In the initial days of social isolation, I was quite happy to stay at home. Pandemic allowed me to stay at home after more than a decade. I could devote some time to self-care and self-analysis. I am working for the last ten years and have saved money in my emergency fund. So, I was not that worried about my financial situation. I assumed that the shutdown would be there only for a month or so, and then everything would get back to normal. But that didn’t happen. Several months later, I am still at home, claustrophobic, and missing my workspace at the office.
I was a confident woman five months back. Now, my confidence level has gone down due to several reasons. What will happen if I don’t have a job next month? Will I get a paycheck in the next month? Will I get work if my employer asks me to quit? So many questions and answers are hardly there.
Thanks to my meticulous planning, I am still in good financial shape. Still, doubt, fear, and anxiety perplex my mind. The situation is not normal after all. I have learned a few personal finance lessons as well from the pandemic, which I will share with you guys. I feel it’s necessary to learn lessons from our bad times for our own good. My savings helped me to survive the last few months. But, I have to be careful in the future also. I have to implement the lessons in my life. Otherwise, I may not be able to survive another economic crisis.
Lesson 1 – I will make extra payments on the highest interest debt
Before the lock down, I have only focused on making extra mortgage payments. I have not given attention to how much extra I paid on the mortgage since my income was good. However, the situation changed after the pandemic, and I was forced to calculate every penny. In the last few months, I realized that I have paid more toward the lowest interest rate debt like a mortgage and ignore high-interest rate debt like credit cards. As a result, I have to spend a substantial amount of money on credit card payments.
Let things get normal a little bit. I will try my best to get rid of the credit card debt as fast as I can.
Lesson 2 – I will keep liquid cash in my hand to survive for a year
I have always saved money for building my emergency fund. And, that has helped me to survive in 2020. But, I am not too hopeful about 2021 also. The post-pandemic era will be equally tough to handle as everyone is shaken financially. It will take a couple of years to get everything back to normal. But, I have not saved enough money to survive for a couple of years. My emergency fund is enough to cover my expenses for another three months. What will I do after that?
I have learned my lesson. I will try to build an emergency fund that will last for at least one year. Incentives, employee benefits, and bonuses are not there this year. So, I have to manage everything with my paycheck and emergency fund. But the emergency fund won’t last long. I have to replenish it fast.
Lesson 3 – I have to think about passive income streams
I have immense gratitude for my employer. He has not yet fired anyone or asked for pay cuts. However, nobody can forecast the future. Everything depends on the business revenue, and if that is not there, our jobs will be at stake. All the employees of the organizations are giving their best, and so am I. However, all the perks are gone. Now, I am realizing that if I had worked on building a passive income stream in the past, then the lack of employee benefits wouldn’t have affected me.
I will work on building a passive income stream. I need to consider a few side gigs as well. A 9-5 hour job is not enough to overcome a financial crisis.
The biggest lesson that I have learned in the pandemic is that life is our most valuable treasure. Money can give you comfort, but it can’t assure a long life span. So, treasure your life and take care of your loved ones. Forget your ego, jealousy, hatred, anger, and all other negative emotions. Life is beyond all these things. Lead a meaningful life with everyone.