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Essay
Our writer entered the pandemic believing he was in good shape financially. Now, he says, he has a lot more to do.
By Paul B. Brown
When you’re essentially confined to your house for weeks, you have a lot of time to think.
I thought most about preserving the health and safety of friends and family members. But soon I found myself obsessing about my own finances: Like so many others, I had a big problem.
As a freelance writer, I lost most of my income virtually overnight, putting me in the same situation as tens of millions of people whose paychecks vanished. Many people got government stimulus checks. I was not one of them.
Because I’ve followed the financial advice I’ve reported on for years, I wasn’t in terrible shape. I had an emergency fund and kept a respectable portion of my portfolio — about 35 percent — in medium-term bond mutual funds, which held up well while the stock market plummeted.
But now that things seem to be slowly inching toward normality, I am planning to learn from this crisis and do some major tweaking of my finances.
Here are the three things that are going to change:
The standard personal finance advice is to have at least three months of living expenses stashed away in something liquid and ultrasafe, “just in case.” That made sense to me long before the coronavirus began to spread.
But I didn’t pay a lot of attention to the money I threw sporadically into my emergency fund and I didn’t know how much I’d stashed there. Fortunately, when my phone stopped ringing and potential employers stopped answering my emails, I had more than four months of money squirreled away.
That was really good.
It was so important that I am going to try to get that number up to a year’s worth of reserves. (It’s going to take a while.) The goal is more to create peace of mind than to increase my net worth.
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