Our Essay Question
- How has the pandemic informed your outlook on your financial future, and what money lessons have you learned from such a high-impact event?
Response from J.W.
Have you ever thought about what would happen to your family if you passed away today? I know death is never what anyone ever wants to think about, but knowing what will happen to your loved ones after you are gone is important. Are you prepared to fund your current lifestyle for three months if you got laid off, injured or fallen ill today? Talking about finance is still taboo in many households today. However, knowing your financial situation and understanding financial literacy is so critical. The COVID-19 pandemic has changed the outlook of my financial future for the good.
Looking for more money for school? Enter our scholarship essay contest!
Unfortunately, the year 2020 was a tragic year for my family, not just because of the pandemic leading to my father’s lay off but also due to significant deaths for my family. Both my paternal and maternal grandmothers passed away within a month of each other. Neither of my grandmothers had life insurance or planned their deaths in detail before getting sick. In Chinese culture, talking about death and money is two of the most taboo topics. Due to these taboos, I had to watch my family suffer and go into debt, especially my father.
In October 2020, my paternal grandmother passed away due to organ failure, and my dad was partly responsible for funding the funeral arrangements. The funeral cost approximately $35,000. Most people do not have that type of money just sitting around. He could not afford his entire share, so I used part of my savings to help him. In November 2020, my maternal grandmother died due to organ failure. In Chinese culture, even though my parents are divorced, my father was obligated to pitch in some money for the funeral. My dad to dip into his retirement savings plan and borrow money for the second funeral, and I used my last bit of savings to pay for our living expenses.
Losing two of the most influential women in my life was hard, but I learned a valuable lesson from it. Life insurance and critical illness coverage is not a scam and something that everyone should have. Unfortunately, my family often says life insurance is a scam because you cannot use it until you die. However, the point of life insurance is not to help build wealth or plan for retirement, unlike other investments. Instead, the purpose of life insurance is to provide your loved ones with financial support after your death, whether that be funeral expenses or death taxes. Critical illness insurance is another overlooked investment. The future can be unpredictable, and no one is ever prepared for life-altering illnesses. Critical illness insurance is crucial because most policies cover medical emergencies like heart attack, stroke, or cancer. Of course, no one on earth wants to think about what if they get sick, but I believe it is better to be safe than sorry. When I have a stable job and income, I will begin investing in life insurance because I do not want my loved ones to suffer when I am gone.
I live at home with my single father, and in March 2020 he got laid off from his two dishwasher jobs in the hotel industry. One job he is terminated from due to the pandemic, the other job’s status is uncertain. Because of my dad’s lay-off, we had to move in with a relative because we could no longer afford our rent. My father struggled to find work due to his age, but in February 2021, he got a job as a mall sanitation worker, but in August 2021, he got laid off and once again unemployed.
Luckily, we never went hungry because my father is smart with his money and had a significant rainy day fund. Since I was a child, my dad taught me how to budget and save. In my household, we follow the 50/30/20 rule, 50% to needs, 30% to saving/investing, and 20% to wants. My dad lives by one rule when it comes to wants, “if you can’t afford it three times, you can’t afford it.” This motto from my father is so powerful, and I try my best to follow it. Due to the pandemic, I have been extra strict on myself when it comes to saving because I never want to be in a situation where my loved ones or I could go hungry. I have my dad to thank for this good habit.
The pandemic has ingrained into me the value of life insurance, having a rainy day fund, and budgeting. If I win this scholarship, I will help my father pay bills as much as possible and save whatever amount I can. My father works incredibly hard to support the two of us. This is why I owe it to him to succeed in school, get a well-paying job, be prepared for times of financial instability, and give back the love and support he has given me.
