July 6, 2020
I Saved Money During Coronavirus – And Put My Savings To Better Use
A look into how three people changed their daily routine during COVID-19.
The coronavirus has done unforeseen damage to people – and affected many individuals and families financially. But for some people, there’s been a financial silver lining.
In this series, we’ll look at individuals and couples who are spending less, saving more, and seeking creative ways to bring in more income. We’ll break down their Silvur Retirement Score which shows at what age their money will last till if they continue to save at this rate on a monthly basis.
‘I Took on Freelance Work & Made My Own Lunches’
Occupation: Writer & Airbnb realtor
Location: Greer, SC
Monthly Savings Since March 2020:
Mortgage (ARM)+ utilities savings: $80/month
Fuel savings: $50/month
Dining out: $180/month
Total Estimated Monthly Savings = $310
What Sandy Says:
My husband and I are self-employed, so we worried that rental income from our Airbnb units would dry up in April and May. Thankfully, these worries didn’t materialize. Our vacation rental income remained nearly steady. However, we’re naturally thrifty and have learned other ways to save. We don’t pay for a gym: We both have Fitbits and I walk every morning and average about 13,000 steps.
But while our rentals dropped during April and May, we still had business and personal expenses — cable is about $180 each month because of our need to have service to our rental units. We spend $83 each month for a home security system, again because of our rentals. We prorate these expenses–as well as real estate taxes, garbage pick-up, and most utilities–at tax time, so that greatly reduces our tax liability.
Our mortgage is an ARM. Right now it is $465, and has been fluctuating a good bit, and dropped approximately $80 per month starting in April. That was an unexpected drop in a “fixed” expense. Other fixed expenses remained stable.
Since virtually all of our income is volatile, we started looking early for ways to save money during COVID-19. We made several changes, but the biggest included:
- Eating at home (without takeout). I got creative and would go to the grocery store and stuck to buying what was on sale and find a palatable way to use it. I cooked big quantities of food like stuffed shells, and would make three pans — one to eat now, and two to freeze and eat later. That way, when things got really busy, we weren’t tempted to order takeout.
- Driving less. I drove my car only once or twice a week for a couple of months. The downside here was that the battery went dead and had to be replaced — which ate up most of our fuel savings.
- Planting a garden. We always plant a few things, but this year I started earlier and planted extra things. We’re beginning to reap the fruits of that now. We’ve harvested snap peas, lettuce, spinach, and green beans.
- Becoming DoorDashers. I’m not sure we are the typical Dashers, but we both enjoyed the occasional 2-3 hour stint. I usually make $15 to $20 an hour. It gave us something to do and some extra income for our savings.
If Sandy continues to save $250 each month, this will improve her Retirement Score from 87.5 to 92.5. If Sandy adds on an additional $500 of part-time income for at least 10 years, her score will increase to 96.5.
Assumptions: $4,000 per month pre-COVID spending, one income at $65,000, retire at age 65, $250k in 401k, $100k in Roth, $250k home, and the mortgage paid off by retirement.
‘My family of four — including two adult children — saved $1,500 per month’
Occupation: Securities and investment advisor
Location: Washington, D.C.
Monthly savings since March 2020:
Dining out/takeout: $250/month
Car insurance: $25/month (COVID discount)
Dry cleaning: $75/month
Personal care (hair, nails, etc.): $300
Starbucks/coffee shops: $30
Total Estimated Monthly Savings = $1,465
What Michael Says:
Our monthly fixed costs–mortgage, utilities, insurance, and food are about $5,000. But we saved a ton of money — about $1,500 per month — in April and May. This doesn’t count the college room and board, which I budgeted for separately for our college-age child.
In March, I quickly saw the coronavirus pandemic as an opportunity where my family wouldn’t be out and about buying clothes and such, and where we could simplify our lives by doing things ourselves (housecleaning, lawn care, workouts, etc).
My grocery bill went up by maybe $150/month, but that’s about it.
My general advice would be to take stock of your finances and situation and slim down your obligations. For example, if you’re working at home, do you have more time to do some of the things you’d normally outsource, such as yard work? Can you eat lunch at home? Call your auto insurer and tell them how much you’ve cut down on mileage — and ask if they can lower your rate. This worked for our family!
If Michael continues to save $1,000 each month (⅔ of what he has been saving during COVID), this will improve his Retirement Score from 82.5 to 94.5+.
Assumptions: $7,000 per month pre-COVID spending, one income of $150,000, retirement at age 65, $500K in 401k, $250K home, and the mortgage paid off by retirement.
‘I Might Use Savings To Pay Off Our Mortgage’
Occupation: Editor/federal contractor (spouse is a manager for the Federal Government)
Monthly Savings Since March 2020:
Gas: $400/month savings
Tolls: $40 month
Dining out: $750/month
Starbucks/coffee shops: Saved $100/month
Personal care (hair, nails, etc): Saved $160/month
Other entertainment savings (e.g., concerts): $325/month
Travel savings: $750/month
Total Estimated Monthly Savings = $2,925
What Ellen Says:
I definitely didn’t plan to have thousands of dollars in extra cash in April, and I’m definitely grateful I did. I’ve bought $6,000 in new stocks since April, and put any leftover income into our savings (emergency and other). I plan to take some of my additional savings from quarantine to pay down our mortgage. I debated buying one new car, but my old one is fine for another year or two. My husband Tim’s car is new-ish and will be paid off in October, so we’ll take a payment break and pay extra towards the mortgage. We plan to retire at +/- 62 and want to do so with no house payment.
Some of the most noticeable changes are in travel — three trips we’d planned and paid for were canceled, so we saved $9,000. We have credits for two of them, but haven’t invested in any new travel plans. When amortized, that’s about $750 a month in savings. Our grocery bill has risen a bit — we spend about $150 more per month than usual, but other than that, all other costs have stayed the same. I’m bummed I can’t go to the gym, but have taken advantage of free online classes from my Zumba studio. I’ve been able to use a neighbor’s pool, so I don’t miss the indoor pool at the gym so much. I have not colored my hair myself, but I am considering it.
Let’s assume that Ellen will only maintain 50% of her savings post-COVID. If Ellen continues to save $1,500 each month, this will improve her Retirement Score from 86.5 to 99+
Assumptions: $8,500 per month pre-COVID spending, two incomes at $100,000 each, both will retire at age 65, $500K in 401k, $500K home, and mortgage paid off by retirement.
What You Can Do Today
Although COVID-19 may have impacted many in different ways, it did help many re-examine their spending and curb back their habits. Based on the three real-life experiences, see what you can do today to save more money and put it towards your retirement fund.
- Cut non-essential spending and try to do-it-yourself
- Negotiate with your lenders and utility companies
- Find exclusive online deals and compare prices—check out Silvur’s marketplace for exclusive rewards from our partners.
- Add part-time income and continue to build your emergency fund
Doing these simple actions today can reap the rewards of a better retirement fund for your future and improve your Retirement Score. To see how long your money will last based on your current expenses, get Silvur and calculate your Retirement Score. Silvur will provide you with a checklist on items that can improve your score and make your money last throughout retirement.