Writing About Financial Independence During a Pandemic

I’d like to preface this by saying that I am not a financial adviser or professional, and information is being provided for general education and discussion purposes. Questions about your own unique situation should be directed to an accredited professional, ideally a fee-only financial adviser, who can best guide you based on your own unique situation.

Please also check your local, provincial/state and federal governments’ websites as many measures have been put in place to support both individuals and small businesses who may be struggling right now. Help is widely available so please do reach out to the authorities or your local community organisers to find out how you can receive the to which you are entitled.

Photo by Shopify Partners from Burst

Yesterday was April 25, 2020, or as it is numerically expressed: 4/25/2020. This may not immediately jump out as significant, but for personal finance nerds, the “4% safe withdrawal rate” and “25 times annual spending” are some of the key tenets on which the FIRE movement, a.k.a. Financial Independence Retire Early, is built.

Without getting too technical, the Trinity Study shows that you can safely stop working for money (or retire) on a nest egg of 25 times your annual expenses (e.g., 25 x $40,000 = $1,000,000) if you withdraw 4% of that nest egg every year (e.g., 4% x 1,000,000 = $40,000) adjusted for inflation. Depending on how much money you can earn, or choose to live off, the nest egg can be bigger or smaller. That makes 04/25 pretty special.

While stumbling across 425 is a fun quirk, I can’t take credit for this clever discovery; other wittier finance nerds like Ty Roberts talked about it at CampFIREfinance and declared last year the First Annual Financial Independence Awareness day. I discovered this serendipitously when I stumbled across Josh Overmyer’s blog yesterday. I searched for other news or events marking the day as the Second Annual event, but I couldn’t find anything. In all likelihood, with Covid19 on everyone’s mind, celebrating retiring early and the escape from the rat race might seem a little out of touch when so many people are struggling to make ends meet.

With that said, the FIRE movement is prefaced on two ideas, and the “financial independence” aspect, in my opinion, remains as relevant as ever. While it can be defined many ways, financial independence to me means having enough to never to worry about money again. I would argue that taking control of one’s finances and spending less is always an important thing to do so that when hard times do hit, as they have now, we can do everything within our individual power to make our family budgets recession-proof. The concepts behind Financial Independence help us achieve that.

Photo by Matthew Henry from Burst

I, myself, am nowhere near retired, nor am I close to financially independent, but ever since discovering the FIRE movement four years ago, I have worked steadily to wipe out our family’s consumer debt and start building a small investment fund. With a global recession on the horizon, and the stock market in chaos, I still find myself in a position where I don’t have to worry about the next few months because I scrimped and saved, and built my emergency fund. I don’t even need to touch my investments for many years, so I’m not worried about the ups and downs of the market. Unfortunately, as this pandemic caught us all by surprise, I also know that too many are not as fortunate right now.

Photo by Shopify Partners from Burst

What makes this discussion in the middle of a global crisis especially challenging is that people may be starting from different financial footings, and so the advice for someone who has no emergency savings and has lost their job will be entirely different from the advice for someone in a dual income household with a sizeable nest egg. At the end of the day, there is something to be said about not having to live anxiously reliant on insecure paychecks, and there is comfort in the freedom to decide how best to spend your time.

With this in mind, it is my hope to share strategies for a wide range of scenarios over the coming months. For now, here’s a basic primer.

Knowledge and Communication

Some of the key principles to making it through hard financial times and achieving financial independence are universal: cut back on expenses and increase your income. As the gap between these two amounts grows, so too will your financial security.

First, you need to have a strong understanding of your family’s current financial situation, including the ins and outs of all of the fixed and variable expenses, as well as all debts (e.g., mortgage, car lease, credit card, line of credit, personal loans, etc), even the ones you may not previously disclosed to your partner. While this isn’t the case for our family, you’d be surprised how many of my acquaintances have admitted to never having discussed money with their spouses, or have discovered maxed out credits cards under their names. Ouch.

While I won’t get into marital issues here, one thing is certain is that better communication can lead to better finances, and that can improve stress in a marriage, so that’s something to consider. One way or another, discussing finances can get a little uncomfortable, so make sure to approach it in a compassionate way, in partnership with your loved one.

Photo by Matthew Henry from Burst

Laying out all of your money’s inflows and outflows doesn’t need to be fancy; pen and paper will do, just make sure it’s comprehensive. Pour over bank and student loan statements, credit card statements, gather all of yearly subscriptions and tax bills. Have it all in front of you and understand where your money is going, and how much of it is optional. Alternatively, you can use software to make this process simpler. I have used Mint.com for years (it’s also free) and it has been great for giving me a snapshot of my bank and credit cards in real time.

Sit down with yourself or your partner, have an honest conversation about where everything stands, and what needs to be done. Otherwise, you could be working at cross purposes.

Next, find good, reliable information about how to manage your money, your debt and your options, and implement strategies to improve your standing. One place you can start is Canada’s Office for Consumer Affairs site, or the Financial Consumer Agency of Canada’s free budget planner, or search for sources of reliable advice that are more local to you. If you don’t have a good handle of your finances, I would strongly recommend starting a budget. I don’t believe budgets are necessary for everyone, but they are if you don’t have a clue about where your money is and where it needs to go.

The next step is developing a plan, together with your partner, to live on less. This will be personal and depend on your income and cost of living, but keeping your goal in mind will help trim your expenses and make the shift bearable, if not enjoyable.

Cutting back on expenses

Cutting back expenses is key to getting your finances back in order, or to building savings. That can mean a range of changes you’ll need to implement, and can include strategies like:

  • trimming your cellphone plan (because you’re home now and can connect through Facetime or Zoom)
  • renegotiating your insurance policy (some companies are issuing discounts due to reduced driving)
  • couponing and pricematching
  • cooking your meals at home instead of getting take-out
  • reducing your meat consumption (which tends to be more expensive and carries a heavy carbon footprint)
  • kicking vices like alcohol or smoking, or
  • buying only things you absolutely need and, where possible, buying them second-hand.

There are countless pages online that you could peruse for tips to stretch your dollar. What matters is that you actually do them and cut back enough so that you stop accruing more debt and start building a surplus.

Photo by Shopify Partners from Burst

If you’re seriously treading water right now, perhaps it’s time to consider more significant changes, like selling your home and moving to a city or town with a lower cost of living. You may need to consider taking a sabbatical from school, selling an asset like a vehicle if you can make due without, selling some of your excess items like baby clothes and toys you no longer need. Or, if need be, you may have to move in with loved ones while you get everything sorted. Some, like Cait Flanders, have even done a no spend year or two. If any of these are not possibilities, reach out to local NGOs that can help you apply for the social assistance you need. Help is out there.

If at all possible, stay current on your debt payments, even if it’s only the minimum payment. But if you can’t, make sure to at least get in touch with your creditor to negotiate an extension or some kind of flexibility. Do what you can to keep your credit score intact, but if it’s between that and putting food on the table, I know my priority would always be keeping the kids fed.

Increasing your income

Cutting back expenses can seem grim, especially in situations when there was so little to go around in the first place. The other prong to this strategy then is to find ways to bring in more money to offset some of your costs, or build some cushion.

Finding new sources of income can be challenging in the best of times, so I acknowledge that it will be doubly so during a global shutdown. People are being laid off, unemployment rates are rising steeply. Parents are at home with their children trying to work while managing a home and also having to teach their kids. Time, or new employment opportunities, may not be abundant right now. I get that. Do what you can, don’t stretch yourself too thin; ensuring you don’t burn yourself out is equally as important, if not more important, than financial security.

In its simplest expression, your income, minus your expenses is equal to your savings, or investable capital

But with this ever-changing landscape also comes opportunity. Looking around, we can see some businesses thriving during the pandemic, and others that may not survive. Learning to anticipate and meeting the community’s needs could end up giving you the source of income you’ve been looking for. Keep your ears on the ground, think about how your life has changed and what would help you get through it. Therein lie the opportunities for any hungry and entrepreneurial personal business or side gig.

Here are eight Covid19 relevant examples, although revenues from each will vary greatly:

1- virtually babysitting older local kids through videoconferencing sites

2- being a personal shopper (using proper hand-washing and protective gear) for those who are shut in

3- virtually tutoring kids who need help with remote schoolwork

4- leading an online class (yoga, math, meal prepping, kombucha making, whatever you like and are good at)

5- picking up amazon delivery gigs

6- making and delivering catered homecooked meals to friends who are struggling to find time to eat healthily

7- making and selling cloth masks (YoutTube has lots of tutorials)

8- monetizing a blog or YouTube channel by creating content about the things you know and love.


Getting a hold of our finances means spending less than we earn and investing the difference, which is the final piece of the FIRE equation. The reason for this is that investing is an opportunity for the surplus money you may have created to start working for you. Money that is invested can, over the course of course of decades, grow exponentially.

The day that the return on these investments has grown greater than your expenses is the day you have achieved financial independence. This is spelled out with great clarity and simplicity in Mr. Money Mustache’s seminal: The Shockingly Simple Math Behind Early Retirement, a blog post that would unknowingly but unsurprisingly start the FIRE movement.

Financial independence may seem like a lofty goal, but every moment between now and achieving financial independence is one in which your finances become more secure, and your life more free.

A few years ago, the very mention of the word investing would make me feel anxious and woefully out of my depths. I had visions or Wall Street types with Maseratis, and my mind would conjure up financial jargon like “hedge fund”, “sub-prime mortgage backed securities”, “bear market” and “short-selling”, none of which I understood and all of which filled me with dread. Investing seemed like a secret of the business class, and I had no idea where to even start.

Snapshot of stock prices as they closed on April 24, 2020

The good news is that it investing remains one of the best wealth-building tools that is easily accessible to anyone. A basic investment strategy can be quite straightforward if you follow some basic principles. Better yet, you don’t need a fancy degree or even thousands of dollars to do it, and it doesn’t need to fill you with terror.

You can get started with the help of an adviser, or even invest it yourself if you are so inclined. How much you choose to invest is also up to you. Investment rates of 5-10% per year are recommended for a standard retirement age. Increasing this amount to 20, 30 or even 50%, as some have done, can really accelerate the date at which you reach financial independence.

There is far too much to be said about investing than I can cover here, so stay tuned to for its own dedicated series in the future. In the meantime, allow me to share some of the free online resources I found tremendously helpful in my own fledgling investing journey, including Millennial Revolution’s Investment Workshop (which gets into granular detail about how to open an investment account, foolproof investment strategies, types of stocks to consider, etc), J.L. Collin‘s investment series, and Investopedia for a primer on the basic principles and definitions, and the Canadian Couch Potato for examples of model portfolios.


April 25, or 425, may still be an obscure and nerdy date, but I hope that it’s a little less obscure for you now. Using this occasion to discuss personal finances and some advice on putting our financial houses back in order is timely, especially now when so many of us worry about what the economy and our financial futures will look like.

Using these principles can provide a more secure financial future or help dig us out of more challenging financial circumstances. Either way, they’re always very relevant.

And now I turn it over to you. Were you are of the FIRE movement? Had you come across 425 before? what are you doing differently with your finances now on account of the pandemic? Do you have other suggestions for new Covid-appropriate sources of income you’d like to share? I’d love to hear your thoughts on these and other related ideas

2 thoughts on “Writing About Financial Independence During a Pandemic

  1. Great post, Mary! Just starting on my financial independence journey (24.5 cycles around the sun) and I found your post insightful and refreshing. Like you said, in times like these, you can’t help but feel grateful to have been on the path sooner than later. I’m fortunate to be working in an “essential business”, but having the emergency fund ready to go has brought a whole other level of confidence during periods of poor(er) market performance. I’m confident good things lay ahead.
    Warm regards,


    1. Thank you so much Grant for your positive feedback, I really appreciate it. It’s so remarkable that that you are already so serious about financial independence at an early age; you have the gift of time ahead of you and it is one I wish I hadn’t wasted myself. May you remain steadfast on your path and may good fortune come your way.

      By the way, I also took a peak at your blog wanted to say you have a readable, enjoyable style; it flows like a gentle stream. I look forward to hearing more about your journey to financial independence in the coming weeks and months.
      Take care and stay safe,

      Liked by 1 person

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