Money at 30: Silver Linings — How this Crisis Might Help My Finances in the Long Run
As I’m sure I don’t need to tell you, now is quite a strange time in America and other countries around the world. On the whole, things are decidedly not so great. At the same time, there have also been plenty of “silver linings” and pieces of good news that have emerged from this pandemic.
Personally, as I reflect on the past few weeks, I can already see some lessons I’m currently learning that I think will serve me well going forward. Thus, I wanted to share some of these thoughts and look at the “silver linings” of these troubled times.
Three Lessons Learned from the Current Crisis
Conserving and cutting back
Let’s start off with something happy: french fries are just amazing, aren’t they? If asked what my favorite food was, I might say “steak” or “pizza” but, truth be told, it’d have to be french fries — I can never really have too many of them. I tell you this because, lately, the self-restraint I’ve shown when consuming or preparing to consume my beloved fries really highlights my current mindset
Under normal conditions, I wouldn’t pay much attention to how many fries a reasonable person would make for a side dish, instead opting to fill my toaster oven tray to capacity. However, with grocery trips proving to be a hassle and such items regularly going out of stock, I’ve been carefully cutting back in a bid to make my supply last longer. After all, better to have some fries now than no fries later.
As silly as this specific example might be, I think it actually explains an important personal finance concept: learning to live with less. Although this goes hand in hand with prioritizing your spending, the truth is that, in most cases, any ability you have to make a cut is probably for the better. By exploring what the bare minimum for goods and services you don’t really care about is, you’ll have more to divert toward those things you do care about. Thus, it’s always nice to be reminded that I can get by with less.
I’ll admit that a great part of the success we’ve enjoyed during this time of quarantine can be attributed to good luck. For example, we ended up joining Sam’s Club only a couple of months ago — mostly due to an Amex Offer I had available to me. Furthermore, on one of our maiden voyages to the warehouse club, we decided to purchase a 40 pack of Charmin MegaRolls just because we happened to be out. Well, as you can imagine, that seems like an incredibly wise investment now as toilet paper is perhaps the hottest of hot commodities these days (meanwhile the bidet industry is booming if my Facebook feed is any indication).
While we may have lucked our way into preparedness so far, this whole event has really got me thinking about other ways to prepare for disaster. Sure there’s the tried and true emergency fund, but how else can we ready our finances for the unforeseen and the unprecedented? Granted, I don’t have all of those answers yet but you can bet it will be something I continue to consider throughout this crisis and well after.
Considering the worst-case scenario
Something interesting happened to me last week when I was looking at my latest credit card bill. Typically, I’ll either throw the mail away without even bothering to open it (for the record, I’ve signed up for paperless billing and don’t know why they still send me physical mail) or just glance at the balance due and then discard it. However, this time I happened to look closer at the minimum due and the math that showed how long it would take me to pay off the balance making just that payment and how much it would ultimately cost. To my surprise, the damage wasn’t nearly as bad as I would have assumed, adding only a couple of hundred extra dollars over the course of three whole years! Of course, this was on a balance of less than $1,000 but, in my mind, holding a balance even a day past the grace period would double or triple your amount due. As it turns out, that’s not quite the case — who knew?
Don’t get me wrong: I’m not suggesting that taking on credit card debt is in any way a good idea or that paying interest doesn’t (for lack of a better term) suck. Nevertheless, it was eye-opening to consider that what I had perceived as the worst-case scenario — carrying a credit card balance — might not actually be such a big deal as long as we had a plan to pay it off once things had recovered. In a way, I actually think that this revelation is a healthy one as it helps take some of the stress and sting out of the situation.
Fretting about money should never be the goal of personal finance. Instead the idea is to make money work for you. With that in mind, might it be worth it to pay a little extra if it makes getting through a rough patch a bit easier? I think it just might be depending on the situation.
For as trying as these times may be, there are still silver linings to be found. In my case, the upside of these past few weeks has been discovering or reconsidering aspects of my personal finances. Hopefully, when we do manage to move beyond this current crisis, these lessons will stick with me and make me better for it.