Conserving Resources During a Pandemic

Financial experts preach about the need for an emergency fund. If your income stream suddenly ended because of lock-downs forced by the coronavirus pandemic—with no assurance of when it will restart—and your expenses continue, you’re probably dipping into that emergency fund now. The more robust, the better.

As a reminder, an emergency fund is three to six months’ living expenses tucked away in a liquid, low-risk asset like a savings account or money market fund. Not the stock market.

Unfortunately, nearly a third of Americans have no emergency fund and many more live paycheck to paycheck. When the paycheck abruptly stops, they’re in real trouble.

Unemployment, some debt forgiveness or deferment, and the $1200 relief check from the federal government will help many, but for others, it won’t be nearly enough.

Depending on how long this pandemic and resulting economic fallout last, there will be businesses that fail. Not every job will come back.

If you’ve lost your job or business and you don’t have an emergency fund, it’s too late to start one now. But there are a few things you can do to conserve resources and stay afloat:

·        Refrain from unnecessary purchases. With malls and many retail stores closed, this is easier than ever before. But if you’re addicted to online shopping, step away from the computer.

·        Don’t be a hoarder. Buy only the supplies you and your family will need for the next few weeks, and perhaps a little extra if you anticipate problems getting back to the store for reinforcements. You won’t tie up so much cash, and you’ll be a better citizen.

·        Conserve energy. With fewer places to go now, it’s easy to save money on gasoline for your vehicle. At home, turn off unnecessary lights and appliances, keep the temperature inside as close to the outside temperature as you can stand. (Luckily, it’s spring in most places, so we don’t have to spend a lot heating or cooling our homes right now.)

·        Conserve water. Turn off the faucet while you’re brushing your teeth or sudsing your hands for 20 seconds. In the shower, turn off the water while you shampoo or condition your hair. If you have some downtime at home, fix leaks and cracks.

·        Don’t waste food and paper products. You may have already figured out how to ration toilet paper!

·        Cook more from scratch. There are plenty of free online videos that teach you how to prepare easy, nutritious, and economical dishes for your family. Take advantage of seasonal fresh produce that is still on sale. Store leftovers promptly, label, and use.

·        Negotiate with creditors about waiving late fees, lowering interest rates, and/or relaxing repayment terms. They know everyone is hurting and most should be willing to work with you if you’re sincere about your obligations.

·        Defer discretionary expenditures. Some of these decisions may have already been made for you: large social events, vacation travel, visits to amusement parks, etc.

·        Leverage credit. Normally, I don’t advocate taking on more debt, except as a last resort. These are desperate times, and debt may be your last resort. Make sure it’s for a “must-have” rather than a “want-to-have.” And pledge to start paying it off as soon as you’re back on your feet.

Life may look bleak for the moment, but one day—hopefully sooner rather than later—this pandemic will be over and the economy will begin its recovery. As soon as you’re able, start an emergency fund, so you’ll be better prepared next time!

What are your thoughts about emergency funds? I’d love to hear your comments.
Sharon Marchisello is the author of Live Well, Grow Wealth.
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