• Stephanie Hinds

4 ways COVID-19 changed the way I see money

I’ve always been an avid budgeter.

That doesn’t mean I didn’t exceed it at times (okay, many, many times), but it does mean there was a budget in place.

To be precise, there’s been a budget in place since I was 17. Even in my teenage years, I wanted to make sure that I had a plan for every dollar I was bringing in doing everything from serving tables at Shoeless Joe’s to taking orders for Pizza Nova.

When COVID-19 hit, it completely changed my relationship with money. The shutdown of malls, restaurants and parties helped to put a lot into perspective. And being lucky enough to not have my employment or income endangered by the pandemic really changed my outlook on things.

Here’s what COVID-19 taught me about money.

I can live on less than I think I can

Prior to the pandemic, I used to leave myself $250 a week for miscellaneous expenses. The term “miscellaneous” is subjective, but for me, it covered gas, groceries, clothes, gifts, unexpected expenses and pretty much everything that wasn’t a recurring, fixed payment. So in my mind, $250 a week sounded reasonable.

I mentioned this in passing to my parents one day and they looked at me like I was crazy. It wasn’t until my dad pointed out that my weekly fund added up to $13,000 annually that I realized this was a) a lot of money and b) would be much better off allocated elsewhere (more savings? A travel fund?) Did I have a $13,000 wardrobe? Certainly not. Had I eaten $13,000 worth of food? Well, probably. But did my miscellaneous spending category really need to be that much? Absolutely not.

When the pandemic hit and everything shut down, I realized that by staying out of malls and restaurants, I could cut my miscellaneous spending in half. Also, rather than having one big umbrella category for things like gas and groceries, I gave them their own individual places in my budget, forcing me to make better selections in the grocery store. Simple things like waiting until items were on sale, buying in bulk and making better use of freezer and pantry food were going a long way.

My budget is my best friend

I’ve tried my hand at Mint, MoneyWix and I’ve even used my bank’s simple budget system, built right into the RBC app. But for some reason, none of them compared to my simple, handy dandy Windows Excel spreadsheet I created in high school. While those apps and websites may work for some people, my goal in budgeting has always been very simple:

  1. To plan how I’m going to spend and save my money

  2. To see and track where my money is going

I didn’t need the bells and whistles of all the other crap that came with the apps and websites.

My budget has been my best friend during this pandemic because it’s let me see - with clear, simple figures - everything I need to. If I notice I’ve spent too much on takeout, it pushes me to rethink how to make my money work better for me, something especially useful during a time like this. Maybe it's as simple as adding more to my grocery category, or cutting down on the trips I take in my car to save on gas.

One additional thing my budget has helped me to do is plan ahead, which brings me to my next point.

Plan ahead

Every finance expert I’ve ever read or followed suggests saving 3-6 months’ worth of monthly expenses. To me, that sounds impossible, but that’s what they recommend (mind you, Dave Ramsey also suggests allocating just 25% of our income to housing…he’s clearly a stranger to Toronto's real estate market).

But planning ahead doesn't need to be that big of a production. Have a few bucks left over from your miscellaneous cash for the week? Toss it into a savings account. Received a GST cheque you weren't expecting? Save it for a rainy day.

It’s crucial to have something put away to ease the blow of a sudden layoff, an unexpected pregnancy, a car repair or a global pandemic that brings the world to a screeching halt. You can start small. You should start small. Take a look at the balance on your credit card, decide on a date you want that paid off by and work your way backwards to see that goal through. Look at your income. Maybe you want to make more money over the next two years. Start speaking to colleagues or other professionals in your industry to see what your next big move should be. Or, if after all of this, the most important thing for you is to just save, decide on an amount that you’d like to have tucked away and start working towards it.

Prioritize and simplify

I thought about separating these into two categories. But the more I thought about it, the more I realized that prioritizing is simplifying.

I used to stop into malls on the way home. I would call up a girlfriend and plan for a drink on a patio. I’d go out for dinner like it was going out of style and then head out to listen to some music all in a Friday night.

This was fun, this was great, but it was expensive and I can assure you there will be a lot less of that.

I feel like I’ve learned the true value of a dollar, despite feeling I had known it all this time. But also, I've learned which experiences matter most to me. Do I enjoy steaks? Yes, with a glass of the house red, please. But that money would be better invested into a small condo, some mutual funds, or travelling.

The other day, while chatting with my boss, she said a phrase that I just know will stick with me forever. We were talking about teenagers when she said at that age, many people "can't see the forest for the trees."

The $50 dinners and $20 shirts don't seem like much when you're at the restaurant or in the store. But after not having the luxury of spending on either, I've seen how those things can add up over just a short time. Imagine six months or a year.

After this experience, I can see the trees. The everyday things like going to work, maintaining my connections to people, making smart choices for myself and my daughter. But I can also see the forest. I see why it's important to go to work. The importance of maintaining those connections, really seeing the value my relationships add to my life. And why the decisions I make now will matter in the future, even when it's uncertain.

#COVID19 #personalfinance #millennialfinance #realestate #motherhood

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