Building an Emergency Fund in an Emergency

Nitehawk Cinema, Prospect Park, Brooklyn

Welcome to the pandemic! The jobs are scarce, vaccines are not yet available, and people still refuse to wear masks in public.

I am extremely lucky that my office job was able to convert to working from home. I’m grateful to have a regular paycheck. I do not take that for granted. I know many people who were not as fortunate, so I write this post about saving money, keeping in mind that obviously this will not work for everyone who reads this.

When we were told that we should work from home in mid-March and we likely wouldn’t be back to the office until September (lol not anymore), I felt a lot of emotions: anxiety, stress, fear, self-doubt, and so much more. My fiance lost his job almost immediately in March because he was working in a restaurant. So I said to myself that I would prepare for the inevitable outcomes of this massive economic downturn.

  1. The $600/week unemployment stimulus wasn’t going to last forever (my fiance received this through the end of July).
  2. $1,200 is not enough to sustain one person for four months
  3. I could lose my job at any moment.

So with this in mind, I evaluated my current financials and built my bare bones budget. I had the suggested $1,000 emergency fund barrier in my personal savings account because when I started seriously paying down my credit card. I wanted a buffer in case something came up, so that it wouldn’t derail my entire pay down strategy. The biggest change to my budget since March was that I stopped paying $500 to my credit card payment, and instead started to pay the minimum. The rest of the money previously allocated to paying down the card is now in my savings account. This was the hardest change for me because this year was going to be the year I paid off my credit card for good! However, as the title suggests, it’s an emergency situation so all priorities are shifting.

I automated other savings. I opened a separate account at Ally specifically to save what I would have been paying in student loans. It will stop taking money out of my checking account when student loans are due again (as of this posting, payments resume in October according to my provider’s website, but the executive order from Trump suspends federal loan payment through the end of the year—I’ll be monitoring this closely!), and I’ll continue to save the payment no matter when it resumes. I have two other Ally savings accounts that I also continue to contribute to, including one for my cat.

We received our tax return around March/April and we put that into our joint savings account, we also put the bulk of our stimulus money into savings as well. The joint savings account is/was our account for wedding things, so the extra money would have ended up there anyway. If we end up getting another stimulus payment we’ll probably do the same thing. Combined, the tax return and the stimulus gave us the biggest boost in our savings.

We also had prior savings with our wedding in the aforementioned joint account, that if necessary, we can use toward emergencies. We had visited two venues in January and February, but we hadn’t made any deposits, which is really fortunate that we still have that money on hand.

Other small ways I have saved:

  • not having to pay a gym membership ($15/mo)
  • cancelling my Spotify premium account ($10/mo)
  • cancelling Acorns contributions (approx $25-35/mo)
  • lowering my contribution for my 401k, while still getting the employer match ($35/mo)
  • pausing the pre-tax transportation costs ($127/mo)
  • switching to doing the laundry ourselves at the laundromat instead of drop off service ($15ish/mo)
  • not traveling (airline credit) and taking pre-planned trips (savings on hotel and car rental)
  • not renewing my WordPress premium account ($8/mo)

So for these past few months I’ve saved approximately $875 each month into various accounts. Josh has also saved money from receiving unemployment benefits so that will be useful when those benefits disappear. (He declined to go back to work at the restaurant so he will no longer be eligible for unemployment benefits.)

We do try to bring some small joys into our home. We rent movies from YouTube or Amazon Prime, we order takeout at nearby restaurants (though the frequency of this is likely to change). I was still able to get Josh gifts for his birthday in June. We get bubble tea on our way back from walks. We have ordered clothes online, though I have been shopping with less frequency (need more lounge clothes!!). If we do get another stimulus, I’m also thinking maybe with a portion of it, we can upgrade our work from home set up to be more productive. It’s been 5 months and I only bought a laptop cooling pad.

And some things that haven’t changed in our budget: we order the food we want to eat. In fact, we made the decision to join Amazon Prime ($14/mo) so we could get access to grocery delivery (tipping extra!!) in our area with Whole Foods and Amazon Fresh (free shipping on groceries and other orders, and other non- grocery benefits as well). We are not depriving ourselves completely for the sake of saving money. Also, all our grocery and Amazon orders are paid through our joint credit card, which we pay in full each month, so we are still able to build up the rewards points. Saying this while completely acknowledging that we are in a privileged position to even consider eating beyond the bare minimum of what we can afford and that we have the option to get food delivered. There are a lot of families in NYC alone that rely on public assistance during this time and outside of the pandemic that have been affected dramatically by lack of access to food in schools and other facilities.

In five months these have been the most dramatic changes to how we spend and save. I do think it’s important to keep track of what you’re spending and see how the priorities might change month to month. Even for us, once we start dipping into the wedding/emergency fund, we’ll need to re-evaluate the budget again (like, can we save money by combining phone plans?). The other issue I keep thinking about is when will this emergency budget end? When I lose my job? When I go back to the office? I’m close to reaching 3-months of emergency savings for my bare bones monthly expenses, but I think that I likely won’t feel comfortable until we reach 6-months of emergency savings for both our expenses.

What has the pandemic been like for you? ♥

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