Focusing on what you can control is one of the best ways to manage your money. Investors often fail to recognize the aspects of their financial situation that are within their control. For example, if asked why you don’t have more extra cash leftover each year, what would you say? Many individuals might say they’re underpaid without considering their spending habits.

It’s true: there’s a lot we cannot control in our financial lives. But you can manage your money better by reducing the impact uncontrollable events have on your bottom line. This helps put you back in control over stewarding your own financial future.

To clarify: this is not to say that an individual’s financial circumstances are solely a result of overspending or some fault of their own. Particularly for low-wage workers, a full-time job (or sometimes jobs) doesn’t always pay enough to meet basic human needs. This is more of a societal issue and outside the scope of this article.

The best way to manage your money is to focus on what you can control

There are so many things we can’t really control when it comes to our finances:

• How the market performs
• Changes in tax law
• Changes to the retirement system
• Reduction of benefits offered at work
• Future of entitlement programs like Social Security
• Inflation
• Costs of healthcare
• Job security
• Regulations or innovations impacting the future of certain industries and professions

The list goes on. But before these uncontrollable and unknowable situations make you feel powerless, consider what steps you can take when managing your money to minimize the impact it may have on your financial situation and goals. In another words, make it not matter as much.

You can’t control the market, but you can change how you’re invested

Having the right investment mix is critical to benefit from good times in the markets and help protect your assets during downturns. While you can’t control the ups and downs in the financial markets, you can control how you invest in it. Diversification helps to limit the impact on your portfolio but swings in the financial markets are an uncomfortable (and inevitable) part of being a long-term investor.

Many investors choose to work with a financial advisor instead of trying to manage their money alone. As a DIY investor, you’ll need to decide what percentage of your portfolio to allocate across asset classes, like equity and fixed income. This is a key step towards reducing your exposure to market moves. Investing carries risks, but inherent market risk is not the same as diversifiable risk. Diversifying within asset classes and across geographic regions and investing styles can help by adding negative correlation.

During challenging times in the global financial markets, diversification can help protect investors against significant negative implications for their portfolio, but it’s important to realize that there isn’t always somewhere to hide when the market is down.

Avoiding extreme concentrations in single stocks is another important and often controllable factor. Employees with stock options or awards may have 50% or more of their investable assets in company stock, even though they’re able to sell. If the stock price sinks, you suffer equally and depending on the situation, your job may also be at risk. It’s a one-two punch. Converting paper profits into real gains is a key part of taking control over your finances.

Promote financial flexibility and independence by managing expenses

The easiest way to save money is to spend less of it. Investors often think income is the key to a high savings rate, but thanks to lifestyle inflation, many end up worse off as their top line improves. Maintaining pre-retirement expenses in retirement gets harder as your spending increases, as you’ll need to save more before retirement to afford it. But large outflows to support your lifestyle while you’re working means there’s less left to save.

Here’s a simple example:

One household earns $150,000 and saves $45,000 per year. Another household earns $250,000 per year and saves $60,000. Even though the first household earns $100,000 less, all else equal, they’re going to be in a better financial position because of a higher savings rate (30% vs 24%) relative to the second family.

Aside from taxes, we all make choices about how to spend our money. Homes, vacations, private schools, cars, restaurants…all controllable, voluntary costs. And if you’re managing your spending, it’s much easier to adapt to changes that you cannot control.

For example, if you’re relying on Social Security for a big part of your income in retirement, it’s a risk. But if this income isn’t an essential part of your strategy or you plan to mostly self-fund your needs, you’ll be in a better position to overcome external factors and gain financial independence.

Savings = flexibility

The value of a high savings rate cannot be overstated. Like the financial markets, life doesn’t usually move in a linear fashion. There will always be setbacks, unexpected hurdles. So if you’re only saving the bare minimum across your investment and cash accounts, or haven’t invested outside of your 401(k), you may in a bad spot when things don’t go according to plan.

Examples of how a high savings rate and manageable expenses can help you navigate a challenging situation

• A study from the Urban Institute found over half of full-time workers over 50 experienced involuntary job separation, leading to prolonged unemployment or a pay cut of 50% or more for at least two years. If unemployment benefits don’t cover your expenses, you’ll want to cut costs and still may need to dip into savings. Cutting back is easier without large fixed costs, and an emergency fund can help bridge the gap.
• If you are approached with an early retirement buyout package, the income you need to meet your expenses is key to determining what’s possible. With above average expenses, it might not be feasible to pay for the unexpected costs of medical insurance before Medicare without trying to find a new job or taking your chances by turning down the offer.
• Fixed costs force retirees to keep drawing from their accounts, even in down markets. When your retirement savings peak and you stop contributing, you’re most vulnerable. Typically, spending it also the highest in the years around retirement. One of the best ways to avoid running out of money in retirement is not overspending, especially in the beginning.

Focus on the intersection of what’s important and what you can control

You don’t have an endless amount of time to devote to managing your personal finances. To manage your money better, don’t fixate on things that aren’t important or you can’t control. For example, if you’re looking at your monthly bills and want to cut back, the $30 you spent on coffee doesn’t really seem important relative to $150 in streaming services and a $900 car payment.

Similarly, the potential for tax rates to increase is a source of stress for many taxpayers. Though a valid concern, worrying about it won’t help. Making financial decisions purely for tax reasons isn’t advisable either. Until a bill becomes law, it’s just noise. The good news is no one is forcing you to listen.

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Budget accordingly

Organization is key to living a productive life—we coordinate work schedules, social events, and family time to ensure we have enough time for each part of our lives. Our bank accounts are no different—as we earn money, it’s important to set aside money for certain categories: setting a grocery budget keeps you from overstocking at the store while sending a percentage of each paycheque to a savings account is how you’ll save up for a car, house or any other major financial goal. Budgeting also allows us to notice places where we may be wasting money unnecessarily—perhaps you could save more by canceling that streaming subscription you hardly ever use. Setting a budget makes us concentrate on how much money we have, where we spend it, and how we can optimize our savings, including how we may invest those savings.

Whether budgeting is new for you or you’ve been doing it since your first paycheque, there’s always room to learn better budgeting strategies—the Personal Finance For Everyone: Insights for Managing Your Money Well course will teach you everything from how to pick the best credit card offer to how to understand investment products we may encounter. Course instruction includes lessons on personal finance, the math behind money, behavioural finance, asset allocation, investing, credit, and pro money tips that will make you the master over your own finances.

Think about retirement early

As the end of work looms ahead, retirement is something every adult should be planning for as early as possible. It’s never a bad idea to start saving and investing early for a more comfortable retirement for you and your family—but knowing where to begin isn’t exactly clear. Mutual funds, or funds that are collected from various individuals and pooled into investments like stocks and bonds, are a smart and lucrative way to grow retirement assets in a secure manner. Rather than mutual funds selected for optimal growth, retirement mutual funds should be focused on preservation and income.

(Photo: Shutterstock)

The coronavirus pandemic brought on unforeseen challenges nearly overnight, and it is evident that the impact will be long-lasting. Data shows that 74% of employees are concerned about at least one aspect of their well-being as a result of COVID-19 (financial, social, mental, physical) and a majority of them (52%) are most concerned with their financial health.

Whenever big changes occur, it’s a good opportunity to reassess all aspects of our lives, especially our finances.

Now that many of us have been working from home for a period of months, how could you better prepare for your future? Inverse reached out to financial advisors Douglas A. Boneparth, president of Bone Fide Wealth, and Sid Misra of Beacon Financial Group for their tips for people now working from home. Here’s what they had to say.

6. Budget (obviously).

“Take the time to review how cash flow has changed while working from home,” Boneparth said. “Go over the past four months of bills to see how your spending has changed from before WFH. This will help you understand if you actually are saving more money or just redirecting your spending to other categories.”

Misra stressed that budgeting means awareness.

“You need to be aware of where your money is going and how much you are spending in light of now working from home,” he said. “Factor in your rent, car payment, food expenses, subscription services, and entertainment costs. The math is simple. You cannot build wealth if you spend as much or more than you make.”

5. Hold a large cash reserve.

“We’re working from home because there’s been havoc in our country and economy,” Boneparth said. “That means uncertainty in almost every aspect of our lives. Having extra cash — nine to 12 months living expenses — can help you sleep well at night knowing you can be OK for quite some time before needing to use other financial resources.”

Misra agreed, adding that many people have little to no savings, forcing them to put expenses on their credit cards, with average interest rates over 20 percent. Especially if you’re looking to invest, make sure you have enough money in your emergency account.

4. Automate whatever you can.

“Now is the time to think about the future, so take advantage of automation to help with saving and investing,” Misra said. “The average person will spend what is available to them, so make less money available for yourself. If your company offers a retirement plan, contribute to it! Set up an automatic transfer program to move money from your checking to savings account. After a few months you’ll see how much your savings have grown.”

3. Protect yourself.

“See if you need additional liability or umbrella insurance for bringing your work home with you,” Boneparth said. “It’s always a good idea to assess what risks you’re exposed to, especially when such a time-consuming aspect of your life is now at home.”

2. Focus on yourself.

“Especially during hard times, it’s easy to read too much into ‘success’ posts on social media,” Misra said. “The reality is that these posts are a carefully curated snapshot of one moment in someone’s life. It’s the tip of the iceberg, and we don’t know what’s really under the surface. Perhaps this person has a ton of debt or is supported by their family. You will never be happy chasing external validation. Don’t set yourself back financially for years to come trying to keep up.”

1. Learn new skills.

“Now that many of us are working from our homes, it’s a great chance to educate ourselves,” Misra said. “Personal finance classes are not a requirement in the US. Many people grow up not understanding how to manage their finances and this is a huge problem. While we can place blame on the system for allowing this, we must also take responsibility for educating ourselves.”

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Advice offered by Marc Hebert, president of The Harbor Group Inc., a certified financial planner. If you have any questions about finance or if you’d like to suggest a future topic, email webstaff@wmur.com.

Your credit history is important for many reasons. Getting loans with better interest rates and terms, securing a job, finding an apartment, and getting approved for reasonable insurance rates are all examples of things that could hinge on having good credit. With our current climate of economic uncertainty and the outbreak of COVID-19, it is important to maintain strong credit so you are positioned to have credit available when you most need it. Good credit is the result of good credit management. Here are a few management steps to help get you started:

1. Prepare a Budget

A budget is your income and spending snapshot. It is meant as a guide to help you spend within your means. As you work with your budget, you may find areas where you can reduce spending. This may result in extra cash to either save towards meeting your goals or reduce your debt, in accordance with your spending plan.

2. Credit Picture

In order to manage your credit, you need another snapshot. This one consists of making a list of all your creditors, the amount owed to each, the interest rate, and the available credit. When viewing your credit snapshot, be certain to keep balances well below credit limits and don’t open any new credit accounts.

Most importantly, pay the minimum due on each of your credit cards. Use any excess cash to pay extra towards the card with the highest interest rate. This will reduce your overall interest expense over the life of these loans. Once the highest rate card is paid off, the money that was put toward this card can now be used to pay off the next highest interest rate card. This process is repeated until there are no loans outstanding. This strategy can work for both credit card and non-credit card debt.

3. Credit Reports

Everyone needs to review their credit reports periodically for incorrect information. Reports from all three reporting agencies (Transunion, Equifax, and Experian) need to be included. Any error should be corrected with the reporting agency immediately. This is also one way to spot identity theft.

Reviewing your reports should not be done just once. Credit reports should be monitored frequently. Be sure to follow up on the corrections to any mistakes you have noted.

4. Know Your Credit Utilization Rate

Your credit utilization rate is the ratio of your revolving credit balances to the amount of your available credit. For example, if your credit card balances total $7,000 and you have $20,000 of available credit, then your credit utilization rate is 35%. The lower the ratio, the more of a positive effect this metric will have on your credit score.

5. Have an Emergency Fund

When an unexpected bill comes up, there is always the temptation to put it on your credit card. A better approach is to build up an emergency fund. One way to do this is to have a set amount transferred from your paycheck to a special savings account earmarked as your emergency reserve. Small amounts will grow over time to a fund that can meet your emergency expenses.

6. Seek Help

Finally, sometimes the biggest step towards managing your credit is recognizing that it is an issue that requires professional help. If you find yourself in this situation, consider credit counseling. Your lenders may also be of help. This can occur through renegotiating the terms of a loan or by debt consolidation. If you use a firm to perform these tasks for you, don’t forget to research the firm and make certain that it reputable. Keep an eye on what fees, if any, are charged for the service.

Managing your credit takes some time and effort. The end result is worth it. Your financial picture will be improved and your financial stress reduced.

Investing is the process of buying assets that increase in value over time, with a goal of generating income or selling for a profit. In a larger sense, investing can also be about spending time or money to improve your own life or the lives of others. But in the world of finance, investing is the purchase of securities, real estate and other items of value in pursuit of positive returns or income.

How Does Investing Work?

In the most straightforward sense, investing works when you buy an asset at a low price and sell it at a higher price. This creates profit, also known as a return on investment. Earning returns by selling assets for a profit is one way to make money investing.

When an investment gains in value between when you buy it and you sell it, it’s known as appreciation.

• A share of stock can appreciate when a company creates a hot new product that boosts sales, increases the company’s revenues and raises the stock’s value on the market.
• A corporate bond could appreciate when it pays 5% annual interest and the same company issues new bonds that only offer 4% interest, making yours more desirable.
• A commodity like gold might appreciate because the U.S. Dollar loses value, driving up demand for gold.
• A home or condo might appreciate in value because you renovated the property, or because the neighborhood became more desirable for young families with kids.

In addition to profits from appreciation, investing works when you buy and hold assets that generate income. Instead of seeking profits from selling an asset, the goal of income investing is to buy assets that generate cash flow over time.

Many stocks pay dividends, for example. Instead of buying and selling stocks, dividend investors hold stocks and profit from the dividend income.

What Are the Basic Types of Investments?

There are four main asset classes that people can invest in with the hopes of enjoying appreciation: stocks, bonds, commodities and real estate. In addition to these basic securities, there are funds like mutual funds and exchange traded funds (ETFs) that buy different combinations of these assets. When you but these funds, you’re investing hundreds or thousands of individual assets.

Stocks

Companies sell stock to raise money to fund their business operations. Buying shares of stock gives you partial ownership of a company and lets you participate in its gains (and the losses). Some stocks also pay dividends, which are small regular payments of companies’ profits.

Because there are no guaranteed returns and individual companies may go out of business, stocks come with greater risk than some other investments.

Bonds

Bonds allow investors to “become the bank.” When companies and countries need to raise capital, they borrow money from investors by issuing debt, called bonds.

When you invest in bonds, you’re loaning money to the issuer for a fixed period of time. In return for your loan, the issuer will pay you a fixed rate of return as well as the money you initially loaned them.

Because of their guaranteed, fixed rates of return, bonds are also known as fixed income investments and are generally less risky than stocks. Not all bonds are “safe” investments, though. Some bonds are issued by companies with poor credit ratings, meaning they may be more likely to default on their repayment.

Commodities

Commodities are agricultural products, energy products and metals, including precious metals. These assets are generally the raw materials used by industry, and their prices depend on market demand. For example, if a flood impacts the supply of wheat, the price of wheat might increase due to scarcity.

Buying “physical” commodities means holding quantities of oil, wheat and gold. As you might imagine, this is not how most people invest in commodities. Instead, investors buy commodities using futures and options contracts. You can also invest in commodities via other securities, like ETFs or buying the shares of companies that produce commodities.

Commodities can be relatively high-risk investments. Futures and options investing frequently involves trading with money you borrow, amplifying your potential for losses. That’s why buying commodities is typically for more experienced investors.

Real Estate

You can invest in real estate by buying a home, building or a piece of land. Real estate investments vary in risk level and are subject to a wide variety of factors, such as economic cycles, crime rates, public school ratings and local government stability.

People looking to invest in real estate without having to own or manage real estate directly might consider buying shares of a real estate investment trust (REIT). REITs are companies that use real estate to generate income for shareholders. Traditionally, they pay higher dividends than many other assets, like stocks.

Mutual Funds and ETFs

Mutual funds and ETFs invest in stocks, bonds and commodities, following a particular strategy. Funds like ETFs and mutual funds let you invest in hundreds or thousands of assets at once when you purchase their shares. This easy diversification makes mutual funds and ETFs generally less risky than individual investments.

While both mutual funds and ETFs are types of funds, they operate a little differently. Mutual funds buy and sell a wide range of assets and are frequently actively managed, meaning an investment professional chooses what they invest in. Mutual funds often are trying to perform better than a benchmark index. This active, hands-on management means mutual funds generally are more expensive to invest in than ETFs.

ETFs also contain hundreds or thousands of individual securities. Rather than trying to beat a particular index, however, ETFs generally try to copy the performance of a particular benchmark index. This passive approach to investing means your investment returns will probably never exceed average benchmark performance.

Because they aren’t actively managed, ETFs usually cost less to invest in than mutual funds. And historically, very few actively managed mutual funds have outperformed their benchmark indexes and passive funds long term.

How To Think About Risk and Investing

Different investments come with different levels of risk. Taking on more risk means your investment returns may grow faster—but it also means you face a greater chance of losing money. Conversely, less risk means you may earn profits more slowly, but your investment is safer.

Deciding how much risk to take on when investing is called gauging your risk tolerance. If you’re comfortable with more short-term ups and downs in your investment value for the chance of greater long-term returns, you probably have higher risk tolerance. On the other hand, you might feel better with a slower, more moderate rate of return, with fewer ups and downs. In that case, you may have a lower risk tolerance.

In general, financial advisors recommend you take on more risk when you’re investing for a far-off goal, like when young people invest for retirement. When you have years and decades before you need your money, you’re generally in a better position to recover from dips in your investment value.

For example, while the SP 500 has seen a range of short-term lows, including recessions and depressions, it’s still provided average annual returns of about 10% over the past 100 years. But if you had needed your money during one of those dips, you might have seen losses. That’s why it’s important to consider your timeline and overall financial situation when investing.

Risk and Diversification

Whatever your risk tolerance, one of the best ways to manage risk is to own a variety of different investments. You’ve probably heard the saying “don’t put all your eggs in one basket.” In the world of investing, this concept is called diversification, and the right level of diversification makes for a successful, well-rounded investment portfolio.

Here’s how it plays out: If stock markets are doing well and gaining steadily, for example, it’s possible that parts of the bond market might be slipping lower. If your investments were concentrated in bonds, you might be losing money—but if you were properly diversified across bond and stock investments, you could limit your losses.

By owning a range of investments, in different companies and different asset classes, you can buffer the losses in one area with the gains in another. This keeps your portfolio steadily and safely growing over time.

How Can I Start Investing?

Getting started with investing is relatively simple, and you don’t need to have a ton of cash either. Here’s how to figure out which kind of beginner investment account is right for you:

• If you have a little bit of money to start an account but don’t want the burden of picking and choosing investments, you might start investing with a robo-advisor. These are automated investing platforms that help you invest your money in pre-made, diversified portfolios, customized for your risk tolerance and financial goals.
• If you’d prefer hands-on research and choosing your individual investments, you might prefer to open an online brokerage account and hand-pick your own investments. If you’re a beginner, remember the easy diversification that mutual funds and ETFs offer.
• If you’d prefer a hands-off approach to investing, with extra help from a professional, talk to a financial advisor that works with new investors. With a financial advisor, you can build a relationship with a trusted professional who understands your goals and can help you both choose and manage your investments over time.

Regardless of how you choose to start investing, keep in mind that investing is a long-term endeavor and that you’ll reap the greatest benefits by consistently investing over time. That means sticking with an investment strategy whether markets are up or down.

Start Investing Early, Keep Investing Regularly

“Successful investors typically build wealth systematically through regular investments, such as payroll deductions at work or automatic deductions from a checking or savings account,” says Jess Emery, a spokesperson for Vanguard Funds.

Regularly investing helps you take advantage of natural market fluctuations. When you invest a consistent amount over time, you buy fewer shares when prices are high and more shares when prices are low. Over time, this may help you pay less on average per share, a principle known as dollar-cost averaging. And “[dollar-cost averaging is] unlikely to work if you are unwilling to continue investing during a downturn in the markets,” says Emery.

You also should remember that no investment is guaranteed, but calculated risks can pay off.

“Over the last 30 years, an investment in the SP 500 would have achieved a 10% annualized return,” says Sandi Bragar, managing director at wealth management firm Aspiriant. “Missing the 25 best single days during that period would have resulted in only a 5% annualized return.” That a reminder not to sell your investments in a panic when the market goes down. It’s incredibly hard to predict when stock values will increase again, and some of the biggest days of stock market gains have followed days of large losses.

Good investing begins by investing in yourself. Learn about the types of retirement accounts. Get your emergency savings squared away. Create a strategy for paying down your student loan debt. And with those key financial tools in action, you can start investing with confidence—putting the money you have today to work securing your future.

Hawaii faces a precipitous economic cliff at the end of this week, with federal money that’s provided some $1.3 billion to unemployed workers in Hawaii over the past several weeks set to run out by month’s end. That’s in addition to about $2.5 billion in SBA loan money that mostly ran out in June.

The good news: Hawaii has billions in additional CARES Act money available to soften the fall. The bad news: almost all of that must be spent by the end of December.

Gov. David Ige said he recognizes this: the first drop comes when the state loses the first chunk of money, which has provided $600 per week extra on top of normal state unemployment benefits, and the second when the rest of the CARES Act funding runs out.

“It definitely will be tough,” Ige said. “And it will get tough again.”

Hawaii food drives, such as this one at Aloha Stadium, have attracted thousands seeking help,

Ronen Zilberman/Civil Beat

Now, state officials and nonprofit executives are working feverishly to soften the second fall coming at year’s end. This means accounting for the additional pools of money – an onerous task given the billions of dollars involved — and making sure the money not only gets to the public it’s intended to help but also is spent on time and according to federal requirements.

“My fear is if we’re not able to spend these funds by the end of the year, we’ll lose millions and millions of dollars,” said House Speaker Scott Saiki, who co-chairs the House Select Committee on COVID-19 Economic and Financial Preparedness.

Such money is vital for the state’s economy. As much as Hawaii has suffered due to COVID-19 – statewide unemployment went from 2.3 % in March to 23.6% in April before settling back to 14.4% in June – the state has also been buoyed by a massive amount of federal aid under the CARES Act.

Hawaii has received so much money in fact that it’s hard to account for all of it.

One source of information is the state Office of Federal Awards Management. From a few bigger pots of money alone, the office reports, Hawaii has gotten well over $7 billion. That includes $1.3 billion in supplemental state unemployment benefits, commonly called “plus-up” money, and $2.5 billion awarded under the U.S. Small Business Administration’s Paycheck Protection Program.

But that doesn’t include some other massive amounts. For instance, there’s also about $654 million, split between two types of aviation industry aid, approved for Hawaiian Airlines. That included $290 million to be used to pay employees and up to $364 million in loan funding to provide cash for operations.

Accounting for everything and making sure it’s spent properly is such a daunting task that Saiki’s House committee set up a special subcommittee just to do just that.

Lauren Nahme, the subcommittee’s chair, said there are billions of additional dollars not going through the state.

“When we add all of it up, it’s looking more like $9 billion,” said Nahme, who is also vice president of strategy and innovation for Kamehameha Schools. “And there may be a couple of billion more that we’re getting straight from the (U.S.) Treasury.”

The Hawaii Data Collaborative, a Honolulu nonprofit, is also trying to account for all of the money, said Jill Tokuda, a former Hawaii Senate Ways and Means Committee chair who is working as a consultant for the collaborative. She said her group and Nahme’s are working to reconcile data gathered by the state awards management office; Eugene Tian, the state economist, and the office of U.S. Sen. Brian Schatz.

Former Hawaii Sen. Jill Tokuda, a former Ways and Means Committee chair, is helping account for billions of federal dollars Hawaii has received.

Stewart Yerton/Civil Beat

Tokuda tentatively pegs Hawaii’s total at about $8 billion but acknowledges there could be more, especially grant money that has gone to individual businesses.

“We have to have a common understanding and unified approach to how we’re monitoring and tracking this,” Tokuda said. “This coordinated effort is critical.”

With more federal funding likely to come, Hawaii needs to show the federal government it can manage the money well to assure the state can receive more when additional money becomes available, she said.

“There’s going to be additional iterations of federal support going forward for the next 12 to 18 months,” she said.

The fallout from COVID-19 has devastated Hawaii’s small businesses. We spoke to three business owners struggling to survive amid the economic crisis.

For now, the staggering amount of money being funneled through state agencies is supporting scores of local programs and jobs. One example: an award of about $829,000 for a telehealth resource center run through the University of Hawaii.

The pandemic and stay-at-home orders have increased demand for telehealth services, in which doctors perform examinations — or even treatments, like physical therapy sessions — by phone or video call, said Christina Higa, director of the Pacific Basin Telehealth Resource Center, which received the funding.

Doing online medicine is a unique activity, with its own billing codes, software and red tape, Higa said. While big hospitals and health organizations have the capacity to deal with this, she said, individual doctors offices and places like nursing home don’t. Part of the money is going to hire people to reach out to these providers to give technical assistance.

“There’s been more progress in the last few months than there’s been in a decade” before that, Higa said.

Another example, Tokuda said, is money for child care. With schools shut down for months and parents needing to work, there’s been an extraordinary demand for child care services, she said. At the same time, costs to operate such facilities have risen because of protocols needed to deal with COVID-19. Those include cleaning policies and lower teacher-to-student ratios.

The state has managed to provide tens of millions of federal dollars to child care providers to help offset unexpected costs, Tokuda said.

That includes $15 million from a pool of relief money and $11.9 million in Child Care Development Block Grant money. But when that money runs out at year’s end, child care services will be back where they started, and demand for their services and their need to follow costly protocols suddenly won’t just go away.

“We all know that Jan. 1, isn’t some magic time machine where everything goes back to normal,” she said.

Loss Of CARES Act Money Could Drive Employees Back to Work

While officials are preparing for the worst, there are things that will mitigate the problems, both in the short and long term. The Legislature has approved a $100 per week bonus for unemployment insurance recipients as well as up to $500 per month housing rental assistance for those who qualify.

In addition, an unintended result of the extra $600 per week federal unemployment plus-up, is that many unemployed  workers have been able to collect more from unemployment insurance than they could earn when working — which has caused some employers to say they’ve had trouble getting workers to come back.

“I’ve heard from employers that employees have been reluctant to come back,” he said.

This could change when the plus-up money goes away, Ige said.

Finally, there’s the issue of more federal aid. Hawaii is hardly the only state facing hard times at the end of July, and Congress is working to put another package together. What that will mean for individuals and state and local governments will depend on the details, said Carl Bonham, the executive director of the University of Hawaii Economic Research Organization.

“There’s a cliff at the end of next year,” Bonham said. “Of course, we really don’t know how it’s going to change.”

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The extra money you save isn’t free. First, it comes from somewhere (usually your hard work). Second, assuming you would have worked for that money anyway, you could have spent it much more intelligently and enjoyably. Put another way, the “extra” money represents fun, fulfilling, and memorable experiences you could have had but didn’t.

We will all die—so would you rather die with tens of thousands of dollars to your name, or die with zero after having spent the money on additional adventures or generous gifts during your lifetime?

Put that way, most people would pick option No. 2—even the thoughtful, self-disciplined people I am calling overly prudent.

When I first moved to New York City after college, I was like that, too, taking pride in how much money I was managing to squirrel away on my meager salary as a peon on Wall Street.

Luckily, my older and much wiser boss set me straight. In the unvarnished language of Wall Street, he explained why I must be the worst kind of idiot to be saving that money. I was on track to earn much more in the coming years, so it was stupid to rob my poor young self to give that money to my older, richer self, he said.

This slap in the face was one of the biggest turning points in my relationship to money.

Even if you doubt that your future income will be higher than it is now, being overly prudent sets you up for living a life of unnecessary levels of personal sacrifice. Sure, it’s smart to save some money now so you can enjoy more in the future—but past that point, delay amounts to diminished gratification and missed opportunities.

Regrets that can’t be undone

For example, in my 20s, before I fully saw the light, I passed up a chance to backpack through Europe with my roommate, who traveled for two months and had the adventure of a lifetime. Missing out on that trip is one of my greatest regrets. Yes, I’ve traveled in Europe since, but there was no re-creating my friend’s trip; as a middle-aged guy, I’m too old and too bougie to enjoy staying in youth hostels even if they’d let me!

If you have similar regrets of experiences missed, you know that delaying gratification can mean no gratification at all. At the extreme, if you save your whole life for a dream trip to Paris, you might find yourself too frail to actually travel to Paris, or to enjoy the great city at all once you’re there.

The ultra-rich, who you may not think of depriving themselves, nonetheless suffer from the consequences of over-saving. No matter how generous they are, they are bypassing opportunities for doing even more good in the world—unless they plan to give all their wealth away while they’re alive. What’s more, if they continue to exchange their time for even more money, they are foolishly depriving themselves of many wonderful experiences they could be having with the money they already have.

Being overly prudent isn’t a problem for just the ultra-rich, of course. Americans’ median net worth keeps climbing into their 70s. (Some may say they are saving for unexpected medical costs, a nursing home, and the possibility of a very long life, but that makes them an insurance company with a client of one—a needlessly costly way to manage risk, considering alternatives that include annuities, long-term care insurance, and the various safety nets your tax dollars pay for.)

So it’s no surprise that a large percentage of Americans die with far more than zero, as we can see from inheritance data. The median inheritance is more than $60,000. That’s some serious over-saving, particularly because the median age of getting an inheritance is 60. Is it really wise to save so you can give money to a 60-year-old?

I’m determined to die with zero, or as close to it as humanly possible, so any money I want to give to my loved ones I’ve either already given them, continue to give them, or put into a trust for them to get at an age when they’re young enough to get the most out of it.

So how do you avoid the pitfall of over-saving without leaving yourself high and dry in your old age? My best suggestion is to know what you need to save for necessities. I’m talking about the basics you need for survival: groceries, not restaurant meals, for example, and a decent roof over your head, not a mansion on the beach.

This isn’t to say you can’t and shouldn’t save more for a better lifestyle; it’s just that the whole point of figuring out how much you’ll need to survive on is to know what it takes to avoid the worst-case scenario and to allay your direst fears about old age. Once you’ve got those basics covered, you can start adding money for what you actually want.

Now read:Try summing up your retirement motto in just 7 letters

Go beyond a bucket list

What do you actually want? This is a huge question that most people don’t give nearly enough thought to. You might have a bucket list full of experiences you want to have before you die, but have you thought about when you’ll have each of those experiences? Do you want to take that trip to Paris in your 40s, or your 60s? Do you want to learn to tango in your 20s, or your 50s?

I urge everyone to think about their life experiences in terms of such time buckets. Doing that helps you get more out of life in two crucial ways.

First, you wake up to the reality that timing matters. Because everyone’s health declines with age and because tastes change over time, the optimal times for many experiences are sooner than we’d like to imagine. This gets even easier to see when you look back on your past. Do you remember what you used to love doing as a kid? Whether it was playing hide-and-seek, collecting Matchbox cars, or swinging high on playground swings, the odds are good that you’ve moved on to other interests.

I’ve learned my lesson not to keep postponing certain experiences. And my growing daughters, who no longer want to watch the children’s movies we used to love watching together, are a frequent reminder of how quickly windows of opportunity for certain experiences close. I now time-bucket my life, and re-bucket it when circumstances change.

Slotting experiences into time buckets also forces you to plan your earning and your saving with purpose.

The last thing you want when you reach the end of your days on this planet is an account full of money yet a life short on the wonderful experiences you wanted to have but failed to plan for.

Bill Perkins is a hedge-fund manager, high-stakes poker player and the author of “Die with Zero: Getting All You Can from Your Money and Your Life”. Follow him on Twitter @bp22.

Now, another thing we should talk about is where to house your long-term savings. If you have access to a 401(k) through your job, that’s a good bet, as that will allow you to save in a tax-advantaged fashion. (An IRA is a good choice as well, though with an IRA, you’re limited to $6,000 in annual contributions if you’re under 50, or $7,000 if you’re 50 or older). That said, with a 401(k), you won’t be able to access your money until you’re at least 59 1/2. Withdraw funds earlier, and you could face costly penalties.