Five Financial Lessons I Could’ve Only Learned During the Pandemic

At our most charitable, we could perhaps describe the last year as a…learning experience.

The various conditions caused by the pandemic really taught us all a lot about how we conduct ourselves, what kind of sacrifices we’re able to make, and how we were best able to keep ourselves entertained at home during the shutdown.

Among these biggest lessons included financial management. Even for those of us who were fortunate enough to remain employed during the pandemic, such as myself, we had to take a step back and really think about our priorities for spending.

Do I need to spend more money on entertainment now that I have fewer options to do so? Should I start a savings account in case things get worse? Is this a good time to do something like buy a car?

Whatever your individual financial situation, the pandemic had a lot to teach all of us – and they were lessons that could’ve only been taught during these stressful times. I’ve pulled together the five biggest lessons I, and my friends and family, encountered during this strange, strange year, and I hope they can be just as helpful to you!

Lesson 1: Learning to Prioritize

No matter your employment status during the peak of the pandemic, a lot of us needed to figure out what to focus on – and what we could live without – financially speaking.

Maybe it was due to the downtime letting us think things through better, maybe we needed to better control what we spent our money on, maybe it was a number of reasons. Think back to your time in quarantine, and remember the number of times you looked at your credit card statement and thought to yourself “you know, maybe I don’t need to be spending that $10 month”. Perhaps it was some streaming service you no longer used, or maybe you weren’t that impressed with your razor-of-the-month club anymore (and who REALLY needs five whole blades on a razor, anyway?). In my specific case it was one of those online game-subscription services I was no longer particularly impressed with, and in the case of a Financial Avenue blogger, it was expensive season tickets to soccer games that he couldn’t be going to anyway.

Knowing how I get about these things, I doubt I would’ve taken the time to go back and look through these little charges, and I wouldn’t have really appreciated how they add up. But now, even having that extra $15/month makes me feel a little better, especially if it was going towards games I wouldn’t even be playing anyway.

Lesson 2: Keep Growing That Rainy Day Fund

The pandemic reminded us that the proverbial “rainy day” can come sooner than expected, and without a lot of warning. Even those of us that were still employed had to find ourselves dipping into our savings for some unexpected costs over the pandemic; or worse yet, needing to dip into our savings to cover the expenses we’ve always faced even back when things were normal like rent payments or car notes.

Yahoo Finance sums it up better than I ever could: keep your emergency funds close at hand, and easily liquid so you can use it as needed. Either open a savings account to store them, or keep them around as investments that you can easily retrieve later, and make sure you have enough to cover at least a few months’ worth of expenses.

Lesson 3: Prioritize Your Debt

The monthly bills never stop, do they? Even right now during the pandemic (when we’ve all perhaps been hit hardest of all), your credit card providers still need their cut every month, and in a time of economic instability like this, it can be even harder to hit those payments – and just as hard to know which payments are most important.

Whatever your financial situation at the end of the pandemic, it’s important to work on paying down your debts as fast as possible. US Eagle recommends calculating the percentage of your monthly income that goes towards debt payments, and then working on the ones that take up the largest portion of that amount. (I admit I did this in reverse and paid off the ones I could clear out fastest – while I admit it was nice to have those fewer credit cards to worry about, it probably would’ve had a bigger impact on my finances to tackle the bigger problems first.)

Lesson 4: Think About How Much Stuff You Really NEED To Buy

It’s okay to admit that we all indulge in a little retail therapy every now and again – a name-brand necktie here, a new phone there, a big pile of Blu-rays you know you’ll watch one day. While this lesson can apply to even the most ideal of financial situations, during the pandemic it became almost a necessity to monitor your spending habits and really focus on the essentials.

As Dough Roller points out, these unessential/impulse purchases can really start to pile up on your credit card, especially during a pandemic when your ability to pay those debts down was limited to varying capacities. Avoid piling up on stuff at your house, and if you ARE giving into your temptations to buy some shiny new toy, try to avoid putting it on a credit card and increasing your debt repayment load.

Lesson 5: Find Ways To Have Fun WITHOUT Spending Money

Remember back in the days before the pandemic when all you needed to have a good time was to find a parking spot and then go spend a bunch of money? It seems so simple in hindsight, but as you’ve probably learned over the last 8-12 months, our options for going out and having fun can become very limited at the drop of a hat.

The upside to this, however, is that we’ve had to find ways to amuse ourselves without going out and spending a ton of money. Money Geek points out that this can be beneficial for families, as it encourages you to find ideas to, say, celebrate a kid’s birthday at home when they’re unable to go out for laser tag or bowling.

Even for people like me without kids, though, this can be a valuable lesson to learn, and one I might never have taught myself. There’s been so many nights where my girlfriend and I were content to just go for a walk downtown or by the boardwalk, or stay home to play video games and watch movies we already own, or simply catch up on some books we already bought but never got around to. It’s done wonders for our wallets, and it’s taught us to appreciate the little things in life – which probably sounds familiar if you’ve ever gotten advice from your grandparents that you were too young to appreciate.

I have to say, a lot of this advice seemed pretty obvious in hindsight, but it took something as big as a pandemic to really put it into perspective for me. I hope anyone reading this learned a little something too – and I hope we can all get back to what we love doing on the other side of this, with a little more financial insight this time around.