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- To get my income back to pre-COVID levels, I've kept in touch with previous clients who are finally re-opening, and I've also started branching into new fields.
- My first priority is to replenish my emergency savings fund, which I had to dip into during the pandemic.
- After that, I want to get my savings rate back up to 50% so that I can put additional money toward my investment accounts and start saving for a tiny home.
- As I secure new work, I'm keeping my spending levels low and setting up extra income to be direct-deposited into my savings.
- See Business Insider's picks for the best high-yield savings account »
In mid-March, COVID-19 was declared a pandemic, and by the end of March, I'd already lost about half of my income. I'm a freelance writer covering finance and travel, and the travel industry all but disappeared.
As it picks back up, and my income starts to go back up, I've put in place these three priorities to make sure that my finances recover.
1. Increase my income
I made sure to stay in touch with the clients that had put projects on hold and reach out to them once each month to see if they needed anything — a couple have finally gotten back to me. I have enough work for this month to nearly triple what I made in March when the pandemic first hit, and because I maintained my relationships with previous employers and clients, that work came to me.
I don't want to rely on any one industry for a significant portion of my income — especially now that the economy is in such a precarious position. So I'm also planting seeds for new work in new fields. When deciding how to branch out with my work, I looked at my own work experience and the industries that are still doing well and tried to find areas where the two intersect.
Examples of industries that are still thriving include delivery services, digital entertainment, cleaning services, meal prep services, healthcare, communication software, e-learning, and at-home fitness companies. I have a little experience doing food and music writing and used to work for a university, so I can leverage that to plug into some of these industries and diversify my income.
2. Replenish my emergency fund
I've had to dip into my emergency fund several times since the pandemic started, and it's gone from $20,000 to $15,000. I'm lucky that I didn't have to drain it and even luckier that I had it in the first place — knowing that, my first priority as my income increases is to replenish my emergency fund.
I'll be keeping my spending where it is and funneling all new income into my high-yield savings account with Ally Bank until my emergency fund is back to $20,000. To speed this process up, I automated the saving process.
When my former client reached out with new work, I set up their payments to be direct-deposited into my Ally Bank savings account. Thanks to the work that recently came in after travel picked back up, and my funneling all of that new income into my savings account, I should have my emergency fund refilled by September.
This new source of income is going straight into my emergency fund, and because I keep that fund in a separate savings account with Ally rather than the savings account that's connected to my checking, I can't access this money by simply swiping my debit card. While it's still pretty easy to get that money if I need it — a transfer from Ally to my checking account takes around two business days — the barrier of having to transfer funds between banks is enough to keep me from dipping into it for things that aren't emergencies.
3. Boost my savings rate
I made some ambitious savings goals last year and then lost steam as the pandemic wore on. I'd gotten my savings rate up to 50% last year by drastically cutting costs and taking on new clients, but after the pandemic hit, that rate went down to 20%. I'm determined to get it back up.
Some of the savings goals I made, like saving for a bucket list trip through South America, are no longer relevant to my life. Other goals, like investing aggressively to make up for not saving for retirement in my 20s, are even more pertinent. I've also developed new savings goals amidst the pandemic. I'm now interested in owning a tiny home, Airstream, or campervan that would offer a little more stability and security without sacrificing my mobility.
To get my savings rate back up to 50% so that I can achieve these goals, I plan to keep my spending at its COVID-19 lows and set up payments from any new work I get to be direct-deposited into my savings.
I'll keep my spending down by not re-adding spending categories I cut out during the pandemic — such as travel, salons, and dining out — back into my budget at least through the rest of the year. This will help keep both my savings and my health in good shape.
This year has been a financial and emotional roller coaster, but I'm finally ready to create and stick to new money goals.
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