I’m not a New Years’ resolution type person.
If you’re not either, you probably know why. So there’s no reason for small talk on the matter.
I bring this up only to say that, given how the pandemic impacted (and continues to impact) our personal finance in positive and not-so-positive ways, it might make sense to think about cash security as a goal for 2022.
If you’re planning to Never Retire, cash security takes on paramount importance.
We can go over the reasons another day, but needless to say, without a million dollar-plus nest egg waiting for you to devour at age 65, you need enough cash on hand to feel okay about living the semi-retired life, both in your prime and into relative old age.
During the stay-at-home portion of the pandemic, we were—for the first and probably only time in my life—all in it together. We bonded with one another, particularly on this notion of a new normal once we come out of this thing.
On the verge of 2022 and we’re not out of this thing and, aside from the lingering pandemic, we’ve pretty much reverted back to the way things were. Definitely with money.
Quite a few of us took advantage of unprecedented (in my lifetime at least) government support and reduced spending to save money.
However, according to a New York Times article, that savings is dwindling:
The savings isn’t gone. It’s just that the writing is on the wall.
Of course, lower income households have been disproportionately impacted. Though, it’s probably safe to assume that as most people of modest means have started spending again, specifically in restaurants and bars, the savings rate and attendant account balances has likely dropped for large swaths of the middle to upper middle class population.
In any event, it makes sense to keep on eye on this and make adjustments to how you allocate your cash to ensure you have whatever level of cash security you require to feel comfortable now and going forward.
In future installments, we’ll discuss concrete and practical ways to do this.
Rocco
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