Money Advice for Millennials in the Coronavirus Recession

Let’s roll back the clock to late 2001 and 2002. I was gearing up to graduate from college in that period and the economy was in the midst of a serious recession. Jobs were scarce, and I was lucky enough to lean on a couple of wonderful mentors who helped me find good work during those times.

What about the next recession, in 2008 and 2009? I was transitioning to a new career as a freelance writer and, well, the road was bumpy to say the least. I was a new homeowner in a starter home, had two very young kids and the financial realities of life in a recession really hit home for me.

Here in 2020, we’re going through the third major recession of my adult life, and when I look back at what I went through in 2002 and in 2008, I can immediately see a lot of parallels with what millennials are struggling with now. The youngest of the millennials are roughly where I was at during the 2002 recession, and a lot of people in that generation are in a situation like what I was facing in 2008 and 2009.

Having lived through this, what lessons really mattered? What actual useful advice would I give myself if I could go back and talk to my 2002 self? What about my 2008 self? What real, practical advice do I have for people who are going through the first major recession of their adult lives?

Here’s the best advice I have, and I hope it helps. As always, treat the advice given here as a buffet. Choose the items that are really relevant to your particular life circumstances and work to apply them, while leaving the other advice alone. We’re all in different circumstances, so just find the pieces that really work best for where you’re at.

1. Don’t drop the frugality you learned during stay-at-home orders.

I was very lucky in that the two recessions in my lifetime followed directly in the footsteps of periods in my life where I had been incredibly frugal. In 2002, when I was leaving college, I had been incredibly frugal in order to make ends meet as a college student. In 2008, my wife and I had just been through a major financial turnaround which required us to develop some frugal habits.

In both situations, the frugal habits I had built up just before the recession paid incredible dividends during the recession. I knew how to live lean, and I was able to really lean on the valuable strategies I’d learned to keep living lean during years of economic uncertainty. I didn’t know where my career was going, but I did know how to keep my spending in check and build some emergency savings.

For almost everyone, the coronavirus shutdowns made us learn how to be more frugal. We had to make a lot of meals at home when we might have otherwise gone out. We had to learn to entertain ourselves without going out on the town. We had to master socializing without social hangouts.

Those skills remain valuable. Keep using them. Add more strategies to the mix, too, like buying most things in store brand form and buying frequently used nonperishables in bulk and making your living space more energy efficient. This doesn’t mean you have to just stay at home all the time. What it does mean is that the more effective frugal strategies should remain with you, always, because they will always make your financial life stronger.

2. Adopt (and stick to) a philosophy of living, not buying.

In my experience, many millennials already have this approach to life, thankfully, but many do not.

The point is this: life is best lived by doing and experiencing things, along with the recognition that there is an infinite palette of free and very low-cost experiences to be had.

For example, I think it’s a powerful experience to occasionally watch a film that brings you to tears. Schindler’s List and Field of Dreams both do that for me, for very different reasons (Schindler’s List is a societal tragic ache, whereas Field of Dreams is a familial ache). The thing is, there are so many powerful films out there that you can watch for free or for a negligible price; you don’t have to go to a full-priced movie theater to enjoy them.

It’s a powerful experience to be in a new place and immerse yourself in it, but there are many places and communities not far from me that I’ve never experienced. Travel’s great, but why not explore those communities and places without sacrificing my financial future?

Live as much as you can without emptying your wallet. Look for the multitudes of things around you that you can experience and enjoy at negligible expense. Don’t fill your house with stuff, and don’t constantly spend money on novel experiences when there are so many free and almost-free ones. Explore the richness and depth of what your community has to offer, and the communities around you. Explore the arts. Explore ideas. Meet lots of interesting people. None of those things involve buying lots of things, paying expensive cover charges, buying expensive tickets or anything like that.

This is an incredible creed to live by. I didn’t really fully discover this until the end of my 20s, but if I have a single regret about my twenties, it’s that I didn’t discover that creed sooner. Although The Simple Dollar probably wouldn’t exist, that experience would have saved me a ton of money.

3. Learn how to do as many things as possible for yourself.

By this, I mean literally every possible life skill. You should be making as many meals from scratch as you can. You should be fixing plumbing problems — yes, even if you rent, because if you fix it yourself you gain knowledge and it’s fixed quickly, and if you screw it up you can still call the landlord. You should be making your own coffee at home. You should be doing your own taxes. I can go on and on and on like this, but the thing is whenever you call someone or pay someone to do something for you, you should be trying to do it yourself.

There are several reasons for this.

First, the more things you can do for yourself, the less reliant you are on services. Let’s say we have a large second wave of coronavirus in a few months, another pandemic strikes or something else happens where you don’t have access to services. The more skills you have, the less your daily life is impacted.

Second, the less reliant you are on services, the less expensive daily life becomes. It’s far cheaper to change your own oil. It’s far cheaper to make your own coffee. It’s far cheaper to make your own meals from scratch.

Third, learning to do new things is a way to master the practice of self-learning. I’ll get back to this later, but suffice it to say that the ability to figure out how to do something new on your own without a hands-on instructor is invaluable.

Finally, having tons of skills in your repertoire helps out again and again throughout life in unexpected ways. Knowing how to fix a broken toilet can save a friend in a pinch and cement that relationship. Knowing how to fix a messed-up cake can one day help you salvage a potentially disastrous office event, winning you kudos from coworkers. Knowing how to fix a flat tire might make you a hero to your boss someday. I’ve actually witnessed each of those things.

Do everything you can for yourself, and only call on help if there’s a real reason for it — you’re in over your head or you’re in a desperate time pinch.

If you are overwhelmed by student loans or rent or other bills, talk to the lender first.

If you find yourself in a tough financial spot in which you’re unable to pay a bill, contact the person you owe the money to as soon as possible. Don’t wait until it’s late. Don’t wait for a month or two out of a hope that things will get better. Be proactive now.

Here’s the truth: the person or business on the other side of that equation — your landlord, the credit card company, whoever — would prefer not to have to evict you,` repossess from you or take your debt to collections. All of those things have a significant cost. If they have something to repossess, it almost always has reduced value, and there’s cost in repossessing and reselling it. If they don’t have something to repossess, they end up losing a great deal of money shipping the debt off to collections. They would much rather work with you in a reasonable fashion. This is particularly true if you are being proactive about your difficulties, bringing the matter to their attention before you start running behind on your bills because that gives a strong indication that you’re taking this seriously.

What about for you? The faster you contact someone that you won’t be able to pay right away, the less impact it’s likely to have on your credit, the less the additional interest and fees will be for you, the more time they’ll give you to get things right, and the more likely it is that you’ll be able to work out a deferment or some better payment plan that serves your needs better. Again, the faster you contact them, the more they will understand that you are taking this seriously, and the more flexible they will be in working with you.

This doesn’t mean you should be in this situation. You want to avoid nonpayment if possible because the difficulties that poor credit can cause can sometimes be far-reaching, there’s a risk of repossession which would leave you with nothing (provided there’s something to repossess), plus there’s the issue of creditors hounding you. It’s not good to get into a situation where you’re behind on payments. However, if you’re already going down that road, be proactive and communicate your difficulty. Call up your lender or your landlord as soon as the problem is clear and talk openly about it.

If things are stable for you right now, building an emergency fund is your most effective strategy for keeping it that way.

If you happen to be in a stable financial position at the moment, with stable income, this is an absolutely perfect moment to start building a cash emergency fund if you don’t have one.

An emergency fund is exactly what it sounds like: a pool of cash you have stowed away somewhere to help you out in the event of an emergency. It can cover a car repair if your car breaks down. It can give you living expenses during a job loss. It can help with all kinds of emergencies.

In a recession, obviously, the risk of job loss is higher than it is during stronger economic times, thus an emergency fund becomes more valuable than before. It’s also harder to find work. Similarly, the impact of multiple emergencies happening at once becomes more likely and more impactful.

It is a great idea to have an emergency fund no matter what the economic situation, but it’s paramount during a recession.

So, how do you build one? Most people don’t just have a bunch of cash floating in their checking account.

An emergency fund is built on top of spending a little less than you earn and putting aside the rest. The most effective way to do it is to open a savings account at a local bank — one that you can physically access if needed, but different than your primary one — and set up a small weekly automatic transfer from your main checking account to that new savings account. If you can, stock the emergency fund with some extra cash right at the start to get it going. Then, just sit on it and forget about it until an emergency fund.

The cash will trickle from your checking to your savings over time, building it up surprisingly well. If you set up a transfer of $20 a week, you’ll add more than $1,000 to emergency savings in a year. If you make it $40 a week, you’ll add more than $2,000 per year.

Here’s the thing: when you set up this kind of automatic transfer, it doesn’t take away from your meaningful spending. Rather, what you’ll find is that it replaces the most forgettable spending in your life. It’s not the cool stuff or the memorable stuff that goes away; rather, it’s the item bought at the convenience store without a second thought or the coffee bought at a kiosk or the impulse Amazon buy that you already forgot about by the time it arrives.

Start an emergency fund as soon as possible if you don’t have one. If you do, make contributions to it automatic, small, and frequent. If you already do that, consider bumping up those contributions a little.

Coronavirus showed us that some skills are more valuable than we thought, so really emphasize those skills.

I know a lot of people in a wide variety of fields, from scientific research to technology, from factory work to engineering, from technical writing to graphic design. I’ve talked to many, many people about what has changed in their careers and businesses since COVID-19 and the one thing I’ve heard, again and again, is they have a new appreciation for the value of certain skills.

What skills? In a nutshell, the set of skills that allows a person to work independently and build structures around themselves that keep them productive.

The ability to work independently and produce work without someone looking over your shoulder and provide structure is more valuable now than it ever has been, and it is going to continue to be extremely valuable going forward as all kinds of businesses rethink how they work.

The ability to focus. The ability to manage one’s time. The ability to manage one’s schedule. The ability to manage the key information they need to know to work. The ability to self-learn. The ability to work in all kinds of environments.

Those skills came straight to the forefront during coronavirus, and businesses everywhere relied heavily on the people that had those skills.

What does that mean for you? Work on building those skills for yourself. Likely, you’ve had to build some of them in the past few months, but keep building them.

Work on your ability to focus on the task at hand in any environment. For me, this means intentionally thinking about what I need to be doing as I’m killing lots of distractions around me. I turn off as many distractions as I can and consciously think about what I need to fill the next few hours with.

Work on your ability to keep track of tasks and manage your own small projects with minimal oversight. Think about what you need to get done, what steps need to get done to get there, and write it all out (if you need to — I still do sometimes, and I’ve been working pretty much independently for more than a decade). If you’re unsure, have someone check it over, but then follow that plan you defined for yourself. The more you practice this, the stronger you become at it.

Work on migrating the things you need to know and remember to external trusted systems. Start keeping a calendar somewhere and just commit to putting all appointments there. Start keeping some ongoing to-do lists and just commit to putting everything you need to do there.

Work on your ability to self-learn. Spend time learning new skills and practices and knowledge related to your career path, even if you don’t strictly need to do so now. If you don’t have anything relevant, just try learning something about an area you think you might work in someday. I mean, really learn it. Read a challenging book in the area, or take an online class. Read slowly, take notes, look up words you don’t know, and translate the ideas you’re picking up into your own words. Find places online or off where you can have conversations about that stuff.

These skills are more valuable than ever before. You will simply be more valuable in your career path if you have them, and they are things you can build on your own.

This is a mixed bag of advice, but it all points to the same goal.

These strategies might seem all over the place, and they should. They draw on different areas of life, different life situations, and different individual problems. Almost everyone should be able to pull a few things from this list, but few will find value in everything, and that’s the point.

The thing to remember is what they all have in common. They’re all about reducing the impact of a financial crisis in your life. Whether it comes from a job loss or an unexpected illness or your car breaking down or a career that suddenly seems to be going nowhere, life can deal us a tough hand at almost any time, and it’s never more true than in a recession. These strategies are all about preparing yourself so that no matter what you’re dealt, the downside of it isn’t nearly as bad as it could be, while also setting the stage for many better things to come.

Good luck.

Trent Hamm

Founder & Columnist

Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

Reviewed by

  • Courtney Mihocik
    Courtney Mihocik
    Loans Editor

    Courtney Mihocik is an editor at The Simple Dollar who specializes in personal loans, student loans, auto loans, and debt consolidation loans. She is a former writer and contributing editor to,, and elsewhere.