Let’s face it, queens. The past couple years of pandemic life have been no picnic.
People have lost their jobs, lost their homes, lost loved ones…
If you’ve had financial trauma because of COVID, I want to tell you that there could be an upside coming your way. That trauma could be exactly the thing you’ve needed to create a behavior modification for better days ahead. Sometimes it’s only through a financial hardship that we are gifted the catalyst for real change. I’m going to share with you how this is exactly what happened to me.
But first, let’s dish about that whole frog-in-the-pot thing.
The Frog in the Boiling Pot
As the fable goes, if you drop a frog in a pot of boiling water it will immediately know it’s in a bad situation and jump out right away. However, if you place the frog in tepid water and slowly raise the temperature one degree at a time, it will accept the slowly worsening conditions, and stay in the pot until it gets cooked alive.
(Side note: Whether this phenomenon would actually play out in real life is questionable. Nevertheless, I still love the frog-pot fable as a cautionary tale for my own life.)
In short, change is scary, no doubt about it. So when a situation gets bad suddenly and DRASTICALLY, I have always considered to be a gift, because it gives me clarity and a willingness to “make the leap.”
Were there worsening conditions in your own life (i.e. rising temperatures in the pot) that the abruptness of the last two years of hot-mess helped you realize you finally needed to make a change? To quote the host of the Millennial Money podcast, “to stay comfy means staying stuck.” https://podcasts.apple.com/us/podcast/millennial-money/id957163760?i=1000545620096
My Boiling Pot of 2008
After losing everything in the 2008 market crash, it forced me to start over from nothing. After working hard in school and getting good grades along the way, my circumstances had me feeling like a failure. Luckily, I got a second chance with a secure government job in 2010. However, the financial trauma from those two years of struggle stayed with me.
Some of those hardships included:
- Leaving the Navy with no job prospects
- Moving three times in one year to find an affordable room to rent
- Not having enough money to pay for a flight home for the holidays
- Seeing my poor dog’s ribs start to show from the half portions of food I was feeding her
- Considering whether I should live in my car and shower at the gym to save money on rent
When I think back to it today, I can’t believe that I actually considered homelessness (living out of my car) a valid option.
After 2010, even though I had regained financial stability with my government job, I carried the PTSD of that financial trauma with me. But it didn’t drag me down.
It actually did quite the opposite.
Like a muscle that’s been highly developed, my financial trauma gave me a heightened sensitivity to financial risk. Even with the stability of my new job, I felt an overwhelming drive to continue hustling with side businesses to ensure my long-term survival.
When it came time to purchase a piece of real estate or evaluate my retirement options, I had a newfound Spidey Sense. I now did whatever I could to educate myself so I felt empowered to manage my own finances and keep history from repeating itself, like it did in 2008.
In short, financial education and calculated risks became my new way of life.
Those good habits developed as a result of my trauma, and my rock-bottom moment may have been seeing my dog’s ribs start to show. With only $12,000 a year being earned by my freelance video production business, I felt powerless to help her. That trauma helped me make the conscious choice to jump out of the pot I was in before we were both cooked alive.
Fast forward 11 years later and I now have two condos in San Diego and a net worth quickly approaching millionaire status.
Are You the Frog?
If you find yourself trudging through the valley of your own personal finance journey, maybe the intensity of the pandemic can help you reflect on whether you are the frog in the boiling pot. If you realize that your current situation needs to change, let the financial trauma of the pandemic be the fuel the drives you out of that pot and moving on to greener pastures.
Rachel Cruze (interviewed on Millionaires Unveiled #183) said that to change a behavioral habit with money, the end result needs to be more appealing than your current state. That’s the reason I share my own financial wins on social media. It’s not to brag. I do it to demonstrate how even a financial f*ck-up like yours-truly can find his way out of the pot.
And if I can, I believe you can too.
As we move into the new year, I’d encourage you to take some time to reflect on your intentions for the year. By getting quiet and calming the chatter in our minds, it allows the wisdom to rise to the surface. Grab a pen and paper and write out a list of the things you have in your power to do today, this week, and this month to improve your situation. Creating an actionable plan can focus the chaotic stress of financial trauma into a laser beam of focus, once you have a clear idea where you want it to guide you.
Don’t worry about getting everything right. I’ve made many, many mistakes after starting my journey to financial independence. It’s not about perfection. You just need to get started and you can always course-correct along the way. Tune in next time when I share PART 2 for this new year’s series: reflecting on some of my specific money missteps from the past decade. My hope is that my mistakes will help you avoid the same minefields as you get started.
Get hopping, Moneymakers!