Let’s admit it – this COVID-19 pandemic greatly affects everyone’s finances. From delayed paychecks, business bankruptcy to thousands of people losing their jobs, these economic setbacks will definitely affect each one of us.
In my previous post here, I mentioned that despite what’s going on with the world, I still consider myself very lucky 🍀 – but financially, it is a different story.
I got scammed. BIG TIME.
I lost my 50k last April 14th from a phishing scheme using a fake BDO email. For almost two months of sleepless nights, of crying, calling, emailing the bank, defending my side of the story – which was very exhausting btw, the result was still heartbreaking. I was not able to get my money back.
According to the FBI, cybercrime appears to have jumped by as much as 300% percent since the beginning of the coronavirus pandemic. Our increased usage and reliance on the internet give hackers more opportunities to scam people.
I may be wrong here, but I strongly believe that the reason why people commit crimes during this period is because of poverty. People lost their source of living, so they are desperate for some “easy money.”
Even if you were one of the lucky ones who got to keep your job or source of income, you will still need your own financial (recovery) plan in the future – just in case something like this happens to you.
And because of this, I am reevaluating the nitty-gritty details of my finances, because I don’t want to feel financially unstable in my life again.
Here are some of my #LearningItTheHardWay Takeaways:
Lesson #1: Rainy-Day Funds are Essential
First thing’s first, EMERGENCIES, like accidents, are sudden. No one knows what will happen until you realize you were already stuck in the middle of the storm. The question is: Are you even prepared to survive the storm?
An emergency fund is a money specifically and exclusively set aside in case of emergency. It’s untouchable even if you got short of cash for a monthly budget. It’s FOR – EMERGENCIES – ONLY.
Thankfully, as soon as I started in my present job, I committed myself to set aside a percentage of my income as my Emergency Fund. This made me able to still think clearly and realize that: losing this money may be depressing BUT IT IS NOT THE END OF THE WORLD.
Of course, 50K is a huge amount especially for someone who is just in her 20s – living alone, paying rent which is omgggg just so you know ☹
It was hell depressing for days but one day I woke up and as if someone had breathed hope in me and said: You will be okay. You are ready for accidents like this and thankfully you’re still alive.
And that’s how it dawned on me that the money I’ve been saving was actually for my sanity – for peace of mind and for my overall mental wellbeing.
I told myself: It was just money, not life nor health that was taken away from me. I can still build that 50K in a few months or so and I still have some of my savings and means to grow my money.
This kind of fuck-you-karma-will-hit-you-bigtime events will come crashing down on you when you least expect it but what matters most is you have a backup plan.
Lesson # 2: Multiple Streams of Income IS YOUR FRIEND!
THIS IS NOT JUST A TREND! If you’re one of those titas who are selling Ube Pandesal and Baked Sushi all over social media platforms, well, CONGRATULATIONS TO YOU!!!! A lot of people are picking up their side-hustles during this time for extra funds and these extra funds will definitely go extra miles!
This may be a risky time to start a small business (correction: starting a business is always RISKY), but this is also the best time to invest your time and effort – not necessarily just money.
I know this to ring true for me personally as I have decided that I am going to put my all into blogging + selling. At first, I have partnered with my best friend to start a thrift business (online vintage store keme) Supposedly, we were to import items from Korea/Japan but due to financial + logistics issues, we decided to postpone it.
Not to waste my efforts, I decided to clean out my closet: I set aside everything I wasn’t using but were still in great condition, so I can sell them. It is like hitting not just two, but three birds with one stone: 1.) I’ve decluttered our closet, 2.) earned for extra funds, and 3.) was able to learn and observe market trends for our future project.
As of today August 31, I was able to earn PHP 3,180 (for the whole month of August) from just cleaning my closet!
Lesson #3: ESSENTIALS vs COMFORT SPENDING
I’m pretty self-disciplined when it comes to spending and shopping. But during my more emotional, sad, or insecure moments, I would always find a way to rationalize a purchase of a cute summer dress (for my soon-travel-ootd hahaha), accessories (these will look cute with my new dress), books (well, knowledge is power), or a new bottle of my favorite skincare serum (always invest on your skin!)
I found myself justifying these purchases as “worth it,” or better yet, “I deserve this.”
BUT NOW, since my financial tank is dangerously teetering on the edge of uncertainty, I’m now tightening my belt and saving as much money as I can. I make sure my essential expenses are only as follows: rent, food, utilities, and bills – no more “may-titingnan-lang-ako-sa-WATSON”, monthly derma visits, mani/pedi, etc. (which back then, was part of my essentials) The goal now is to save-save-save.
This doesn’t mean I am not going to treat myself. I will just be thinking twice about my “comfort spending.” For example, my almost daily Food Panda delivery will now be eliminated (kasi hindi na free delivery ☹). Instead, more home-cooked meals. I get to prepare my own food na, plus it is cheap and waaay healthier.
Another classic example is walking instead of taking a tricycle going to work. Since the pandemic, I didn’t risk myself to take any public transportation and that saves me PHP 60/ day.
Lesson #4: Checking your Bank Account is Important
With all the scams happening around us, it is important to check (really!) your bank account. Again, based on experience, it is an advantage to have an online account that you can access 24/7 using your mobile phone. I can’t reiterate this enough. If you have access to your account 24/7, you can easily track unknown transactions and report them right away.
Lesson #5: Track Your Expenses
This is a no-brainer. Please have a monthly budget. Implement weekly / monthly expense check to make sure you don’t just blank spend. It’s easy to find comfort in that milk tea you buy whenever cravings attack but those add up!
Personally, I have this app @moneyloverapp. Here, I input every peso I spent by category (ie. 150 – food/beverage; 300 – laundry service; 450 – utilities, etc.) From this, I get to track my expenses and see where I can make some adjustments to reach my financial goal.
I feel like this pandemic has, in such a short time, completely shifted and transformed us in so many ways – especially in the financial aspect.
When I looked back at my past purchases — I can’t help but feel guilty. I think to myself, WHAT THE HELL was I trying to project? Do I really need these? Would these even matter 3-5 years from now?
I can’t believe I have this much makeup. HAHAHA!
Do I really need a pair of high waisted flared pants? Seriously?!
MY KEY TAKEAWAYS
- At least 20% of your income goes to your savings
INCOME – 20% Savings = EXPENSES (ipagkasya mo yan teh!)
- EMERGENCY FUND = Iba ito sa savings ha. Usually 6months salary mo ito.
If 20k/month x 6 = 120k EF ***
*** so just in case you lose your job, you can survive within 6months. Thus, must find a new job bago tuluyan maubos yung fund mo
- MUTUAL FUNDS / INSURANCE POLICIES
This is the best investment you can ever have. For as low as 1k a month for 10-30 years, you can have the best of both worlds – guaranteed insurance benefits and fund accumulation.
In short, para kang nag-iipon for your future while your money grows over time.
Side note: If you’re interested in getting yourself and family protected, or if or just want to grow your money, let me recommend some of the best financial advisors for you (SUNLIFE/ PRULIFE). They will provide you with the best plan that will suit your budget and lifestyle.
And that’s it!
Thank you for taking the time to read this entry and I hope you’ve been well, staying safe and staying sane. Share your thoughts on this month’s topic. Comment down below how COVID-19 changed your spending and saving habits.