WHEN I WENT to the grocery store last week, it was packed with customers stocking up on essentials. Carts were filled with items that people couldn’t possibly consume in any reasonable period of time. It’s a scene that’s been repeated across the country.
A friend told me: “When people panic, they want things right away. When people see other people panic, they panic, too.” Like the coronavirus, fear is highly contagious.
I’m not panicking, and yet there are reasons I should feel unease:
Why aren’t I more fearful? To be sure, there isn’t yet a vaccine to stop the coronavirus from spreading. But there are things we can control in our financial lives that can ease our sense of fear. Indeed, there are three reasons I’m not rattled by what’s happening around me.
First, I’ve saved for a lifetime. Without knowing that today’s pandemic would happen, I’ve been planning for this crisis since I graduated college. As a young adult, I got a feel for what it’s like to live paycheck to paycheck—and I didn’t like it. I made up mind that I wasn’t going to save for my dream car, a Fiat 124 Convertible Spider, but for my financial future. I’ve always prioritized saving over spending and I know how to live on less if I have to.
Second, after a lifetime of managing money, I have the confidence I can weather any financial storm that comes my way. I’m confident that I can patiently wait for the stock market to recover and for a buyer for my condo to appear, while at the same time remodeling my new house.
Third, I delayed Social Security. In a few years, when I turn age 70, I’ll have that larger payout, which will give me significantly more income. Between Rachel’s Social Security benefit and mine, we should have more than enough income to meet our fixed expenses.
One thing we should learn from this crisis: We can stock up on life’s essentials in a relatively short period of time. But we can’t truly prepare for a financial crisis with a few trips to the grocery store. Instead, that takes years of saving and investing.
Dennis Friedman retired from Boeing Satellite Systems after a 30-year career in manufacturing. Born in Ohio, Dennis is a California transplant with a bachelor’s degree in history and an MBA. A self-described “humble investor,” he likes reading historical novels and about personal finance. His previous articles include Bearing Up, Time to Shrug and Small Is Beautiful. Follow Dennis on Twitter @DMFrie.