What the Omicron Surge Might Mean for your Finances
Let’s face it: this sucks.
After a massive vaccine campaign, a pretty successful hot-vax summer, and a pre-holiday season which made us believe things would finally-finally be getting back to normal, we were introduced to the Omicron variant.
As booster shots slowly rolled out, none of us were prepared for how hard and how fast this surge would hit. Unlike other variants, Omicron is more resistant to the vaccine and is infecting even those with booster shots and antibodies.
And it’s really effing scary.
Places like New York are teetering on the edge of another lockdown as restaurants close, offices shut down, and events get canceled. In short: it feels like March 2020 again.
In the words of the perpetually relatable Olivia Rodrigo: “do you get deja vu?” Yes, Olivia, we do.
There are some differences to this surge. Luckily most people — especially the vaccinated among us — are experiencing mild symptoms. While numbers are up, hospitals are not as overwhelmed as they were when the virus first slammed us.
However, this time, many of us are experiencing pandemic burn out — mentally and financially.
When the pandemic first began, no one could have imagined how long it would last. Many people who were furloughed or working from home saw it as taking a few weeks off to relax and unwind. Obviously, this was not the case. Rates of unemployment skyrocketed and some were forced to move out of their homes to save money or take other dramatic, unexpected measures.
What did this look like? Burning through savings accounts, plunging into credit card debt, and adopting the precarious paycheck-to-paycheck cycle. According to CNBC “42% of U.S. adults with credit card debt have increased those balances since the Covid-19 pandemic began in March 2020.”
And while employment rates are up in 2021 and the Great Resignation has seen people seeking and finding better opportunities, the Omicron surge proves it’s not all sunshine and rainbows.
In a recent money confessional on Slate’s “Pay Dirt” column, one reader expressed their frustration at the financial setbacks they experienced during the pandemic. While they were not totaled by the changes, they had to drastically adjust their life plans.
The columnist responded: “A lot of people had their dreams shattered in 2020 … Just because your situation isn’t the same as your more-hard-hit co-workers’ doesn’t mean that you aren’t grieving the loss of your income,” giving us all permission to feel the negative feelings. They continued: “Toxic positivity is very real in the United States and inspires a lot of people to say that no matter what their life is like, they should be happy … But you can be happy and grateful, yet still, acknowledge the suck in a situation.”
This perspective reflects a necessary shift that we all need to make. Especially as we approach yet another perilous year in the land of Covidia. It’s soooo hard to continue — and continue and continue — being grateful and not be, quite frankly, fed up. So what can we do about it?
As everything is spiraling out of control, there are small things you can do to feel less overwhelmed. And maybe, less bitter, sad, or resentful — provide room to process and accept this unfortunate reality as best you can.
Feel Your Feelings
Toxic positivity festers when we assume we should feel a certain way and don’t pause to let ourselves feel our negative feelings. Emotion comes from the Latin emovere - to "move out, remove, agitate." If we really break it down we get ex "out" + movere "to move." What does that mean to us living in America in the early days of 2022? Get those negative emotions outta here. Feel them and move ‘em out.
Then take a deep look, free from judgment, at how you’re actually doing in your day-to-day life. Try daily journaling, or delve into meditation.
Take Stock of your Life
Often, without realizing it, we fall into habits that become patterns and routines that eventually become our whole lives. So, when these habits are disrupted …. by, I don’t know, a global pandemic … we’re shaken out of our comfort zone and into reality. Take a glance at your life. What are you actually, truly, grateful for? What is mere distraction?
Make a Plan
Our spending habits are the first thing to spiral out of control and the most difficult to course-correct. If you’re worried about your financial health during this time — or you want to be more vigilant just in case — try the Cleo app. This holistic service manages your money for you and helps you gain control and improve your situation. Managing your money no longer feels like a chore, and it’s actually fun!
All in all, Meet Cleo makes you feel like you have a handle on your finances. And in these uncertain times, just being aware of your standing can offer a world of comfort. With Meet Cleo as your side, you no longer have to cave to toxic positivity. This app keeps it real and chats with you like your honest, most blunt friend. And for that, we thank her.
Find out more about Cleo here and put yourself on the path to financial control.
Seemingly every day, TikTok excavates a new defining difference between Gen Z and millennials.
Officially, millennials were born between 1981 and 1996, and Gen Z includes anyone born between 1997 and 2012. Though the "Zillennials" born between '94 and 2000 straddle this divide, the commonly cited factors that distinguish the two include: relationship to technology, use of social media, and memories/experiences of key events like 9/11 and the 2008 recession.
On social media platforms like TikTok and Instagram, more whimsical differences emerge. Social and cultural norms always shift with the times, and certain trends are sure signs of which group a person belongs to.
Popular examples — some of which have caused internet outcries and viral trends (who remembers the "Proud to Be a Millennial" song) — are Gen Z versus Millennial preferences for mom jeans over skinny jeans and middle parts over side parts.
But one thing that unites them: similar attitudes towards money.
Both came (or are coming) of age during various crises — for many millennials, the great recession was a formative experience on their lives and career trajectories, and many Gen Zers have had their emergent professional lives rocked by the pandemic.
Add to all this the crippling load of student loan debt that both carry and the threat of the climate crisis putting a question mark over the task of future planning, learning to manage money is notoriously tricky for both factions — but they're increasingly empowering themselves using the internet.
According to Kasasa* , both generations are turning to personalized, tailored banking services. No one ever taught them to balance a checkbook (literally … what even is that?), but they're empowering themselves with digital banking.
"Millennials … seek digital tools to help manage their debt and see their banks as transactional as opposed to relational," according to Kasasa, and Gen Z are into "learning about personal finance. They have a strong appetite for financial education and are opening savings accounts at younger ages than prior generations."
With an appetite to learn about and confront the abysmal financial foundations, they have been handed, digital banking tools are attractive to both Gen Z and Millennials — bonus points if they are easy to use with a no-nonsense interface.
According to their
website, Cleo is an app which integrates all your accounts and, like a really financially savvy and brutally honest friend, tells you what's going on in your wallet.
Cleo is like the coolest finance major you'll ever meet. You can text her all your questions about your spending, your habits, and your current balances, and she'll give it to you straight.
She'll also tell you when you're running low — like when you should probably skip that Starbucks stop so you'll have money left for the subway home — and keeps you on track of your goals.
Here are some of our favorite features of Cleo that make her universally likable:
1. It's like talking to a friend
Above anything, Cleo is accessible. Anyone can (and everyone should) talk to her about money to demystify their finances. Cleo answers questions in a super easy-to-understand vernacular and talks to you like a friend — the kind of friend who isn't afraid to roast you when you're being shortsighted.
2. Autosave makes saving easy
Budgeting doesn't have to be boring. Saving money should be fun. After all, you're stacking up cash to live an awesome life — whether it's a sick vacation you want to take and post all over Instagram or a house in your dream neighborhood — so shouldn't you be excited about it? Well, it can be hard to drum up any verve for putting your money away, but Cleo uses autosave so you don't see the money it's saving for you until you've reached your goals
3. She breaks it down super simply
The key to getting good with money is looking at the big picture. Cleo categorizes your spending into parts so you know how much is going where. And it doesn't have to be intimidating. Sometimes all you need is a calculator and Cleo.
While it's possible to be frugal with many aspects of your lifestyle, there are certain events and possessions that will require you to spend a substantial amount of money. Thus, a wise course of action is to begin saving well ahead of time while thinking about your goals for the future. This way, you'll be able to maintain a stable financial state even when faced with those large expenses. The following are a few major life purchases that you should plan for.
Marriage is a joyous occasion that many people look forward to. However, a wedding can be quite expensive, often costing thousands of dollars. Your family and your future spouse's family will often contribute to covering this, but you should still prepare to spend a good deal of your own money on the ceremony. If you're in a serious relationship and are considering marriage, you should plan where the funds for the wedding will come from and take the necessary actions to accumulate them. It's also crucial to discuss financial matters with your partner, since your property will merge once you get married.
A New Car
Automobiles remain one of the top modes of transportation. As a result, you may want to purchase a new car at some point in your life. Although you may be fine with an old or used vehicle at present, you may one day be motivated by a desire to acquire something nice for yourself or by the practical needs that arise as you raise children. Whatever the case, obtaining a new car is a major life purchase that you should plan for.
In addition to setting aside funds to eventually put towards a vehicle, you should also aim to build you credit score. This is because your credit score will determine your available car loan options. The higher your credit score, the more you may be able to lower your interest rates on your car.
Owning your own residential property is a worthy objective that you may hope to make a reality one day. Ideally, you should save about 20 percent of the total cost of a house before you buy it. This will allow you to make a larger down payment and thereafter face less interest on your mortgage.
As with acquiring a car, the mortgage options that you'll have can change based on how strong your credit score is. You'll want to increase your score as much as possible in the years leading up to buying a house so that you can get more favorable interest rates. In addition to contemplating down payments and mortgages, you must also remember that you'll need to deal with property taxes, insurance, maintenance and repair fees, and sometimes homeowners' association charges.
It's also necessary to hire a real estate agent to help you with the buying process. There are different types of real estate professionals. You should know how to distinguish between buyer's agents and seller's agents so that you can obtain favorable prices on homes as well.
Is a Flexible Spending Account (FSA) Right for You?
During open enrollment or when you start a new job, you may find that your company offers the chance to enroll in a Flexible Spending Account (FSA - registered trademark). It might seem annoying to have money deducted from your paycheck at first, but it can actually save you money on health care expenses in the long run.
An FSA is an account that takes money from your paycheck and puts it into a special account that you can only spend on certain healthcare items or eligible medical services.
You can use an FSA for copays for visiting the doctor, prescriptions, and even for services like new retainers or glasses. Some of the FSA-eligible expenses you might not even think about include sunscreen, condoms, and tampons.
Parents and children of elderly might be familiar with Dependent Care FSA, a similar pre-tax benefit used to pay for things like after school programs and even adult daycare.
The money taken out of your paycheck is pre-tax, meaning that while you can't spend the money on just anything, if you are able to estimate your medical expenses for the next year, you can avoid paying payroll taxes on up to $2,750.
If you've had your eye on LASIK surgery (eye – LASIK, get it?) you can include extra money in your FSA contribution for the next year and pay no taxes on the money from the FSA you use to pay for the surgery.
Many plans allow you to access the full year's contribution on January 1st. This means you can use the FSA as an interest-free loan for medical expenses. The money is going to be deducted from your paycheck anyway, so why wait?
The big downside to an FSA is that you usually can't change your contribution mid-year. So, if you run out of money in the FSA funds in July, you'll have to use regular after-tax dollars to pay for qualified goods and services.
Conversely, put in too much, and you might be scrambling in December to find eligible expenses to spend the money in your FSA account. An FSA is use-it-or-lose-it – you have to spend all the money that year or poof, it's gone. However, if you have funds remaining in your account at the end of the plan year, there is a grace period of two months and 15 day. That means you have until March 15th to spend money from the previous year.
To decide how much to contribute to an FSA, I recommend a few steps:
- Look at your qualified medical expenses that happen on a regular basis. If you know you're going to have a $20 copay every week for therapy or a $35 copay every six months for a checkup, take note of it.
- Think about any big procedures or items you might want in the next year. If you're thinking it's about time for new prescription sunglasses, be sure to set aside some money for that.
- Do some research about what FSA-eligible items you use regularly and get a rough estimate as to how much you might spend on them. I usually check out the FSA Store to get an idea of the different categories. If you're addicted to a certain lip balm or have been dying to try light therapy for your acne, try to get a ballpark idea of how much you're going to spend next year. I don't know what guy needs to hear this, but you probably do not need that many condoms even if they are tax-free.
- I like to then add a small gross up for incidentals that may pop up (nobody plans on spraining a wrist) and any random expenses you might have (if you have to pay for parking at the hospital or something, you can use your FSA). The specific amount depends on how comfortable you are of running out of your FSA if something comes up and how much extra you can afford to set aside each week from your paycheck.
- Add that all together and that's how much you should set aside in your health care FSA.
Once you have your limited purpose FSA, you can use the FSA mobile app for deadline reminders and eligibility checks.
You can retain hundreds of dollars a year in tax savings by paying your medical expenses with money from your FSA all while keeping you healthy. If your employer offers one with your health insurance benefits, I definitely recommend enrolling. Spend more on your health, and less on the internal revenue service.