What Have I Learned During the COVID-19 Pandemic?

Tommy

Just a Millennial living in the real world...

I think we can all agree that COVID-19 and the year 2020 sucks… We just lost the great Alex Trebek last week as he lost his battle with Stage 4 Pancreatic Cancer. On a positive note, today is Veteran’s Day. Thank you so much to all of the men and women who have served in the US military! Thank you so much for protecting our country and our freedom!

I know I haven’t posted in a while as life got in the way, but I wanted to take some time to discuss how COVID-19 has affected my spending and what I have learned during the pandemic. I was lucky enough to travel to Jackson, WY, Finland, Iceland, and London, UK earlier this year back in January/February. When I first heard about the pandemic, I was like it’s not going to reach the U.S. And then everything hit the fan back in March/April when Chicago locked down. I remember my last day in the office at work until I returned in June and I went grocery shopping and all of the damn toilet paper was gone… I was like what the heck as all of the bread, produce, and cleaning supplies were gone. Also, just to really grind my gears, I waited in the checkout line for about 30 minutes. Yeah fun times back then…

Here’s what I learned about my money during the COVID-19 pandemic. Take it for what it’s worth.

1: I spend way too much money at the bars...

During the pandemic, I have been spending more time with friends and small groups rather than going to the bars. I found out that it’s way cheaper to buy your own liquor from a store and go hang out with your friends at someone’s place instead of going to a bar. Duh!!! As I have gotten older, the hangovers have gotten about 100 times worse as I always feel like I got hit by a freight train the day after so I have been going out to the bars less before the pandemic so I was kind of used to it before the pandemic hit. But that’s pretty typical as you age and start to settle down. Like I said above, I have been hanging out with friends in groups of 10 people or less pretty much this entire year. I’m an introvert so I am pretty much digging the smaller crowds anyways.

To fully explain this how I am saving money, let’s crunch some numbers! Remember that this is hypothetically speaking and the numbers can vary. As you probably know I am a huge bourbon fan and I drink it quite a bit. The MSRP of a 750 mL bottle of Buffalo Trace Bourbon purchased at a liquor store is about $25-$30. You go to a bar in Chicago and the price for a 2oz pour of Buffalo Trace is about $9/pour on average.

Since we live in the US, we use the imperial scale instead of the metric scale. Ounces (Oz) are imperial and milliliters (mL) is metric. So we have to convert mL to Oz. A 750 mL bottle is about 25.36oz. Let’s round down to 25oz for simplicity. A 750 mL bottle of Buffalo Trace has about 12.5 two-ounce pours in the bottle. So 12.5 two-ounce pours at $9/pour would be $112.50 with those assumptions. Wait a second, didn’t I say above that you can find a bottle of Buffalo Trace for $25-$30 and that is the MSRP? Yes, that is correct! The point is that bars and restaurants mark-up prices of goods and that is how they make money in the USA. That’s capitalism baby! Bars and restaurants are more expensive than staying at home and buying products. But at bars and restaurants, you are paying for an experience and that is why they are more expensive. During the pandemic, I learned how much money I was spending at bars.

Unfortunately with state/local restrictions, I have been going to bars less as going to one is one of the easiest ways to catch COVID-19. But I have still been trying to support my favorites bars and encourage you to do the same!

2: Stop spending money on daily coffee...

I used to be able to get Folgers coffee at work as it was kind of an unofficial employee benefit, but the coffee machine was shut down as a COVID-19 precaution. Fine, I understand and it makes sense. But where will I go to get my daily coffee as I am a caffeine addict and I need my caffeine to function properly? During the pandemic, I have been buying daily coffee at Dunkin and Einstein’s since I have been going back into the office in June. If you’re friends with me then you probably know that I think Starsuck’s coffee is overpriced and their drip coffee (black) is overly burnt so I highly dislike Starbucks. A XL (20oz) Original Roast black coffee from Dunkin costs about $3.20/pop in Chicago.

I became a Dunkin fan ever since I was a little kid in Kindergarten. I lived in Jacksonville, FL and my Mom would sometimes take me to Dunkin Donuts after school and I always got their strawberry frosted donuts as an after school treat. I still very much eat their strawberry frosted donuts occasionally as they are yummy!

So just the other day, I literally bought (invested into) a Keurig Machine so I would stop buying coffee at $3.20/day. Let’s crunch the numbers again! Remember this is hypothetically speaking.

Let’s assume you work 261 days/year. 261 day represents weekdays within a year (not a leap year) and assuming you have no time off. If you receive no vacation days and no holidays off, then I would highly recommend finding a new job, but you do you. Ok, let’s also assume you order from Dunkin everyday and it’s $3.20/pop. $3.20/coffee times 261 days = $835.20…

Ok let’s see how much it is to drink coffee at home using a Keurig machine. The Keurig I purchased was $136 after taxes. It’s usually $160 before taxes, but it’s currently 20% off FYI! The K-Pods at my local grocery store cost about $8 for 12 pods. Next comes some tricky math as we actually have to figure out the price per pod before we can annualize the calculation. This is $8/12 or $0.6667/pod. Multiply $0.6667/pod times 261 days and that is about $174/year. Water is included in my rent so I won’t calculate that and just say it costs $0 (even though it’s not free) for simplicity. A high-quality tumbler costs about $30 and if you take good care of it and not lose it, then maybe it will last the entire year! 😉 So let’s assume you do take care of your belongings and not lose them so you only spend $30 for the year. So if you add $136 + $174 + $0 + $30 then the total costs of drinking coffee daily by investing into a Keurig is a whopping $340!

So drinking coffee at Dunkin every workday is $836/year and drinking coffee at home after investing into a Keurig is $340. This is a savings of $496! What would you do with $496 extra bucks! During the pandemic, I learned that I am spending too much money on daily coffee.

Now I get it no one is perfect and does this every day. Again this is a hypothetical situation. I love Dunkin so there will probably be days where I will want to go get a Strawberry Frosted Donut and a $3.20/coffee from Dunkin. It happens and that is life! But I hope this calculation shows you how much money you can potentially save by drinking coffee at home vs. drinking coffee at Dunkin everyday.

3: I am pro-small business more than ever!

My first two points kind of sound like I am complaining about how everything is so expensive in the USA. Well, I kind of am and that is because of inflation and other factors. But that doesn’t stop me from still buying those products & services. We live in America and every person has the freedom to spend their money how they please. The COVID-19 Pandemic has been very hard for a lot of people in the world as it first started as a health crisis and then it became a financial crisis as well. Millions of people have lost their jobs and many have lost their lives…

As many of you know, I work in commercial banking, but not many people know that I was one of the people on the front lines trying to help save small businesses. I am actually considered an “Essential Worker” because I work in banking. The Coronavirus Aid, Relief, and Economic Security Act or CARES Act was passed by Congress and signed by President Trump on 3/27/20.

The CARES Act created the Paycheck Protection Program (PPP), which allowed small businesses to apply for loans with financial institutions and have those loans forgiven by the Small Business Administration (SBA). Ultimately and some point in time the $2 trillion spending package will have to be paid back by the taxpayers. My employer, Amalgamated Bank of Chicago, was one of those financial institutions that lent out PPP loans to customers. The whole thing was a total, utter, and chaotic mess as this was completely new all bankers so no one knew what to do. To make matters worse, all of the guidance was in government legal jargon so it was and still is ridiculously complicated to comprehend. But I stayed calm, managed my stress, and I kept on telling myself that small businesses are depending on you and you must do your job… I remember when I was talking with customers and I remember how some were sad, scared, angry, and/or frustrated that this was happening to them. These small business owners have put in the hard work and sometimes years to build up their business. And it can be taken away in seconds… It was a low point in a lot of peoples lives and life is not easy. But we have to stand by each other and move on.

It’s no secret that I am a huge foodie. Just check out my pizza and burger reviews! Chicago is a foodie’s paradise as it has some of the best restaurants and bars in the world! Unfortunately during the pandemic, many of the restaurant industry has struggled to stay open as people are afraid COVID-19 (rightfully so) and due to some local/state regulations barring them from indoor dining or restricting them to less than 50% capacity, this has made the restaurant industry adapt to those changes to stay open and not close their doors for good.

I have watched a lot of Bar Rescue over the years, which does not make me an expert, but I learned that the bars/restaurants depend on people coming into their place of business. Indoor dining is their main business line and some places their only business line. When you take away that main business line and people stop coming through their doors, the business has to adapt to stay profitable. That may mean cutting employee’s hours and/or jobs to stay profitable. But a lot of businesses tried to adapt by setting up carryout, they fought for the right to sell to-go alcohol, and set up outdoor dining before it comes down to cutting hours and jobs. It’s tough times, but these are the facts and that’s how business works. These businesses are fighting for their lives, not to mention the time and dedication it took for them to grow their businesses!

The COVID-19 pandemic has affected the travel/tourism, restaurant, and retail industries the most. Hertz Global and J.C. Penney both filed for Chapter 11 bankruptcy earlier this year, while Southport Lanes & Billiards (amazing memories there) permanently closed on 9/27/2020 after 98 years of business…

This is serious as we are in the middle of a financial crisis. Not only are people dying, but people are losing their jobs, taking pay cuts, and not being able to feed their families. Like I said above, this is also really affecting the restaurant industry the most. Restaurant employees are losing their jobs, taking pay cuts, and getting their hours slashed as they try to put food on the table for their families…

During the pandemic, I learned that I am very pro small business and I still eat out about 3-5 days a week to try to support these restaurants and their employees. I want to let them know that I am here to support them and I stand by their side when they need help the most! I am trying to help save small businesses in the USA and I urge you to try to support them too. The USA is one of the most generous countries in the world and we like to help out our fellow Americans. So again I urge you to help out small businesses especially in your community. They need our help and every dollar counts!

You can help out by going to your small mom and pop shops to buy things from them instead of national corporations. There are a ton of pros & cons of shopping local or shopping on giant retailers like Amazon, Walmart, & Target. For restaurants/specifically, you can order carry out food from them. You can tip on carry out orders when it’s not your norm (the very divisive debate). You can go to your local bar, have a beer, and ask the bartender how they are doing that day. Little things and generosity can go a long way!

4: Invest, invest, invest!

I cannot re-enforce how important it is to invest especially us Millennials. I consider myself pretty comfortable with investing, but I am by no means an expert. Like Dave Portnoy of Barstool Sports, I have been day-trading and short-term investing on the side during this pandemic. I’ve learned a decent amount and have certainly made a few mistakes, but it’s been quite a a learning experience.

My best experience is when I timed the stock market perfectly by investing a good chunk of change back in April when the S&P500 tanked by about 20-30%. I was like this is a perfect buying opportunity so I purchased some shares of growth ETFs, held onto them, and sold them back in August. I’ll just say that I am a very happy camper with my investment! For clarification, I typically NEVER RECOMMEND trying to time the stock market (buy low, sell high) as it’s a pretty poor strategy in the long run. You can lose a lot of money with this strategy, but you have to weigh the risk vs. reward in investing. However, I was so confident that the market would eventually rebound that I felt this was too good of an opportunity to pass up (if it sounds too good to be true, then it probably is) and I have a high risk tolerance. I knew the risk going in that I could lose all of my money, but I was willing to take it to reap the rewards. My plan was to buy and hold long-term and ride the stock market up/down. Truth be told, I didn’t think the stock market would recover and I would sell in 4 months as I thought it was going to take longer than 12+ months. But the investment worked out and I reaped the rewards!

My point is that you shouldn’t be afraid to invest especially if you are a Millennial and you are a buy and hold investor. We are not retiring for another 30+ish years so we can afford to take on that risk. I would recommend a buy and hold strategy, but I would also advise that you never let your emotions take over and you need to stick with your strategy. For example, if I was wrong and the market tanked by another 20% back in May and I let my emotions take over, panicked, and sold my investment for a 20% loss. That loss would be a 20% recognized loss and that would definitely sting very badly. That is what I mean by not letting your emotions get to you when you’re investing. Remember your strategy and follow it. Easier said than done in rough times though.

Investing is a risk and I realize that Millennials are afraid of investing because they saw their parents lose a ton of money during the Great Recession. But investing can be safe and it is still one of the best ways to make passive income if you have a good sound investing strategy. Check my post about investing if you want to learn more!

5: Emergency funds are still important.

During the COVID-19 pandemic, a survey by Fox Business showed that only 41% of Americans could afford to pay a $1,000 expense out of savings. 16% said they would use a credit card, 14% said ask friends or family for help, and 7% said they would take out a personal loan. That is still very alarming… A lot of Americans are still living paycheck to paycheck even after the 10+ year stock market bull run. The problem is that you would have had to be invested in the stock market during that time to reap the rewards and a lot of people didn’t. They were either scared (rightfully so), they just flat out didn’t invest, or didn’t know any better. The other problem is that wages remained stagnant while inflation rose. Obviously, you do not want to be living paycheck to paycheck and it is important to save and invest. That is a reason why I am writing on this blog so I can help ordinary Americans with their finances.

In fact, I think having an emergency fund is so important that I made a life choice to create a 3-6 month emergency fund over saving for a down payment to buy a home. Due to the Great Recession, Millennials have pretty much put off every major life event of the American dream like getting married, buying a home, and having kids. We live in the USA where we are free to make these decisions for ourselves. You choose whether or not you want to go to college or buy a home. You choose if you want to work at McDonalds for the rest of your life or start your own business. You choose when you fall in love, get married, and settle down in life and have children. These are all life choices we make and you must live with the consequences.

Also, you choose whether you want to establish an emergency fund or not. The Fox Business article above says, only 41% of Americans can use savings to pay for an unexpected $1,000 expense. Emergency funds are still important especially right now during the COVID-19 Pandemic. What if you got laid off during this pandemic and you didn’t have an emergency fund. How are you going to pay your bills so you and your family have a room over your head and meals to eat? Well you could file for federal and state unemployment (which won’t cover all expenses), ask friends or family for help (hopefully you have nice friends and family), or cut expenses (goodbye $3.50 Dunkin coffee everyday). If you had an emergency fund, this would have been the perfect time to start using it and you would be able to pay your bills while you look to find a new job.

Everybody’s emergency fund should be suited/tailored to them and their situation. Maybe 3 months is enough because you will be able to find another job easily, you have little expenses, or your spouse has income coming in, etc. Maybe you want 6 months because you are the sole breadwinner of a family of four and 6 months gives you comfort at night. That’s why almost all financial experts suggest having an emergency fund that will cover 3-6 month’s worth of expenses and I definitely concur with those experts!

2020 sucks, but there is light!

I realize that this post was a little gloomy, but I wanted to tell the truth and share my thoughts. 2020 has sucked for a lot of people so far and I have had some low points this year. But it’s important to stay mentally strong and remain positive. Don’t be afraid to ask for help as there are good people in the world and they can help you. I’m here to help and we can get through this together!

Bonus: Don't give health insurance information to testing sites.

During good times and especially during bad times when people are scared, fraud will always happen and usually more often… There are despicable human beings out there and they will give you no mercy and steal everything they can from you if you allow them.

I found this article in Timeout about how not all testing sites are legit and they are trying to trick you. Don’t fall for it because it’s a trap.

By law, COVID-19 tests are free to anyone in the US. Oddly enough the testing site that I use, Curative, and even CVS (where I got tested once) asked about health insurance information, but you can opt out and say you don’t have health insurance. I gave the information to them without thinking as I trust them, but as of recently I have started thinking differently. What if the US changes their mind and say testing sites/insurance companies can charge for COVID-19 testing in the future? If they have your insurance information on file, then you can possibly get a fat bill in the future if that happens. I don’t think this will actually happen, but it is still a what if scenario and something to think about. Here is an article in the NY Times, stating how much some of the COVID-19 tests cost. What if the the US changes course about charging Americans for COVID testing? If you provided your health insurance information and the US changes course, then you could possibly be getting a fat bill in the future… So that is why I am now against giving health insurance information to testing sites.

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