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Financial lessons learned through the pandemic

Evergreen Credit Union financial counselor, Brenda Pollock, talks about some lessons learned through the pandemic.

PORTLAND, Maine — Brenda, the first thing you recommend is the EMERGENCY FUND.  

Emergency funds are more important than the “things you think you need.” Most financial experts recommend that you have enough money in an emergency fund to cover three to six months of expenses. For many individuals and families, that feels impossible. In fact, half of Americans don’t have enough money in their emergency savings to get through the ongoing COVID crisis. Today, more U.S. adults say they have no more emergency savings at all, while the majority of folks say they only have enough money to cover their bills for one to three weeks. Funding an emergency account will always be more important than almost every single thing you think you need. 

Certainly, with the malls being closed for a period of time, that must have helped people save more? 

No one wants to see these places go out of business. But if we’re talking about building wealthy habits, spending less time visiting stores, in person or online, will help you avoid impulse purchases on “things you think you need.” If you have to think about whether or not you need something, you probably don’t need it. Also, the grocery store curbside pickup services have really helped families to stick to a food budget plan.  

Having a budget is necessary but you also recommend re-evaluating annually? 

It seems we need to relearn over and over that managing household finances with a healthy savings protects us against unexpected emergencies. Knowing what one earns each month vs. what one spends each month, is essential. Second, ask for help when it comes to managing your personal finances. Re-evaluate where you are every year to ensure you are on track with your overall financial goals and ask for advice from people you trust or sit with a financial advisor who can guide you to better choices than you might make on your own.  

The pandemic also has those who were able to remain employed be thankful for their employment.  

Some people love their jobs; for others, their job is just a paycheck. But the widespread and painful job losses that have occurred in the hospitality, health care, travel, retail and restaurant industries during the COVID outbreak should remind us all to be thankful for being employed, a reliable paycheck, and to step up and do the best job we can. 

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I know we are discussing the importance of personal savings and budgeting, but this year also taught us the significance of charitable giving. 

For those who have been fortunate enough to remain employed, one positive impact is an increased desire to contribute to charitable causes. With the money that we would have spent on movie tickets or a family vacation, for some, those funds were donated to homeless shelters, food banks, and other organizations that are overwhelmed during this time. Americans gave to charities like never before amid the pandemic.  

And lastly, you say the pandemic also taught us the importance of investing in personal and career development. 

It’s always important to invest in yourself both personally and professionally. Everyone was faced with making a number of changes in the past year. Many lost their job or work in an industry hit hard by the pandemic, yet, at the same time, it has been a source of innovation and new business creation. New businesses rose by nearly 42% in the US in 2020. This pandemic taught us that having a second stream of income to help with expenses or, ideally, help build your emergency fund. So take a close look at your interests and skills and think about how you can put them to work for you.  It can be an additional source of income you control.