There isn’t anyone who hasn’t reviewed and re-assessed their finances in one way or another since the Covid-19 pandemic hit in March. Like many others, when the pandemic hit in Toronto I had no idea what to make of it. Would I only be working at home for a few weeks? Would I lose my job entirely? At what point would we return to normal?
For the first month of quarantine, bored and stuck at home, I shopped online. Excessively. New clothes for summer (because you know, the virus would be over by then), expensive skincare products, the works. And in April, probably as a result of both Covid-related anxiety as well as seeing the amount I paid off on my credit card, it really hit me how loose I’d been with my finances. I had gotten to a point in my career where I was making more money than I needed and rather than thoughtfully plan out where that money was going, I was spending it. Here are some of the biggest changes I made.
I built a zero-based budget
The first thing I did to get a deeper sense of where everything was going was build a big, beautiful budget in Excel and download the Mint app to track my transactions by category. I knew all of my fixed costs (mortgage and car insurance) were set up as automatic and 10% of my pay was automatically deposited into a TFSA each month. I knew I spent too much money eating out, and I knew that my discretionary spending was probably a little high.
When all was said and done, I went from saving 10% of my paycheque each month to saving 61% just by cutting down my variable costs and also really taking a look at what was truly fixed vs variable in my budget.
I eat at home
It was no surprise that a ton of my money was going to takeout and dining out rather than groceries, and particularly when you’re busy at work and commute, it’s easy to fall into bad habits. Grabbing a coffee on your way to work, buying lunch for $10-15, getting home too late to cook so opting for delivery.
I slowly started to meal plan each week and put together much more disciplined grocery lists which meant less waste, my grocery bill was cut in half, and there was no scrounging around my kitchen trying to figure out what to eat. We still do takeout about twice a week but when we do, we opt for cheaper spots. I also looked at where we were shopping – did we really need to shop at the higher end grocery stores when the prices were significantly higher?
Since this shift, I’ve found myself not only enjoying cooking but also excited that I can plan healthier and more vegetarian meals. I also get weirdly excited seeing an empty fridge at the end of the week knowing that we don’t have to throw out any bad produce or excess food.
I curbed discretionary spending
Prior to my Covid online shopping bonanza I thought I was doing relatively well in this category, and truthfully it wasn’t terrible. I’ve never been the person who has to have the latest and greatest and I definitely don’t have a penchant for anything designer, cars, technology or other expensive things. But I was still spending a few hundred dollars a month on STUFF. I’d see something on Amazon and order it. I’d go into a store for cleanser and come out having spent $50. I started with the easy ones and cut out things I didn’t use frequently, like Disney+ and Amazon add-ons. And for everything I thought about buying, I also started to ask myself: do you actually need this? (spoiler, it’s no 95% of the time).
Living below my means was the key to being able to increase my savings significantly, and after a few months it started to become fun. Once I started to see the impact, I’d find new ways of challenging myself to save money and be even more frugal.
I started investing
As I started to see the impact on my savings, I got more and more interested in learning about investing. I had always participated in my employer options, but I had never opted to do anything outside of that.
I started doing research and fell down the rabbit hole reading, learning and watching videos and it became clear to me that to get to the number I want in retirement, even with the most consistent saving practices, I would have to invest.
I’m no expert and would never claim to be so I started with a Wealthsimple TFSA, investing into a high growth portfolio made up of index funds and a low percentage of bonds. Over the last few months there have been ups and downs but overall, I’ve seen about a 5% return. As I learn more, I’m sure I’ll expand into different forms of investment but for now, keeping it simple!
I upped my donations
2020 has been an eye-opening year. The pandemic lifted the veil on inequality for women and BIPOC while exacerbating existing issues globally and it’s never been more clear that there are so many people and organizations that need help.
So, I increased my monthly donations to two organizations and throughout the year have prioritized and made room for charitable giving. While it’s a personal decision and totally based on what is affordable for you, I really believe that money should be shared and that even a small amount makes a difference. If you’ve been thinking about supporting a cause but aren’t sure which organization to support, do some research. Look for charities that are accountable, transparent and financially healthy, because this means the organization is more effective on their charitable mission.
I looked into different ways to diversify my income
Finding multiple streams of income has really been a priority for me this year, so that if anything happened with my job, I would have more money and something else to fall back on. This year I took on a part-time job for 6 weeks to help beef up my savings and I’ve been building a portfolio of freelance writing to be a contributor in spaces that I know well – mainly HR. I’ve frequently held multiple jobs; when I got my first corporate recruiting job out of school I opted to also work part-time as a phone sales rep for almost a year on top of my 9-5. For most of 2018 I had a creative side hustle, and during university there was a period where I worked 3 jobs – a phone sales representative, a DQ employee, and an Avon sales rep (I know). Aside from a side hustle, my partner and I have also been searching for an investment property that will eventually become a passive income source for us.
I became a huge personal finance nerd
This was unexpected but if it had not been for the pandemic, I don’t know that I would have found this passion so quickly. I have eaten up every piece of information and enjoyed learning from financial experts, following financial blogs and millennial finance accounts, better understanding the stock market and just overall learning new ways to achieve financial independence.
So while Covid has been an extremely strange period to navigate, it has positively changed the way that I think about money. And if and when things do resume and return to normal, I know that I won’t be able to slip back into my former ways.