It's officially the holiday season and I can guarantee every single person is looking forward to the new year and not looking back. #Bye2020. Rather than shove overpriced gift guides down your throat (that I was never really great at anyway…) instead I'm going to do a recap of all the personal-finance related wisdom that died this year.
It's been a tough year for many financially, but honestly, I'm glad the COVID-19 pandemic is finally sending a handful of money ideologies to the grave. See? Silver linings do exist wherever you choose to look.
5 Money-Related Ideas that Died in 2020
The idea you can live without an emergency fund if you have a steady job
Ooh. This is the biggie. Because even those who have an emergency fund likely never imagined an entire year of a pandemic, or the recent surge in cases this fall that sent many states back into lockdown.
As a finance writer, it's been good to see the emphasis on saving rather than spending, even though I'm sad about the reason behind it.
Even those with safe jobs where they're able to work from home can't ignore the economic devastation around them. We're all saving now, because even if you have a steady job, or a great paying one, literally anything can happen at any moment. Unprecedented things can happen. Industries you previously thought would always be safe are now in danger (whoever thought people would stop eating at restaurants?).
An emergency fund is the difference between simply weathering hard times or stressing all the way through them. Previous financial advice advocated for at least $1,000 if you are actively paying off debt and then 6-9 months of expenses. (Even I advocated for this in this piece, and this piece.)
But I was wrong, and this is outdated advice. Now, many experts recommend between 9-12 months of expenses in an emergency fund.
You know what I haven't seen in 9 months? Memes about enhancing productivity, or waking up at 4 a.m. or “rising and grinding.” And me? I was always advocating for readers to get a side hustle, especially for those looking to pay off debt or save up a nest egg very quickly.
But one thing I've learned during the pandemic (and being on maternity leave the entire time) Is that it's important to rest.
And that we're all really just trying to survive and get through the day.
But even when we're out of survival mode, I think we should leave out the return to the “hustle and bustle” and instead make room for rest. For quiet time. For being at home. For savoring things and making them special.
Let's not put “hustling” up on a pedestal the way we did pre-COVID. When we're all out of this, let's prioritize health and happiness and enjoying the ability to freely socialize instead.
The idea you can go out all the time AND still save money
I can't tell you how many people have told me, “Lauren, I saved thousands of dollars in quarantine.” At least five of my friends have revealed to me their ability to save tens of thousands of dollars by largely remaining at home. Imagine that!
When I speak with them, they're truly amazed at their own vast sums, as if money just appeared out of thin air.
“Staying at home” isn't a new concept to anyone who previously worked to pay off debt or save up for a large goal, like homeownership. It's just with COVID – many people began to experience the magic of saving money by staying (and eating/drinking) at home.
Spending money on things you don't need/value
Even after the pandemic is over, I hope the consumer sentiment of spending only on necessities and things you value remains.
Because when things “return to normal,” you still won't need more clothes, more makeup, more household items, a new(er) car, the latest gaming console, or more of anything that doesn't actually make you happier or healthier.
I love that the pandemic has taught us how much we really have to be grateful and how little we actually need to be happy.
The economic viability of having a corporate job
It's been tough across the board: for gig workers, freelancers, and those with 9-5 jobs. We're all feeling the hurt.
But I do think if you own your own business, there is more room to “recession-proof” your ideas and diversify your income streams than if you work for someone else. Rather than wait for someone to pivot with the changing times, as a business owner, you get to decide how to operate.
I'm not dumping on corporate jobs. I'm just saying, even in a crisis they won't always keep you safe and fed.
We're all glad one of the toughest years on record is coming to a close. But if you can, spare a few minutes to think of what you're glad the pandemic helped you to accomplish. Even if it is as simple as realizing how wonderfully strong and resilient you are.