Over a year ago, I quit my steady well-paying law firm job. Despite not having a full-time job for almost 14 months, I haven’t worried about money. Here’s how I afforded my year off from legal work.
My friends still talk about the buffet to this day – raw oysters, fresh shrimp, smoked salmon, caviar, fresh carved prime rib. And all sorts of other foods that were delicious (and expensive). Beautiful ambiance. It was cheaper than what we thought they could charge, but it wasn’t so cheap that we suspected something.
It was great but it was also all a bit too much. It was fun mixed with guilt, and the guilt subtracted from the fun.
Sometimes excess is actually an obstacle to being happy, and it’s very possible to have joy even on a bare bones budget.
The 50-20-30 budget is one of the most popular budgets according to personal finance “experts.” In it, you spend 50% on needs, 20% on savings/debt reduction and 30% on “wants.” This is a terrible plan for almost every income and lifestyle and below I will explain why. The 50-30-20 budget is stupid and I will show you a better way.
How to Waste Money on a Budget
We Are Not Saving Enough
The savings rate for middle-class Americans is low. The rate jumped to 7.6% in 2019, but that’s still far below what it needs to be to put Americans on solid footing. Now that we are in unprecedented times and unemployment rates are up, savings will likely fall back. It seems easy to just give up. After all, even if you save 7.6% of your salary, it will take 13 years to save a year of expenses for an emergency fund. Thirteen years is a long time! But even if the savings are small, there are many benefits of saving even small amounts.
My inbox’s tone has been very gentle lately. The newsletters tell me, it’s a big scary world and I shouldn’t feel bad staying in my fetal position and only resurfacing when the world is better. Drinking more wine, spending time alone, and vegging out are encouraged, perhaps even celebrated.
Most of my newsletters are directed at women. This is not a coincidence. We teach women to retreat; we men to take charge.
I was chatting with someone about who’d you most like to be quarantined with and we were debating the perks of being quarantined with a billionaire. He figured that any billionaire would have a fantastic personal chef, but I wasn’t so sure. Billionaires tend to have weird eating habits. Extra money means more options – it might mean you can try things you hadn’t had before. But money doesn’t change what you like.
Setting a budget may is tough already but following a budget requires a never-ending slew of decisions and judgments. Budgets are cruel dictators, mean CEOs. They don’t care about us, the little guys, the minions that are carrying out their wishes. But even though we may all complain about how arbitrary and unhelpful our bosses are (I know I do), we may not all question our budgets. Even the best laid plans need to be evaluated and revised as conditions change. Budgets are no different and this is the perfect time to determine whether your budget is ailing from one of the following three mistakes that mess up budgets for lawyers.
Good Stories During the Coronavirus
There is no shortage of bad things to discuss right now. It’s easy to lambast governments for their actions or inactions or to be indignant at people for not socially distancing properly or for panic buying or other acts of selfishness. We were already in an outrage cycle before the world fell apart.
If I move away from the internet, I see so much good and so much to be grateful for. I could find good stories even during the coronavirus lockdown. If this pandemic were happening pre-Zoom and Google Hangouts, pre-Internet, pre-Tiger King, it would be way worse. I’m grateful that this is all happening as the weather is getting warmer so people have the option to go outside and might even get more sunshine than normal. I’m excited for my friends who are new parents, who get to spend more time with their newborns while on lockdown. Really, it could have been much worse.
It’s not helpful to scold anyone for not saving for the present moment. And it’s a lot of people. 50% of Americans don’t have the emergency savings to live through the Covid-19 pandemic. Maybe you’ve just started your job or just started to get your financial life under control. Or maybe your financial situation was never in control. Whatever your situation, if you find yourself in an emergency situation without an emergency fund, here’s how to handle it.
There are so many financial tasks that we “know” we should do, but who has the time to even remember them, let alone do them. But now that we are all in social distancing, do we have a lot of excuses?
I’ve compiled a list of 50 quick and simple financial tasks you can complete in quarantine to get you jumpstarted on your money goals. These aren’t all clearly “financial” but every part of your life impacts your finances – your health, your relationships, etc. I wouldn’t do them all in a day, but any one of them is feasible in a day. These are all beginner tasks but stay tuned for another post with more advanced tips.