How to change your financial mindset – MarketWatch

Warm weather — and widespread access to vaccines — has arrived and that means the return to “normal” activities may not be far behind.

And, for those who changed their financial priorities during the pandemic — whether reallocating a vacation budget, dropping the daily coffee run or buying a house in the suburbs to escape the city — now can be a good time to prune your financial mindset to see your savings bloom in the year ahead. As we know, when it comes to saving money and keeping a balanced budget, how you cultivate the seeds now can change the harvest. 

While it’s important to work with a trusted financial professional on any major changes to your financial plan, there are a few easy ways to keep yourself on track:

Stop watering those stale strategies

The best practices for financial planning are often evergreen, but that doesn’t mean that the same strategies work year after year for everyone. It might be time to revisit any advice that you have long considered to be true in case it has become outdated over time, like the 60/40 rule. We sometimes call relying heavily on one piece of advice an “anchoring bias,” because an individual will anchor his or her financial planning on a nugget of advice that may or may no longer hold up.

Think long- and short-term

Not all seeds are planted to grow this season, so it’s important to think about what your most important goals are and build your monthly and yearly budgets around your actual needs. For example, how focused are you on building up your retirement funds versus saving for your post-COVID vacation?   

If the pandemic has driven you to want more space for a home office and you have been maxing out your 401(k) for the last decade, reallocating some of your earnings toward a medium-term goal, such as saving for a down payment on a house, may become a goal for this year. Or if the idea of changing your savings plan will stress you out, plan to keep any bonus or extra funds you receive this year, such as tax refunds, and put them toward your goals instead.

Find some relief in monthly charges

While the weather can be unpredictable, the bills that roll in each month are more consistent. Even though they are seen as nonnegotiable, it may be worth reevaluating which can be removed or changed — your health care premiums, Netflix subscription, gym membership, cell phone plans and maybe even your rent can make a difference over time.

Start the process by reviewing your bills and seeing whether other providers are offering better or promotional rates. If a different cell phone provider has a comparable plan for less money, for example, call your current company and ask for a price match. In addition to renegotiating bills, review your current monthly statements and double-check that there are no sneaky expenses.

Don’t ‘spring’ to splurge

Everyone has simple pleasures that they look forward to splurging on, which has only increased during the pandemic. Whether it’s pricey avocado toast or a fancy latte — think about what you feel is money well spent — or wasted. If you want to stop by your local coffee shop every morning for that double espresso because it makes your morning more pleasant, that may be money well spent, as long as you remain mindful of how much you are spending over time. What is important is learning to splurge strategically: remaining mindful of how much money you are spending over time so you can selectively indulge in a way that is built into your monthly budget.

The seasons — and times — are changing, and maybe your financial mindset should too. At the end of the day, putting effective strategies in place can help you reach or refocus on short-, mid- and long-term goals to complement the holistic financial plan you’ve developed with your financial professional.

Amanda Carstens Steward serves as SVP, head of marketing and corporate communications at Athene, a retirement services company.


This material is a general description intended for general public use. Athene Annuity and Life Company (61689), headquartered in West Des Moines, Iowa, and issuing annuities in 49 states (excluding NY) and in D.C., and Athene Annuity & Life Assurance Company of New York (68039), headquartered in Pearl River, New York, and issuing annuities in New York, are not undertaking to provide investment advice for any individual or in any individual situation, and therefore nothing in this should be read as investment advice.