The Corona crisis has upended our lives, suddenly a trip to the grocery store is the biggest outing of my week. Everyone’s facebook and instagram timelines are more like #latergram and no projections of great lives. Instead its all about survival, and waiting it out. The crisis has also led us to evaluating our money habits and look at what really matters.
If you have not looked into your money habits, and have some time at hand, it is a good time to try it. I will suggest a few things at the end of this post, jump through if you are in a rush.
Now, lets look at our money habits:
Lesson #1 : We ate out more than we realized, and it was affecting my health.
We used to believe that we only ate out 3-4 times each month, when we go out as a family to a restaurant. Its our escape and sometimes it was also a way to close a busy exhausting day. Now, even when we are often working late in the evening and struggle with childcare during the day, we make it a point to cook. The only luxury has been frozen pizza.
We had simply failed to count the coffees, croissants, ready to eat salads and on the fly noodle trips which are all less than 30 metres from our apartment. None of these are very expensive luxuries but they added up both to the bills (>150 Euros a month) and to my waistline. I lost a couple of pounds in the first weeks of the isolation.
Will we never eat out? Of course we will, its still our escape, but this financial habit needs more careful consideration.
Lesson #2 :
Many Most of our purchases are non essential and not critical
Last weekend we watched The Minimalists documentary, while the lifestyle is too extreme but it has a lot of value. Our realization was that we are not as frugal as we thought ourselves to be, we have accumulated hundereds of tiny objects instead and struggle with clutter.
The result has been a clean up exercise, I have reduced my wardrobe by 30% of all clothes, and reduced the books I owned. While this new excitement is great, I am not sure if I can sustain this.
Lesson #3 : Great experiences have little to do with the price
We like to travel, 2-3 trips an year has been a normal for us, and a few day trips during summers is refreshing. We have always been careful in budgeting and booking except a few times like last year. With no option to travel on Easter, cancellation of our parents trip to Germany and no bookings in place for summers, we are home and trying to make the best of it.
A walk to the river on a sunny weekend and the ability to experience spring without the noise of cars swooshing by has been refreshing. We didn’t need to spend any money for that. I have also learnt to make peace with no trips, and we are doing fine (for now). Of course, I fully realize a walk down the riverside cannot replace a holiday, but the ability to adapt is the biggest strength of being human.
Lesson #4 : Happiness exists in tiny things each day and not in big goals.
We knew that consumption is not sustainable, but the real realization only came in during this isolation.
I realize that blowing bubbles in my little balcony with my toddler is a source of happiness, or 20 Euros worth of sand is enough to give him a feel of a playground right in that balcony.
I also learnt that things which I used to think what a family man should provide like cars or house with a garden do not matter to my family. In the long run, those things might be useful, may even be a measure of success to some, but are NOT a measure of happiness. This money habit of comparing myself with others, has to stop.
Lesson #5 : Fear is a great motivator to save and invest in your future
As Coronavirus has hit industries, some of my customers are struggling too. At the moment, my job seems safe, but it can all change. The result of this is two specific things I am now actively focusing on:
- Investing in myself: I am actively learning new skills, so make myself available for more projects and also secure myself for a a shaky future. I would like to prepare for what is to come after coronavirus.
- Counting our blessings and tightening our belts: Over the years, many people in our life questioned about why we moved to Germany. The answer rings true today, if things go awry, the German social system and the health care will be around for a while to allow us to recover. To top this, we are holding more cash than before, because these are uncertain times.
How can you evaluate your own money habits?
I have a simple list of questions you can ask yourself. I must say, your answers or goals can be very different from mine and that is fine. If money inspires you and a Tesla is your dream, so be it.
- What are the top 3 life goals for you? (hint: Money, Relationships, Career or Health).
- Has the isolation changed for you in terms of spending? How?
- What is the one thing financially, which you are not able to do, and it still feels fine?
- What is the one thing in terms of spending, which you are not able to do but would like to continue?
- How prepared are you if there is a loss of hours or job loss suddenly?