What’s Your Financial Next Normal?

What’s Your Financial Next Normal?
BY Anna Baluch
Aug 5, 2020
Key Takeaways:
  • Post-pandemic saving and spending are likely to be different for consumers.
  • Maximize savings for a recession if you can.
  • Clear high-interest debt in expectation of a recession.

The coronavirus has changed our lives in a multitude of ways. It’s made social distancing, mask wearing, and staying at home a big part of our everyday new normal. The pandemic has also affected how we view what’s normal when it comes to our finances, for both our short and long-term financial goals.

To reach those financial goals, or maybe just to stay afloat during the coronavirus era and beyond, it’s important to understand that things probably won’t ever return to our old “normal”. Instead, we should think of where we are likely heading as the “financial next normal”. Here are some ideas to consider on how to do just that.

How you spend your money


Chances are that the pandemic has altered your money management and may have led you to spend less money. You may be cooking more at home and saving on dining out. You may be working from home and slashing transportation or car costs. Your gym membership may be a thing of the past because at-home workouts are your new normal.


Because recession will most likely be part of our financial landscape for months or years to come, you may be more worried about overextending yourself than you were before. Spending with caution and the realization that your finances can drastically change at any moment may be a part of your financial next normal.

You may focus spending on groceries, childcare, medical expenses, and other things that really matter. All the “extras” that aren’t really necessary or bring no real value or joy to your life will be the first things you may slash from the budget.

How you save your money


According to SimplyWise, 38% of American cannot come up with $500 without taking out a loan or selling something. Since the coronavirus has revealed how quickly your finances can take a hit, it makes sense to start making emergency savings a top priority. With three to six months of expenses saved up, it can help you feel more secure about your financial future.


Once you have a solid emergency fund in place, you may move on toward other savings goals like saving for a house or a college education. The savings goals you choose to tackle will ultimately depend on your lifestyle and unique priorities.

If you feel like you don’t have enough cash to save as much as you’d like, you may want to get really creative about expanding your income during hard times. It can be done.

How you invest your money


There’s no denying that the coronavirus has made many of us fearful about our investments. You may have watched your portfolio tank overnight and wondered whether or not you’ll be able to retire when you’d hoped to. After all, the S&P’s longest bull market began in March 2009, and came to a sudden end in March 2020.


For a less certain future, you may be more open to low-risk investment options that offer greater stability. This is particularly true if you’re older and nearing retirement age. If you’re young, you can probably afford to invest with greater risk. Here are some low-risk investments to consider if you’d like to be a more conservative:

  • Bonds: Compared to stocks, bonds pose much less risk. You may earn interest payouts during the time you hold the bond and the face value once it reaches maturity.

  • Money market funds: A type of mutual fund, money market funds allow you to invest in various highly liquid assets. Many money market funds of cash and securities such as certain bonds with maturities of about a year.

  • Certificates of deposit: A certificate of deposit (CD) can be compared to a savings account with a fixed interest rate and withdrawal date. It comes with a guaranteed return and earns higher interest rates than most checking and savings accounts.

  • Preferred stock: With preferred stock, you may be able to count on a fixed dividend as preferred stocks have priority over common stocks.

You may also want to try a robo-advisor, which can allow you to invest without much money or investing experience. A robo-advisor will ask you a few questions to determine your risk tolerance and goal. Then, they’ll invest your money for you and use special algorithms to continually rebalance your portfolio. For example, Wealthtfront and Betterment are two well-known rob-advisors you can explore.

How you bank and pay


The pandemic has accelerated banking and payment trends that we’ve been seeing over the past several years. In a survey by J.D. Power, 30% of respondents stated they are using their mobile banking app more often and 35% revealed they are relying on online banking more than they did pre-coronavirus.


If you’re not already taking advantage of mobile or online banking, you’ll likely want to start doing so in the coming months and years. Additionally, we may all use cash less and gravitate toward contactless payment methods as our new way of doing things. These may include digital wallets like Apple Pay and Google Pay as well as online prepay that allows you to pay without physically touching anything in stores, restaurants, or other establishments.

How you obtain health insurance


Since unemployment levels skyrocketed as a result of coronavirus, millions of Americans were left without health insurance. If you’re one of these Americans, you may be worried about how you’ll cover medical expenses for yourself and your family. This is especially true if you relied solely on your employer’s health insurance plan for coverage.


The coronavirus may change the way you get health insurance in the future. Depending on employer-sponsored coverage may bring you uncertainty, so you may consider alternative options instead. Some examples include:

  • Medicaid: As long as you’re eligible, Medicaid offers an affordable way to obtain health insurance coverage. Fortunately, 36 states and the District of Columbia have expanded Medicaid coverage to those who earn up to 138% of the federal poverty level which is $17,609 for individuals, $23,792 for a family of two, and $36,156 for a family of four.

  • Health Insurance Marketplace: With the ACA marketplace, you can compare individual health plans easily. All you have to do is enter your personal information and wait for your health plan options, including estimated costs and subsidies that you may qualify for.

  • Association Health Insurance: Some associations, such as Freelancers Union and the Alliance for Affordable Services offer health insurance to its members. Since the cost of membership may be more than the benefit you’ll receive, do your research before you go this route.

Healthy financial management is key, now and in the future

Learning how to deal with debt, money, and unexpected financial roadblocks doesn’t need to be hard. Here at Freedom Debt Relief, we’ve created a simple to follow guide to help you find the tools you need to improve your money management skills, manage your debt, and create a better financial future during and after the coronavirus. Get started by downloading our free guide to help you plan for your now, and your next.

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