Saving strategies
We’re more than a year into the global pandemic and some people are struggling financially. Many people have lost their jobs or have seen their hours cut. I saw my income drop by 75% during the peak of the pandemic. I’ve managed to rebound since then, but I had to make some lifestyle changes a few times. Here’s how I’ve adjusted my finances since the outbreak of COVID-19.
I redid my budget
Shortly after the outbreak of the pandemic, most of my clients had to cut their freelance budget. Even though I knew this was just a temporary thing, I had no idea how long it would last. With a reduced income, I had to redo my budget to get by.
Fortunately, a lot of expenses that I had were also cut due to the global shutdown. Daycares were closed, I wouldn’t need to advertise as much, and I wouldn’t be heading downtown to meet clients for lunch. This saved me a fair amount of money, but I also had to cut my RRSP contributions and fun expenses such as eating out.
There were a few months where I had to use some of my savings, but I was still in a good position. By tracking my expenses diligently during the last year, I’ve mostly kept my budget balanced.
I built up my emergency fund
Traditionally, I usually keep three months’ worth of expenses in a savings account in case of an emergency. While I had no problem dipping into this account during the pandemic, I wasn’t sure how long this money would last me. As weird as it sounds, I tried to increase my emergency fund while things played out.
As a freelancer, I’m often paid a month or two after I’ve completed a job. That meant I still had some cash coming in at the start of the pandemic. Since I had already adjusted my budget to minimize my spending, I put all the extra money towards my emergency fund. I wasn’t sure how long the pandemic would last, so I figured having an extra buffer would be beneficial.
Even when the pandemic is over, I plan to keep this increased emergency fund as is. Having this extra money available will give me some peace of mind after seeing my income drop so dramatically.
I looked for more work
As a freelance writer, the two topics I cover the most are personal finance and travel. Both of these sectors were deeply affected by the pandemic, so I knew I had to pivot if I wanted to secure some new work. I browsed online for any writing gigs available, and I reached out to old contacts to see if they were looking to hire someone.
This was honestly a new process for me. Most of my clients found me via my website or through references. There was a lot of rejection, but after a few months, I was able to secure some new work writing. This didn’t get me back to my pre-pandemic income, but it was good enough.
Admittedly, during my job search, I also considered other income streams. I casually looked into part-time work in my old industry (media) which was considered an essential service. I even thought about doing food deliveries for Uber. I was in survival mode and was willing to do anything.
I started to spend again
Throughout the entire pandemic, I tried to spend as little money as possible. I had just gone months with limited income, so I was trying to hoard every dollar. While this is great from a financial perspective, I realized that it wasn’t the best idea for my mental health.
Every week I would menu plan and then spend part of my days cooking. I would also try to work when I could while watching my daughter all day. My bank account was growing, but I was not enjoying myself. One weekend, my wife and I decided to treat ourselves to our favourite restaurant. Getting takeout from them was a bit of a pain since the restaurant wasn’t close to where we lived, but once we started eating, it brought back so many great memories.
I know it may sound a bit silly to some, but spending is fun. I’m in a fortunate situation where I can now afford to spend again. Enjoying a milkshake while my daughter plays or ordering food from a restaurant we haven’t tried has helped me cope with the pandemic.
The bottom line
Eventually, this pandemic will pass, and things will slowly return to normal. However, when it comes to my finances, the experiences I’ve had in the last year will likely last me a lifetime. I thought I had things figured out, but then life threw me a curveball. Making quick adjustments has helped me get through things.
The views expressed in this article are those of the author.