How COVID-19 Freed Up Some of Our Cash
Written by Maria Hyde
Thursday, July 16th, 2020
With the changes to our lifestyle brought on by COVID-19 and social distancing restrictions, my husband and I made it a point to re-evaluate our finances and ask ourselves:
"How can we make the most of our situation?"
Some of our expenses were significantly reduced, since we were no longer commuting 3 hours a day for work or incurring monthly daycare fees. Plus, with no vacation travel in sight, we wanted to shift the purpose of some of those savings to something that could still be meaningful and help improve our current situation.
3 Ways We Reallocated our Budget to Make the Most of our Money
1) We Used Some of our Vacation and Entertainment Savings for Home Improvements
Earlier in the year, we had purchased tickets for concerts that were eventually cancelled. With the refund from those tickets, additional savings we accumulated from not being able to go out, plus some of our vacation fund, we were able to make a few updates around our home.
We prioritized based on what we've been wanting to update for a while (paint our staircase) and what could help improve our work-from-home situation (buying chairs and accessories to make our work spaces more comfortable). We also made some updates to our home exterior and backyard to have it ready for the summer season.
Putting our money towards improving our home made sense to us since it was where we were spending most of our time. The little projects were also a good way for us to stay busy while we were stuck at home.
2) The Money We Saved on Daycare Fees Went Primarily Towards our Children's RESPs
Our son was only enrolled in daycare part-time since we already had childcare set up at home for him and our younger daughter. We were fortunate that we didn't have to scramble to find childcare like many other parents did when daycares closed down here in Ontario, in March.
My husband and I both agreed that it'd be best to use most of the savings from daycare fees to top up our children's RESPs. We set aside a bit of the savings to also buy them educational activities and toys that could keep them occupied at home.
3) We Increased Our Debt Repayments Using the Money We Would've Spent on Gas
My husband and I would typically commute 3 hours a day for work, which added up to a lot of money spent on gas. And even beyond work, we'd often commute to see our family and friends who were a half an hour to more than an hour away from where we live. While the downside to social distancing measures was that it kept us away from family, friends and colleagues—not having to commute everywhere really helped us save money on gas.
We used those savings to increase the payments on our line of credit, which lowered the amount of interest we were paying.
Make the Most of Your Situation
The way we shifted our finances during this time made the most sense for us. Everyone's situation will be different. Whenever there are changes to your finances, it's always a good idea to be thoughtful about how you manage your money so that you're making the most of your situation.
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