This moment in our history has felt so surreal.
To me, it has re-emphasized, on a very emotional and visceral level, the importance of understanding and having control of my money. This month, March 2020, marks one year since I (kind of) became debt-free. This is also the month, this year, where I finally completed my $5,000 emergency fund, just in time to be able to cover potential emergencies that seem all the more likely during COVID-19.
Personal finance writers everywhere emphasize the fact that we don’t know what will happen moment-to-moment, and that preparation is a necessary part of financial health.
And I have always agreed, intellectually. But part of me has always known that so many of these emergencies were avoidable if you were good with money– my financial wounds from childhood were often a result of poor preparation and lack of understanding on the part of my parents. So if I learned everything and took all the steps to have control, I could avoid 95% of these unexpected expenses.
And that sense wasn’t wrong– but here we are, in the 5%, and I see more clearly how fickle it all can be. Obviously, the ramifications of COVID-19 on both a personal and global level are much bigger than my finances, but one thing at a time.
I am full of gratitude that I, in all likelihood, will not lose my job due to this pandemic. I will still receive a paycheck. And I am, right under the wire and at the last second, fully funded for emergencies. I do not have any debt. Because of these factors, I know how fortunate I am.
Still, I need to think of the possible scenarios and make a contingency plan that will cover me for each.
So far, COVID-19 has not affected me financially. The only adjustment I’m making to my budget is moving a little money around to allow for more grocery money this month, in the case that we need to self-isolate or self-quarantine.
A very possible scenario that could affect my finances is that the Spring sports season gets cancelled in my county. I am praying that this doesn’t happen (coaching volleyball has been the most fun part of my March so far), but in the case that it does, I may not receive the stipend for the position. I will either receive the full stipend, a partial stipend, or none. Because I had designated my stipend as a big part of my summer money, I may suddenly be left without everything I need to maintain my lifestyle in the summer.
If this ends up being the case, I will designate some of my Emergency Fund money to cover expenses in the summer, and will refill it during fall. I will also not maintain the same savings rate during summer, in favor of keeping money in my EF. This hurts to say– refilling my EF has been a painstaking and slow process, and maintaining my savings rate in the summer months was a huge goal for me– but it’s the least painful plan I can come up with.
As far as investing goes, I am contributing to my Roth IRA at the same rate. Unlike typical market downturns, COVID-19 comes with a lot of personal question marks for me, which means I am not focusing on investing extra money. In a global health crisis, I don’t think this is wise in my personal money plan. Consistency is the goal for now– if anything, if the situation worsens, I may actually invest less in favor of stacking more cash in my EF.
More updates to come if anything changes.
Stay safe out there, friends. If you need to get ahold of your financial life, please contact me and I am happy to offer you some advice during this crazy time.
If you want to get started on your own, click below for my budget template.
Here’s to next week bringing more answers and fewer questions 🙂