How The Pandemic Became My Personal Finance Wake Up Call

Photo by Michael Longmire on Unsplash

I was never really prepared for something like this. A pandemic or any other tragedy of such scale. Unfortunately it hits me and I’ll never the same. That for me has been the biggest lesson from this pandemic.

I’ve been so occupied with living my ‘normal’ life that I rarely ever consider contingency plans. Especially with the consumerism I’ve been driven by. I’ve always weighed present possession more important over future contingencies.

I’ll be clear about one thing: It’s not like I didn’t know that I need to be prepared with X amount of money for ‘a god forbid’ situation. I fully own up to my own indiscretions which have led me to this place. I also won’t go so far as to blame consumerism. We all live in the same consumerist era and some still fare well by making smarter choices.

I actively avoid personal finance because it is both an uncomfortable and an overwhelming issue for me. I choose to avoid conversations where my money went, simply because I don’t know where it did. I choose to ignore it because it feels suffocating, restrictive and burdened by my past choices, neither of which I enjoy.

However, after a recent announcement at work regarding a pay cut, I realised it really was time consider the repercussions of avoiding this because ultimately, I’ll be the one to suffer if I continue managing my money this way. While I’ve been fortunate to stay employed right now with a decent amount of money still coming my way, this pandemic and it’s domino effects have been the best personal finance wake up call I could’ve asked for.

Over the last few weeks I’ve been reading up on this topic and watching some YouTube videos, and while I’m not going to pretend to be a guru on all of this, I do have some takeaways that I’m definitely going to carry beyond the pandemic.

Lesson 1: Importance of an Emergency Fund

This is my biggest takeaway! I know this isn’t rocket science, but just to give you a perspective: after having worked for three years in reasonably well paying jobs, my emergency fund sits comfortably at 0.

When I first started working, my roommate as a rule would stash away 10% of her income each month and absolutely never touch it, no matter what. I, on the other hand, would spend without a care and live paycheck to paycheck. I moved job to job, raising my salary but never really saving.

The reason my eyes have opened to this uncertainty of pay stability is the fact that recently a pay cut was announced at work for me. I don’t know when I’m going to get full pay again, whether it’ll be cut further or will things improve. I live with my parents and my father works. So while he will support and tide over the family through this, I’d have definitely liked to make a contribution to it too.

It awakened a very real possibility in me: Had I been left on my own in a situation of zero or low pay, I probably would not have survived without borrowing from my parents. That’s something which opens my eyes to my financial dependence.

Making the emergency fund is my first priority during this pandemic. Courtesy the fact that right now expenses are severely limited for me, there is a lot of scope to stash away money to an emergency fund.

Lesson 2: The futility of my purchases

It’s true when they say that if X amount of money isn’t enough for you, X plus 40% isn’t going to make things better. The more I’ve earned, the more I’ve burned. Now with all the stuff lying around me, I really see the impracticality of it all.

In the past, everytime I’ve tried to exercise self control when buying a new bracelet, I’ve gone as far as to rationalise it as an ‘investment’. ‘ It makes me look pretty when I’m outside or at work’.This statement was my return on investment, apparently. Now, I’m not going to be using a lot of this stuff until all this ends. There is virtually no return on investment. And that’s a perspective I sorely needed.

Living below my means, is a lifestyle choice that if embraced, could do me a world of good. I know I’m not suddenly going to go from 100 to 0 on this, but the futility of my impulse purchases now is clearer to me now, and after all this ends, I know I will make a conscious effort to remember this every time I enter the mall.

Lesson 3: I need a budget

I am slightly ashamed to say this but I have consumer debt and it’s massive. And not just that, I’ve managed to relapse into a bigger debt pile after having paid off the first one, in less than six month after repayment. I currently, have consumer debt equalling to roughly three months of pay. This includes credit cards and borrowing from friends to pay off the previous pile. So after a struggle to pay off the old debt, I came back to square one. Except now it’s square 1.5.

I also know that complete abstinence while helpful isn’t sustainable because the day the debt was paid out for the first time, I went to purge again! Now, if you’re reading this and you’ve recently paid of massive debt, learn from my mistake.

Make a budget! Track your spending! It’s imperative or else you will constantly fall into the Spending Trap. More often than not, that leads to Debt Junction!

I realise why this happens to me. It’s because I see the bank balance at the start of the month and think “Oh I can afford this!” And by the 20th of every month I’m in a bare minimum kind of situation with no past or new savings and no way out except credit cards.

An excellent read for why and how to budget, is the book You Need A Budget by Jesse Mecham. It teaches the reader to budget but in a manner that suits their life the best. This book is also what brings me to the next lesson, I’ve learnt.

Lesson 4: Spending for my dreams

My true goals in life are to travel, write, start my own coaching business and own a house, in no particular order. Reading about personal finance has taught me that budgeting does not mean scrimping but rather spending money on what you truly need and want from life.

When I first read books like those of Mecham’s I never understood what this meant. ‘Of course, I truly need that dress! What else am I to wear to work?’. Sound familiar? That used to be my thought process too.

But the shutting down of everything in sight and consequently the sudden sheer redundancy of my material possessions, was a real eye opener. That dress along with 25 other sibilings, lies dead in the cupboard (All hail the PJs!).

What does remain alive, are the photos, videos and memories of my first solo trip that I took in end January just before all of this hit the roof. (I made a scrapbook of those memories too, which was another level of fun). That feeling still drives me today to do better and that was the first point of realisation. Several others over the course of this month, truly opened my eyes to ‘what I really wanted’ from my money. This in turn has given me renewed energy for budgeting, because the thought of being able to have enough money to quit my job and start my coaching business someday, is all the ‘purchase high’ I need right now.

So now, my budget has started to include a health mix of spending, investment and saving for goals.

Lesson 5: I have to start somewhere

I’ve spent a long time, not saving or curbing my expenses simply because I felt like it was ‘too late’. I’ve already been working for three years, there’s no way I can catch up to my peers now. I have avoided the topic of saving, because I could only bring myself to save small chunks (as low as 5–10% of my income). Nothing in comparison to some of my friend, who with similar incomes, go on to save as much as 45–50% of their incomes.

Here’s the thing I often forget though, I don’t need to catch up to them. I need to save/spend in view of my needs and wants.

It’s only now when things are starting to become dire, am I able to let go of my unnecessary and imaginary yardsticks. I might be a few years behind but unless I don’t start, I won’t catch up for my needs!

I know this pandemic is hardly the way to learn such lessons and it’s sheer privilege to call it a ‘wake up’ call rather than a harsh reality. But for those, who have the privilege, there’s no time like the present to get your finances in order.

I am now acutely aware of the fact that I don’t need annual upgrades to my phone. What I do need is enough money to tide me over if this happens, because maybe next time it could be worse than this.




I write about self improvement, mindset and productivity! I also write poetry. You can follow me on Instagram @poetrybyvanshika

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Vanshika Sharma

Vanshika Sharma

I write about self improvement, mindset and productivity! I also write poetry. You can follow me on Instagram @poetrybyvanshika

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