During quarantine, I have had the time to really think about my finances and my future. I opened up to my mom and asked her opinions and suggestions about it.
We got into a lengthy conversation talking about my debts, my income, and future opportunities both in the United States and the Philippines.
Thank God we had that talk because I’ve realized some lessons about personal finance amidst this pandemic.
I want to share those lessons with you because it will help you understand what you can do for yourself and might help you realize what you’re missing.
TLDR; Here’s a video version of this article for your convenience!
My 6 Money Lessons
The first lesson is: Saving for the worst.
This is what everyone calls “Creating an emergency fund” or “a rainy day fund.“
Basically, it’s money that you save in times of emergencies just like this pandemic, or a big medical bill, or any situation that you didn’t exactly planned for.
The rule that everyone follows is that when creating an emergency fund, you should save up at least 6 months worth of expenses, and that you should NEVER touch this fund unless you have to.
Only break the glass in case of emergencies!
I’ve really thought about this one because we didn’t expect Covid-19 to be this big. The effects of it globally is unprecedented and we still have no clue when this is going to end.
Luckily, I had saved up before everything became a mess. I’m already 1/6th of my way towards my $6,000 savings goal, and I continuously add at least $100 every month.
The second lesson is: Creating multiple income streams.
When my mom and I had our talk, this was one of the topics we went over. She knows what I’m currently doing to earn money. She knows that I have a social media agency and that I invest in the stock market.
When Covid-19 started, I wasn’t affected yet because the effects weren’t visible in the US at that time.
But as time progressed and the United States were hit by the pandemic too, income from my agency work declined a bit and recently, my dividend income took a hit as well since companies were cutting their dividends.
This was one of the eye-opening things for me because it made me realize that I was still wasting my youth.
I wasn’t doing as much as I could when I had the time and the opportunity to do so. I became too comfortable with my situation, thinking to myself that I’ll be okay.
But when reality hits you, it hits you hard.
That’s why I’ve started looking for other ways to make money and not just rely on my current streams. My mom and I talked about diversifying my streams when I have the chance. Because of this talk, so many ideas came up and it got me pumped up to take action.
One of the things that you can really take away during this is that when there are problems, there are also opportunities for you.
So really, try to diversify your income streams. Research industries that actually benefit when disaster happens and look for ways on how to capitalize on it. That way you aren’t tied to your work unlike others who only rely on one. When there is no work, there is no pay.
The third lesson is: Being self-reliant.
To me, this is a money lesson.
When most people think of money, they think it’s something that they work for and use immediately. But for me, my perspective on money is that it’s a tool that you can use to be free.
The truth is when you have a comfortable amount of money, you can be free, and live life the way you want.
And how being self-reliant ties to this is with being responsible with your money. When you are self-reliant, you act more consciously and more frugal. If you really think about it, this is how minimalism starts.
You start to understand that you can live with a few things. You’re more reliant on your own skills and what you can potentially do than relying on help from the government or other people, which in my opinion, promotes, to some effect, laziness and co-dependence on another entity.
That’s why for us right now, we’ve started planting our own vegetables so we can cut down grocery costs. (Filipino homes still have an abundant space for gardens, so we’re able to do this. Nice!)
Plus, planting your own food is quite enriching because it’s helping us psychologically (just looking at the greenery) and we’ve been learning how to properly garden too!
The fourth lesson is: Improving financial literacy.
You have an absurd amount of time right now, and that should be put to good use!
I’m not saying you should give up scrolling through Instagram or TikTok, or playing video games, or watching Netflix. You just have to add “learning about finances” to the list of the things you NEED to do.
If you have a book about personal finance, grab that book and read the first 2 chapters. Then do it again 2 or 3 days after.
If you’re on your phone a lot, look up some topics online about saving, investing, or managing your money. I’m sure at some point, you get bored looking at TikTokers doing the same challenges over and over again.
I had a slump for more than a month to be honest. All I did was watch Netflix and play video games with the family. I couldn’t focus on creating content at all!
But those fun times had to end, and I gotta go back to reality.
Watching Netflix and playing video games everyday is a nice idea, but it gets boring too at some point. It’s become repetitive to be honest.
So, I went back to the articles that I’ve saved before and looked at the discover of my google search. And I just went on reading different articles about business, personal finance, the stock market, economics and etc.
It’s fun to learn and it’s more fun when you’re learning something that concerns and excites you.
The fifth is: Consistency.
This is something that many people struggle with. And I’m not gonna lie, I struggled with staying consistent with my financial goals years before.
I wanted to do this, get to that income level, have many of that, and etc. Those “declarations” never amounted to anything because I frequently strayed off the path whenever I saw new opportunities online.
I didn’t focus on one goal, so I wasted my time and all the efforts I did on my previous financial goals.
Everything I listed here would not actualize in your life if you do not put consistent effort in them. If you consistently save money, you’ll save more money faster. If you consistently invest, you’ll see your assets grow. If you consistently improve your financial literacy, you’ll grow into a well-rounded individual ready to tackle anything.
The sixth and final lesson is: Living simple and spending wisely.
At the time of this writing, I was still stuck in the Philippines. One of the biggest news during this time was the shutdown of a very well-known and old broadcasting network (ABS-CBN).
Because of the shutdown, many of its employees, most notably the celebrities contracted to work there, are now without work.
I remember one celebrity who complained about the shutdown because this person would be unable to feed their family. Yet, this person owned cars and other luxury items.
While this is not the case with most celebrities, the point is that we all need to learn how to live simple and spend our money wisely. There is nothing wrong with splurging your hard-earned money, but you gotta make sure if it’s something that actually helps you long-term.
It is not certain if your work or business will live forever. So in order to shield yourself from that, make sure to spend your money on the right things. I’ve come to realize throughout the years that many of my material things don’t last and what’s worse is that new gadgets, clothes, accessories, and all that come out almost every month.
If we were to catch up to those trends all the time, we’d be broke before we even know it. It’s not worth it. I’ve come to terms with this and decided to just buy the things that really matter to me, my friends and my family.
Conclusion
My point in sharing these money lessons is that we should all prepare not only during times of disasters, but also during prosperity. I think that is the best time to actually prepare because you got more opportunity to do it.
We don’t know when this pandemic is going to end, so it makes sense if you start preparing if things don’t go the way you planned it. Your future is undoubtedly going to be shaped by this crisis as well since you will be part of a recovering economy.
Don’t let that discourage you though. Just think and move on.
Please stay safe and continue to better yourself. Even when we have problems around us, don’t forget to stay hopeful but also be practical.