Your Finances Caught Covid-19

Charles Schwab conducts an annual Modern Wealth survey that gathers data in January and June. This year’s results provide a unique look at how the Covid-19 outbreak has changed how we think about our money. Some results are obvious, others shine a light on what’s really important in our lives.


57% of Americans Financially Impacted by Covid-19

This is unsurprising. Every one of us can name impacted friends. Most of us have felt the impact ourselves in one way or another. Some have been hit hard, lost jobs, or are massively scrambling to reshape a small business to survive.

We’re More Worried About Reaching our Goals

The percentage of respondents who were “very confident” about reaching their financial goals dropped from 33% to 25%. This one is also unsurprising, so let’s jump to the interesting ones….

We Need Less to be Financially Comfortable

How much Net Worth do you need to be “financially comfortable,” and how much do you need to feel “wealthy”? Think about this for a moment. How would you answer this question for yourself? (If you don’t know your Net Worth, setup a call and I’ll quickly help you calculate it.) Everyone has a different “comfortable” or retirement number in their mind. So what’s yours? Did it change this year?

Between January and June, the US response for “financially comfortable” dropped from $934,000 to $655,000 – that’s 30%! The “wealthy” response also dropped 23%, from $2.6M to $2M. Now this is interesting. What’s going on here? Simply, 2020 has reshaped our lives and that’s reshaping how we spend and think about money. We’re spending less because our income dropped, because we can’t (the restaurant isn’t open), and because we’re not walking past Starbucks or the bagel cart on the way to work every day (we have less routine opportunity to spend). Not spending is causing all of us to think about what we don’t need to spend, and it’s changing how we think about it not just daily and weekly, but in the long run. What do I really need to feel comfortable or wealthy?

Lastly, Lifestyle Matters Less

The last question on the survey is a ranking of the factors that respondents say drives their happiness. Lifestyle dropped to 4th place from 3rd place on the list. This one is the puzzler. Did Lifestyle drop because we simply don’t have access to as much lifestyle spending? That is, did it drop temporarily, or is this a permanent change in how we think about what’s important to us, what makes us happy? What do you think, is it temporary or is it permanent? I’d love for you to email me and let me know your thoughts.

You can read the survey results for the entire US along with Los Angeles and Orange County here.

Experience Over Stuff

Real Life Example: As my dad grew older, his life grew simpler, and he would often talk about how “cheap” he was. But was he?

In the 70s and 80s, he went through two Porsches and a Mercedes. He would (arrogantly?) leave the keys in the car when it was parked. In the 2000s, he drove small, thrasher SUVs and I think the keys spent more time in his pockets.

He went through a few extravagant homes in expensive neighborhoods before migrating to simpler homes in more remote locations.

His work also changed. High-profile, high-ego, high-travel jobs evolved into simply doing good work, locally, with a reasonable schedule. (That’s not about stuff, but the trendline is related).

I think he figured out over the years that experience matters more than stuff. And it does. We know it intuitively, there’s research behind it, but do we live it? How can we learn to live it sooner?


Carl Richards is brilliant at summarizing how we respond to money in napkin sketches. That’s his sketch at the top of this post.

I think most people look at this sketch and think, “Well, yes, of course.” It’s a natural response, perhaps it feels intuitively obvious. If that’s you, have you ever thought about whether your spending actually matches this principle? If you look at your last three credit card statements, how much money did you spend on experiences, how much for stuff?


There’s ample longitudinal research on this topic. The first chapter of Happy Money steps through study after study that conclude that happiness is driven more by experience than stuff.

You can reproduce one of the experiments from Cornell right now:

  1. Think of four material purchases you’ve made
  2. Think of four experiential purchases you’ve made
  3. Grab a piece of paper and draw a circle in the middle to represent your self
  4. Now draw circles for each of those eight purchases to indicate how closely linked each purchase is to your sense of self.

Which purchases are more closely related to your sense of self?

How to Live It

In my twenties when I first had a paycheck, I didn’t understand any of this. I jokingly refer to a couple years during this time when I consistently spent more on compact discs (dating myself) every month than I spent on rent; the unfunny part of the joke is that it was true. I love music, so there was an experience element, but the stuff quotient was pretty high in those days.

So here’s a self-diversion tactic to check yourself: just ask yourself one question before you push the proverbial “Buy Now” button: What happens if I forego that purchase for a week or a month? Will it matter? This is a great budgeting technique, but it’s also a great way to apply the marshmallow test to your purchases.

Is Your Stuff Actually Experience?

Back to my dad to close this out. He wasn’t actually cheap. He was focused. His biggest purchases were stuff that enabled experience. He had a nice boat, and boats are certainly not cheap – to buy or maintain. But it wasn’t about the boat. It was about being on the water, about fishing, about time on the water, about time alone or with friends and family. The fancy cars of his earlier years bought him none of that, the boat bought him all of that.

If you have a real-life question you’d like me to write about, let me know: .

“The Talk”: Kids, Religion, Money

Real Life Example: “What do we want from our marriage?”

In full transparency, this example is from my own life. Someone suggested I use it this week.

My wife and I have four natural parents. Those parents logged four divorces among them (my parents were both divorced twice). This makes for children who are wary of marriage. In my case, I wanted to convert this wariness into intention in my own marriage. At the time – around age 30 – I’d often seen marriages break up over one of three things: religion, children, or money. I wanted our marriage to last, so I knew we should talk about these things before we married. But in the case of money, what are some ways to approach that subject?

My wife and I didn’t know how to go about it, we didn’t have any guides or advisors, but we had one advantage: awareness. We both knew deep down that we needed to talk about it, and our awareness of that need led us to an open conversation about money in our lives growing up, our values at the time, and what sorts of values we wanted to carry (or not) into our marriage.

All of us have unconscious beliefs about money, much of which was probably formed in our childhood years. Money might have been an open topic in your home, or perhaps a taboo subject. Your family might have been careless with money, or vigilant and scrupulous. You might have felt you had all you needed, or at least the basics, or you might have felt it was never enough.

I didn’t understand this at the time, but I did know I had some values about money, and the conversation revealed that my wife did also. We both wanted to get out of debt (forever). We had both had struggles with money, albeit different struggles and lessons learned. We both saw cars as primarily functional rather than status symbols or sources of fun. I remember quite vividly talking about whether we wanted to pay for our potential children to go through college – both of us had very strong opinions on this topic based on our families and our own experiences. We decided that day to establish a principle to always live on just one of our incomes. I don’t remember all of the conversation, but I know we’re lucky – we agreed on a lot of things and we set a great foundation for the years ahead.

You don’t need to be on the cusp of marriage to have this conversation, you only need awareness that the conversation is important and a desire to align your money to your shared values. You can start the conversation by asking your partner this simple question: “What was money like in your family growing up?” How did that shape how you think about money today, and is that what you want in your partnership or would you change something?

Let me know if you want follow-on questions for the conversation.

And drop me a line if you have a Real Life Example financial topic you’d like to hear about.