90 Degrees

A pandemic silver lining: margin

What a ride 2020 has been! No one could have predicted as we began the year that this is how it would be winding down. The COVID-19 pandemic has changed everything. It has been the most challenging, stressful event of our lifetimes, and we’re grappling with the fact that we may only be in the middle of the storm. Where does this end? What does the world look like on the other end? The year has been a roller coaster of emotions, loss and hope, misfortune and fortune. Yet at the most challenging times of our lives is where we find faith, find ourselves, find the true meaning of life, find what is really most important, find the signal in the noise. As I reflect on the year personally and discuss it with others, one silver lining consistently stands out: the pandemic allowed us to find margin in our lives.

As we all know, what we have gets filled up: time, money, space. Our schedules are busting at the seams, we live paycheck-to-paycheck, and as soon as we rent that storage unit, we need a second. The situation always seems hopeless though because margin doesn’t create itself, and we think the only way to create margin is to have more. If I only had more time; if I only made more money; if we only had a home with a little more square footage. Unfortunately, as soon as we have more, that gets filled up, too. Yet the pandemic and its forced business and economic shutdown, perhaps for the first time ever, created margin.

For months, many of us had nothing but time. Of course, we found ways to fill it, but we finally had to answer the question: what would we do if we suddenly had all the time we always wanted? What would we do if the overbooked calendar we’re always lamenting were suddenly wiped clean? No work, no taxi service for the kids, no parties, no living by a calendar.

I don’t know about you, but to begin with, I reveled in the free time. Getting things done around the house that had been on my todo list for far too long, spending time with my family, even reading a good book. I could get used to this.

But as time dragged on, cabin fever set in and the stress of the uncertainty of our economic future began to weigh heavy. I don’t think we’re made for that kind of isolation for long stretches. We’re social beings, and we need to connect with people to recharge our batteries. We need to work to provide for our families and a sense of purpose. We need something worthwhile to fill up all that margin.

As we slowly emerge, though, I’m hesitant to add too many things back. I don’t want to live in a void of an empty schedule forever, but I want to hold onto some of that sweet margin I stumbled onto, too. Each request on my time is evaluated and carefully considered to determine if it adds to or takes away from my life. I realize now that the margin was there all along; I just had to choose it. All those times I said yes to something I really didn’t want to do but I was afraid to say no, I was actually saying no — to myself, to my family, to the margin I convinced myself didn’t exist.

Not only did we find margin in our time, but also in our budget. Now, don’t get me wrong — the pandemic has been a financial nightmare for most people. Business owners who were forced to close their businesses permanently, people who were laid off for what was supposed to be a short 2–3 week effort to “flatten the curve” are still without work, and even those who are fortunate enough to have a job face a very uncertain future.

What did the economic shock force us all to do? Evaluate our expenses. When income plummets or disappears completely or we wake up to find the black swan of the entire economy coming to a screeching halt for months or even years at a time, we are forced to look at the only thing within our control: what we spend. We have no choice but to take a hard look at our needs vs. our wants.

You may not have thought about it before, but now you understand the critical difference between fixed and variable costs. Your fixed costs don’t pause because your income paused. You owe on your mortgage or rent, insurance, utilities, car payment, credit card payment, internet, Netflix, and every other recurring monthly subscription. Now, some of those fixed costs are not in a contract and are month-to-month, so you can cancel any time, and you can bet that’s exactly what you did! For those fixed costs that you can’t eliminate, you’re at least aware now of the importance of keeping fixed costs as low as possible, and you’ll seriously consider before making another commitment that will add to your ongoing monthly costs in the future. Maybe you’ll even consider prioritizing paying down debt to reduce future fixed costs.

As for your variable costs, you figured out how to squeeze every last penny. In this case, so many “non-essential” businesses were closed that some spending was cut by default — you couldn’t shop those stores if you wanted to. For the rest, nothing was safe. It was just like our time: our financial slate was wiped clean, and we started evaluating every single expense before it was added back.

You may not realize it yet, but all that cost cutting created margin you didn’t know existed. It may not feel like it now because you’re out of a job or earning less, so it’s still painful and difficult, if not impossible, to make ends meet, but when you’re able to get back to work, keep spending how you’ve been spending during the pandemic. I know the world is telling you, begging you, to get back out and spend for the sake of the economy, but I urge you to resist the temptation, maintain the habits, enjoy the new-found margin in your budget, and critically think about where that extra dollar would be best used.

You may be able to start paying off debt after all. You may be able to open a savings account for the first time in your life. Regardless, you will realize that there was margin there all along, and you are in control of your money.

One of my coworkers said she’s amazed at how much further each dollar is stretched today vs. at the beginning of the year. She’s packing a lunch instead of doing carryout every day. She makes coffee at home instead of buying a cup on the way to work. She no longer feels like a $20 bill is burning a hole in her pocket and is surprised at the end of the week when that same $20 bill is still in her wallet. And, most amazingly of all, she realized that if she keeps this up, she can be debt-free and finally save for a down payment on the house she’s always wanted.

Before, when personal finance gurus preached about penny-pinching and the “$1 million latte”, we cringed and dismissed the advice as unrealistic, only for zealots who have given up on having any enjoyment in life. Now, we’ve experienced life without the latte, and you either realized it’s not so bad or that you really can’t live without a morning latte. There’s no right or wrong answer, but going without has forced us to evaluate what is truly valuable to us and spend accordingly. Maybe you can’t go without a latte but cable TV is definitely not worth the cost every month.

For my coworker, she realized the latte wasn’t important, but maybe you were itching to get back to your morning commute to pickup your latte on the way.

I think the difference is we’ve learned to evaluate our expenses, focus on what we value, and eliminate everything else. Our attitude towards money has changed. We spend because we want to and are able to, not mindlessly or because we feel some strange obligation. We spend with a purpose.

While I cringe every time I hear someone refer to the “new normal,” maybe in this light it’s not so bad. Maybe we’ve found the ever-elusive margin we’ve always wanted. Maybe we’ll have more time in our schedules and more money in savings. Maybe we’ll slow down and prioritize how our time, money, and space gets filled up. Maybe we’ll choose quality over quantity. Maybe we’ll block out the noise and choose for ourselves. But we better make that decision now and protect the margin, because it won’t be long before the pandemic is behind us and the overwhelming demands will start pushing in again. This time, louder than before.

Sharing thoughts on money, business, tech, faith, and life. I hope you learn from my mistakes!

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