, meaning they now have some extra cushion in their account.
What do you want your that new normal to look like for you?
Did you miss the frivolous shopping? Miss the dining out with friends and family? Or miss the travel? Usually that’s a huge yes.” So, it’s a good time to sit down and think about your top financial goals and where you would like your money to go. Then, look at your spending and see if it aligns with those goals.
Keep in mind that spending prices have risen due to inflation.
It is important to do that one extra step. How much is it going to be to go out for dinner? Rising costs could mean that certain projects may have a different price tag or need to be delayed.
Don’t forget about your future self.
It would be really good to keep your eye on your spending going into your new normal.
– Focus on why you want more money.
– Why do you want to accomplish what you want to accomplish?
– Why do you want to be in a good spot financially?
One of my “whys” is I value freedom. Being financially in a good place buys freedom. When you’re trapped in unnecessary debt or living pay to pay, it can keep you in situations you don’t want to be.
I want to be financially set so I don’t have to worry about what comes my way and I can have the freedom to do what I want with my time.
Determine your why and then go after it. Keep it in the front of your mind and watch your motivation skyrocket.
Remember this is a “NEW” normal.
Are you ready for 2022?