How Coronavirus Is Affecting My Financial Journey
Hey guys. I had some financial posts planned, but I figured I’d take some time to explain what I’m doing and how I’m shifting my money, and why I’m doing it.
So as many of you know, I’m currently aggressively paying down my student loans. I’m at just over $7k, down from a little over $11k when I first started. I’m snowballing any extra money I come across there to knock down the interest. My projected debt free date was going to be January 2021.
But that’s about to change.
First of all, the best laid plans, right? I made the projections based on the fact that I was constantly working overtime and paying cheap rent at the time. However, as months went by, work kept cutting my hours from 40-50 to 30-35 and I found myself with some razor thin paychecks that didn’t even cover all the gas I needed to get to work. So not only was I not able to truly snowball (just barely over the minimum), I couldn’t even save.
But now, in the midst of all of this coronavirus panic, I’m going to put a true pause on my snowball. Thankfully, my minimum has come down on my student loan payments so while I’m pausing my snowball, that’ll be an extra $60 at least to put towards savings and my EF. I’m doing some private house cleaning and private caregiving to try to hoard as much cash as I can. Am I worried about losing my job? A little bit. We’ve lost some business with nursing home clients and business has taken a turn.
I’m really sad to have to do this, but the last thing I want is to find myself with no viable cash. I will eventually get out of debt, I’m aware of that, but it’ll just take a little longer.
Here are some takeaways I’ve learned with everything so far:
- The $1000 emergency fund is not enough. It is the bare minimum and you should go for the 3-6 month emergency fund.
- Jobs are not stable, even if you think they are.
- Family is everything. Call your loved ones and tell them you love them.
Here are my recommendations for keeping calm and navigating the fallout of this mass hysteria:
1. STOP BUYING TOILET PAPER IF YOU DO NOT TRULY NEED IT RIGHT NOW. Seriously, aside from just adding to the panic, that is draining your budget.
2. Assess your expenses. I’d recommend this anyway if you’re starting a budget, but really go ham on cutting expenses. Trust me, Netflix will still be there when this all dies down.
3. I cannot stress this enough: do not look at your retirement accounts and make a panic withdrawal. My favorite money account on IG, @herfirst100k, made an amazing informational video on why you shouldn’t panic. Go check it out. I can’t advise based on the market, but I can say that you will, without a doubt, get taxed 10% for early withdrawal, especially if you have a traditional 401(k).
4. Once this all dies down, if you paused your snowball to build savings, drain it all down to $1000 and put it back towards your debt. Just like any other emergency, this one will die down and things will go back to normal.
I’m confident everything will be okay. I’m refusing to buy into the mass hysteria and just taking it day by day. I’m encouraging everyone to stay informed, stay calm, and remember that this is a season. I’m disappointed to postpone my debt-free date, but better late than never, right?
Have a great weekend, everyone!