Covid-19 brought the fitness industry to a screeching halt on April 7th 2020 with the start of Circuit Breaker. Gyms shuttered, exercise corners blocked and stadiums closed. Many fitness professionals were left in a lurch. No sessions = no income. A small group have since adapted to conducting online classes or online coaching, but a majority seem pretty stuck at wondering what their next step should be.
I'm pretty fortunate cos I've zero debt and have my emergency fund in place. That meant that I didn't need to worry when my company mentioned that they were going to pay only our basic salary, or even when they told us we would be facing a 10% pay cut. I knew I'd be able to ride out this storm with my emergency fund, at least until we started working again. And thankfully, I have a part time job at Cold Storage during this period which means I have a secondary stream of income coming in to add on to my basic pay.
Through all of this, it has enforced my understanding to these 3 lessons:
1. Budget Is Key
With little to no income coming in, setting up a budget to help tide you through the months of no work will help you pace your expenditure. Take some time to sit down to write out your expenditure needs for the month. What needs to be covered includes housing, utilities, food and transport. Then include your month rental/mortgage and credit card bills (keep to minimum payments if possible). Work that out and see what you can cut to help your save even more. No, bubble tea is not a need.
2. Emergency Fund For Emergencies Like This
Many experts in the world of personal finance will happily nag at you over and over again on the importance of having a 3-6 months emergency fund. Truth be told, you wouldn't freak out as much at the sudden loss of income if you had enough in your emergency fund. That's if you have an emergency fund. And if you don't have one, it is time to consider starting one when work resumes.
A fully funded emergency fund during these times can prevent you from going into debt and provides you with a peace of mind during such a crisis. The last thing you need right now is the accumulated stress from worrying about work, money and food. Interesting fact, most couples fight because of finances. You'd have a more peaceful household if everyone knew they are well taken care of. Maslow's hierarchy of needs.
3. Create A Secondary Stream Of Income
The term "passive income" can be very misleading. It does sound like you can get money without doing anything, but that clearly is false. It is a lot of hard work and takes up a lot of time, but it is also necessary so you are not putting all your eggs in the same basket. Having a secondary stream of income helps buffer the fallout should you suffer a loss of work or a pay cut. This secondary source of income could be from working part time at the supermarket, working as a Grab Car driver, or even creating and selling digital content. As mentioned, It is a lot of work and takes up a lot of time. Not that you have a lack of that at the moment.
Putting those few extra hours each day to work will help you grow your wealth and help you save up for a rainy day. Just make sure you budget for it.