As we enter August and approach Labor day in September, it serves as a reminder for all of us that another school year is starting. Whether it be for a worker, student, or parent, it can act as a transitional time period where it is a new beginning. However, this year’s “back to school” era is a little different for all. After a whole year and a half of the pandemic, many experienced major changes, psychologically and financially. In many countries including the United States and Canada, industries are aiming for the following year to be close to where we used to be, or almost “back to normal”. However, we are all aware of all the adjustments we have made and continue to make to tackle the pandemic. Despite its positive connotation of society’s return to its past state, we are continuously reminded of the losses and the changes of the past year. With an altered mindset due to the urgent need to readjust to a new reality, this year’s “back to school” season will look different.
In the U.S., the unemployment rate rose from 3.8% in February of 2020 to 13.0% in May of 2020.1 Internationally, the pandemic provoked the loss of 225 million jobs. Many people experienced an unprecedented loss of jobs and income. A financially and psychologically traumatic incidence in addition to the already existing pandemic which is extremely distressful on its own. A study by Griffiths reported an association of poor mental and physical health with job loss during the pandemic.2 This trend can be credited to the lack of social interactions and also a decrease in financial assets. It is quite frightening to see the number of people whose life was flipped upside down int he matter of days. Additionally, some have been able to work from home for the past year and a half and this return to normalcy can induce a different kind of stress. While working from home was an adjustment in itself, returning to an office is also another adaptation that can be uncomfortable for some workers.3 However, the fear of financial instability is another strong and prevalent factor that one cannot ignore, especially after the past year.
Similar to these workers, students at all levels have encountered various obstacles due to the pandemic. For students, socialization is critical for their development, especially at young ages. For post-secondary students, as student debt was already a recurring issue for many, the pandemic had an adverse effect on their sense of financial security. According to a survey conducted by Temple University, one out of three students had lost their job due to the pandemic.4 Additionally, the 2020 College Student Financial Survey reported that approximately 13.3 million undergraduate students disclosed that the pandemic has changed their outlook on their financial status in the future.5 While the excitement of being able to return to in-person classes and resume a semblance of normalcy is immense, the financial stress can be a large factor in their decision-making. Maintaining a balance between the excitement of returning to a social realm and money issues that have accumulated over the past year would be crucial in establishing a healthy relationship with money.
What does this mean to all of us?
This means that regardless of where you are in life, there is a level of adjustment we must go through. The psychological damage that has been done over the past year can translate into financial stress, especially during this transitional season. While some men think that forgetting what happened in the past year and a half is the best solution, that is unfeasible and would also not be as helpful as we think. Learning from what we have gone through individually and as a society can help us acknowledge and understand the emotional trauma from the past and manage financial behavior in the future. Strategies such as:
⦁ Acknowledge the experiences in the past and do not underplay it
⦁ Fully be aware of the changes that may come your way as much as possible
There is no way to predict all the emotional turmoil that this new transition can bring, psychologically and financially. However, the unfamiliarity and uncertainty of money decisions are bound to happen for all. It is crucial to accept the emotions surrounding these decisions before shutting them out and just solely focusing on the quantitative aspect of money. Welcome to back to school, but more like back to the new normal.
⦁ Kochhar, R. (2020, August 26). Unemployment rose higher in three months of COVID-19 than it did in two years of the Great Recession. Pew Research Center.
⦁ Griffiths, D., Sheehan, L., van Vreden, C., Petrie, D., Grant, G., Whiteford, P., R Sim, M., & Collie, A. (2020). The impact of work loss on mental and physical health during the Covid-19 pandemic: Findings from a prospective cohort study. Journal of Occupational Rehabilitation, 31, 455–462.
⦁ Caine, P. (2021, March 11). After a year of remote life, new anxiety emerges: Returning to work. WTTW News.
⦁ Saul, S. (2021, April 1). For many college students, pandemic life is disappointing. for others, it is a financial crisis. The New York Times.
⦁ Dickler, J. (2020, August 31). Due to PANDEMIC, more than 13 million college students are worried about their financial future: Study. CNBC.