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Staying home during COVID freed up hundreds of dollars a month that I'm spending in 3 ways to build wealth

Published by Business Insider on Sun, 21 Feb 2021


<p><img src="https://static3.businessinsider.com/image/5f3f979b89aff80028ab70d7-1200/jen%20glantz%20hiking.jpg" border="0" alt="jen glantz hiking" data-mce-source="Jen Glantz" data-mce-caption="Walking around new cities was the best way to learn my way around and see new things fast."></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>A couple of months into the pandemic I realized that <a href="https://www.businessinsider.com/how-to-budget-money" target="_blank" rel="noopener">my budget</a> no longer made sense. I had categories on there that quickly became extinct. The cash I had allocated for brunch with friends, weekend excursions, local activities, and even for new clothes had gone completely unused because those were things that I couldn't do at the moment (especially while we were in a full shutdown in New York City).</p><p>I started to see that I had around $300 to $500 a month that I had previously carefully budgeted for, that was sitting idly in my <a href="https://www.businessinsider.com/how-to-open-high-yield-savings-account-online-save-money" target="_blank" rel="noopener">savings account</a>. I figured, rather than just leave it there or add it to other categories of my budget, I'd use it strategically to benefit my overall financial portfolio and future planning.</p><p>Here's what I did with the extra monthly cash from my budget that went unused in 2020.</p><h2><strong>1. Filled up my emergency fund</strong></h2><p>It had been a year or two since I did anything with my <a href="https://www.businessinsider.com/how-much-money-to-save-in-emergency-fund-rules" target="_blank" rel="noopener">emergency fund</a>. After getting laid off from my full-time job in 2016 and becoming a full-time entrepreneur and freelancer, I spent time <a href="https://www.businessinsider.com/personal-finance/how-to-grow-your-emergency-fund" target="_blank" rel="noopener">regularly adding to my emergency fund</a>, since working for myself meant more financial risk. After I had enough money in that fund to last me six months, I decided not to add a penny more.</p><p>But when the pandemic hit and I had to tap into that fund a little bit to cover bigger bills (such as rent and a few health bills), I decided to use some of my unused budget cash to get that fund back up to the amount I'd had in it pre-pandemic. Every month, I added $50 to $75 to my emergency fund and by the end of the year, I had replaced all the cash I took out.</p><p>To keep my emergency fund growing (since I feel I'm even more at risk of needing it as an entrepreneur and freelancer in 2021 with the ongoing changes caused by the pandemic), I've committed to contributing 25% of any unused cash from my 2021 budget to this fund.</p><div><style> #div-gpt-ad-1579713650634-0 > div > iframe { width: 100% !important; min-width: 300px; max-width: 595px; } </style><script async src="https://securepubads.g.doubleclick.net/tag/js/gpt.js"></script><script> window.googletag = window.googletag || { cmd: [] }; googletag.cmd.push(function () { googletag.defineSlot('/1035677/Business_Insider_', [[1, 1], [300, 139], [595, 139], [300, 250], [595, 250], [300, 360], [595, 360], [300, 475], [595, 475]], 'div-gpt-ad-1579713650634-0') .addService(googletag.pubads()); googletag.pubads().enableSingleRequest(); googletag.pubads().setTargeting('category', ["Banking"]).setTargeting('subcat', ["Savings Accounts"]).setTargeting('post_id', []) .setTargeting('post_url', []) .setTargeting('keyword', []) .setTargeting('company-product', []) .setTargeting('post_title', []); googletag.enableServices(); }); </script><!-- /1035677/Business_Insider_ --><div id="div-gpt-ad-1579713650634-0"> <script> googletag.cmd.push(function () { googletag.display('div-gpt-ad-1579713650634-0'); }); </script></div></div><h2><strong>2. Contributed more to my retirement account</strong></h2><p>Contributing to my <a href="https://www.businessinsider.com/sep-ira-solo-401k-save-for-retirement-self-employed" target="_blank" rel="noopener">SEP IRA retirement fund</a> has been a slow process for me. I only started this retirement fund a few years ago, but it's something I've wanted to make a priority. At the moment, I contribute a set amount every month.</p><p>I have a lot of work to do to get my retirement fund where it needs to be, so I decided to add an extra $100 to $125 a month from my unused budget cash. This gave my account a significant boost by the end of 2020.</p><h2><strong>3. Added more money to my investments</strong></h2><p>Putting more money into my taxable investment accounts hasn't been a priority or even something I did consistently. But in an effort to build long-term wealth in those accounts, I decided to set a monthly goal of depositing between $100 and $125. I'd like to be able to rely on the growth of my investments down the road, so I feel good about contributing more regularly now.</p><p>By taking leftover cash that I would have spent on fun activities or travel in 2020 and using it to fuel my financial goals, I've improved my money strategy and even gotten a clearer picture of the changes I need to make to keep up with my goals. It also showed me that even when I start spending money again on "fun things," I need to carefully re-do my budget to make contributing to my emergency fund, retirement fund, and investment accounts more of a priority.</p><div><div class="iframe-container" style="height: 510px;"><iframe src="https://moneymade.io/expandableDiscovery'utm_campaign=paidOnly&amp;utm_medium=embed&amp;utm_source=businessinsider" width="100%" height="510" frameborder="0" loading="lazy" allowfullscreen allowscript></iframe></div></div><bi-shortcode id="related-content-module" class="mceNonEditable" data-type="more-personal-finance-coverage" data-sheetname="More Personal Finance Coverage">Related Content Module: More Personal Finance Coverage</bi-shortcode><p><a href="https://www.businessinsider.com/personal-finance/strategies-build-wealth-post-pandemic-future-2021-2#comments">Join the conversation about this story &#187;</a></p>
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