COVID-19 and retirement.

In a piece over at Money Talks News today, I address a Pew Research Center study about COVID-19 and retirement. But I didn’t write the headline.

That’s because “7 unusual tactics to keep COVID-19 from derailing your retirement” was made up of tactics that I personally don’t see as all that unusual.

Then again, a lot of money tactics/frugal hacks that others think are offbeat don’t strike me that way.

Learning to cook. Delaying a purchase if it means saving either money or your budget. Stocking up on items at today’s prices ahead of the inflation that’s already taking place.

But as I learned from my early days at MSN Money: It’s always new to somebody. Maybe to a whole lot of somebodies.

During the 2008 recession, personal finance blogs were offering posts on topics like “how to pack a lunch” and “how to save money by going to yard sales and thrift stores.” These are things that strike me (and maybe you) as just basic adulting skills.

This morning DF and I were talking about these and other basic skills. I reminded him that a lot of success as an adult depends on what you grow up hearing. For example, no one ever said to me “it’s best to start saving for retirement early because of compound interest.”

I was well into adulthood before I learned this – and other people would probably have responded, “How could you not know this?” Because we don’t know what we don’t know, that’s why. What I heard growing up was, “Work hard, pay your bills and if there’s anything left over, put it in the bank.”

Had I known better, I’d be so much farther ahead when it comes to money. For that reason, I’m going to add a few more tactics that could help people with regard to COVID-19 and retirement. If they sound familiar or even oversimplified, remember: We don’t all start at the same place.

 

1. The financial fire drill

This is pretty simple: You figure out the absolute basic cost of your baseline expenses: food, shelter, utilities and debt service. Assuming some or all of your income went away, how would you cover those costs?

Again, we’re talking absolute basics, such as:

No more meals out – you’d put together meals that are as inexpensive as possible while still being both tasty and nourishing

If you’re paying more on the mortgage, you’d temporarily pause; if you live in a pricey apartment, you’d at least investigate what it would take to move; if there’s space, think about how you might take in a roommate

Turning the thermostat up or down (depending on the time of year), looking for better deals on phone/Internet, cutting cable and/or streaming services (enough free stuff is available to keep you entertained)

Making minimum payments on credit cards for a while to conserve cash; calling the card issuers to ask if you could get a lower rate; if things got dire enough, learn about how to get a hardship rate (which would likely require canceling a card or two but which would protect your credit score)

Learn more of the specifics at “In case of emergency, do a financial fire drill.”

No one wants to think about this. But everyone should.

2. Pad your emergency fund

Is an emergency fund proof against disaster? Nope. But it sure helps.

After all, the pandemic isn’t really over and its effects could linger. We’re experiencing inflation right now, and some people still fear hyperinflation.

The more cash you have on hand, the more likely you’ll be able to weather a personal economic downturn such as un- or underemployment, illness or sluggish sales at your company.

It’s unlikely that you can pay your rent/mortgage with a credit card. Having liquid savings might be what saves you if unexpected push comes to nasty shove.

Saving isn’t always easy. I get it. But having an emergency you can’t begin to cover isn’t easy, either. For tactics on how to squirrel away a few dollars here and there from even the tightest of budgets, see the “Challenge Yourself to Save” chapter of my first book – it’s available as a free Google Doc.

3. Saved savings

You might have saved $10 on the groceries with coupons, or trimmed 20 percent off new sneakers at a sale – but where is that money now?

Sometimes those savings are the only thing that gets you such items in the first place. Too often, it just means, “Hey, I can spend an extra bunch of bucks!”

By sending that money to a separate account (not back into checking), you’ll actually save your savings. For tips, see “Join me in the Saved Savings Challenge.”

4. Service trims

For example, you might have the cleaning service come a couple of times a month instead of weekly. You could also try the magic of speed-cleaning, thereby reducing the service to once a month – or not at all.

Maybe there’s something you can learn to do yourself, such as mowing your own lawn or cutting the dog’s nails yourself (my sister said the clippers she bought paid for themselves the first time she used them. Do your own nails some of the time, too, instead of opting for weekly manicures or mani-pedis.

My teen-aged niece has been dyeing my hair since the pandemic started, and it’s worked out so well I won’t be going back to the salon. And I now go to the beauty school for an $11 haircut every seven or eight weeks.

5. Holiday revamps

Talk with family and friends and agree on rational limits. Maybe that means limiting gifts to those under 18 and/or setting a limit on how much can be spent. Adult offspring might ask for gifts they can’t currently afford: music camp or sports fees for their kiddos, streaming service gift cards for themselves.

The giant meal with multiple meats and innumerable side dishes and desserts could become a smaller-but-still-tasty potluck. Your annual open house could be reimagined as a “cookies and cocoa/punch” event rather than a buffet. And so on.

You may feel weird proposing this, but take heart: Chances are at least one other person in your extended family is also feeling the pinch. They’ll be glad that you brought it up so that they didn’t have to stick out their own necks.

For other tactics, see “17 Ways to Keep Your Holidays Debt-Free.”

6. Staying optimistic

Easier said than done, I know. (Boy, do I.) But the more positives you can find, the less chance that the negatives will send you into an anxiety spiral. Look for what you have going for you and make a list. Better yet, speak it out loud:

“I got through (insert number) tough spots in the past. I will get through this one, too.”

“Since we did that financial fire drill, I know we could make it even if one of us gets our hours cut at work.”

“My car is paid off.”

“We have some savings.”

“When kiddo starts school next year, I’ll have to pay only for the afterschool program instead of full-time child care.”

The bottom line

You don’t have to use all of these things at once, or even at all. Maybe several of these options will be all you need to get yourself on track.

The impact might seem small at first. We shaved $30 off our grocery bill last month, but is that really enough to retire on?

Of course not. But it’s a start. Every dollar you don’t spend is a dollar that can work for you in some other way: beefing up cash reserves, helping an older relative or, yeah, staying on track for retirement.

Readers: Have COVID-19 and retirement been of concern for you? If so, got any tips on adjusting your actions and/or outlook? 

Related reading:

• “I can’t afford to retire”
• Nearing retirement? Check your credit
• 5 ways saving for retirement is like a marathon