I am very fortunate to have a job during this quarantine period. People are impacted in more than one way. From a high level of unemployment and stress to loss of loved ones, we are going through a period of trial. For some of us, it is time to slow down and re-evaluate our lives. It is also time to rethink, refocus, restructure our finances.
How Safe is Your Job?
The jobs we thought were safe disappeared overnight. Income sources dried up as the country implemented stay-at-home orders. The stock market plunged, wiping away years of gains. As a country, the pandemic is affecting our economy and health. But the impact is even more prevalent in our daily lives; from where we can go, what we can do while out, the pandemic is shifting us to a new normal that might stay with us for a while.
Most of us were not prepared for this type of change. We did not have enough savings; we were relying on a single source of income; we were in debt; we might not have had an emergency fund, etc. It is a wake-up call to make sure that we are prepared better for what is to come next. It is time to activate our SUPER powers in all areas, especially our finances.
Looking At The Positives
There are some positive financial decisions you can make if you still have your income. As we continue to stay home and have limited access to entertainment, this is an opportunity to save and invest more.
Personally, a few things that are saving me money in this period are:
- Daycare: schools are closed, and so are after-school care. My daughter is at home full time, which means the money I usually pay for daycare stays in my pocket. I can choose to spend it in some other ways or save it. I am doing the latter.
- Stimulus check: the government is trying to help the economy by increasing purchase power. Since I still have my regular income, I used the funds to increase my emergency savings. I do not know how long this will last or how long I will keep my employment.
- Transportation: working from home has allowed me to save on gas and train expenses. It might not seem like much, but if you look at it for 6-12 months, it is significant. I am using these savings to invest in myself through courses.
- Lunches: I wasn’t spending a lot on these (I try to pack my lunch), but lunch downtown DC is not cheap. Now I get to eat at home and save money. Small savings do add up, so don’t discount them.
What If You Were Not That Lucky?
If you have debt, use the funds to pay debt first. If you have enough in your emergency fund to cover six months of living expenses, invest the money (stocks are on sale these days). Everyone’s situation is different, so you want to make sure your decisions are based on your needs, not what everyone else is doing.
There are new guidelines that allow people to defer payments for rent, utilities, student loans, car loans, or withdraw from 401K without penalties. If you don’t have to, DO NOT try to “take advantage” of that. The government is deferring payments, but not eliminating them. If you think it is hard to pay one-month worth of bills, do you think it will be easier to pay three months’ worth of bills? Not making payment when you can, is encouraging bad habits, which can only lead to bad financial decisions. You are not saving the money; you are more likely to use it for unnecessary things, then regret the spending when the bills come due.
It Will Get Better
I would not end this article without acknowledging that not everyone is lucky to have a job during this difficult time. If that’s you, don’t give up! This pandemic shall pass; you will get to the other side. You will overcome this. You might be in survival mode for a little while, but it will not be your state forever. Use this time to think of what you will do differently, once you’re back to work and the income starts coming in. Having a plan now will make all the difference in the future. You are learning the hard way but it’s those lessons learned the hard way that you will never forget. Keep pushing, keep hoping, and do whatever you can to prevent this situation from repeating.
“Strength grows in the moments when you think you can’t go on, but you keep going anyway.” Karen Salmansohn
