Budgeting is already difficult enough when the stock market isn't fluctuating aggresively every other second. Amidst the continually unfolding economic tribulations due to the coronavirus pandemic, you may have to put in a little extra legwork to manage your finances than you did before. Focusing on the basic principles of distinguishing a "want" versus a "need" will still help you budget, but if you need a little extra help or if you are looking for something productive to during self-isolation (How many days has it been again? Ugh.) here are some tips and tricks for budgeting during an economic crisis.
1. Create A Spreadsheet To Keep Things Tidy
Spring cleaning doesn't just apply to vacuuming the floors and donating your old clothes. The most important step in budgeting is to create a place where you can track your spending and reflect on the monetary goals you have for this fiscal year and beyond. I recommend creating a spreadsheet in Excel, Google, or Airtable. While such a task may stir up some triggering memories from high school financial literacy courses, there are few basic shortcuts that will make setting up your first spreadsheet less frustrating. Or, if the idea of using a spreadsheet feels like too much for you, you could always try out some popular budgeting apps such as Minted. These apps may not be as accurate at tracking your own expenses directly, but they definitely make the process a whole lot easier.
Focusing on the basic principles of distinguishing a "want" versus a "need" will still help you budget.
Ultimately, you just need a space (whether online or in a journal) to spell out various categories like rent, food, transportation, bills, taxes, etc. Color coding, clear labeling, and additional detailed formatting can make the document more approachable when you go back to update your spending later. Even if it all seems like a lot to set up now, once you have it ready to go you'll be able to update your information easily and save yourself the trouble of worrying about your finances once and for all.
2. Clarify Your Income And Necessary Expenses
Since the end of April over 26 million Americans have lost their jobs and filed for unemployment. If you have been laid off, the first step is to file for unemployment right away and look into other financial support systems you may be eligible for. You can also use the US government's stimulus check to pay for necessary items and build for emergency savings.
If you are fortunate enough to be able to maintain a work-at-home gig (or be furloughed instead of laid-off), it is still important to be money conscious during a crisis such as this, and take little steps to save for the future. Once you are able to determine your monthly income, you can outline your absolutely necessary expenses so then you can easily review the amount of money you have leftover for savings and incidentals… and maybe a new #WFH outfit, too!
3. Reflect On Where You Can Cut Back
Your first instinct may be to invest in a butt mask like Kesha (yes, that is actually a thing) be careful where you put your money. Due to self-isolation and other restrictions, there are some more luxurious expenses, for example a gym membership or overpriced oat milk lattes, which are no longer relevant. Take some time to think about what you "need" (necessary expenses mentioned above) and what you "want" (a butt mask like Kesha). Making this list may actually be easier now than it was at the beginning of the year: with no more nights out or in-person meetings for work, you may find that you're suddenly spending a whole lot less than usual.
Ultimately, you just need a space (whether online or in a journal) to spell out various categories like rent, food, transportation, bills, taxes, etc.
While entertainment can be essential while we quarantine at home, it is worth cutting back on some streaming platforms, limiting data use, and trying your best to refrain from buying a Nintendo Switch to play Animal Crossing. Similarly, budget your grocery list by planning out weekly meals, buying non-perishable goods with a longer shelf life, and using up items you forgot you even had in your pantry. Your "noodle budget" should only include what you absolutely need to maintain your health.
4. Prioritize, Prioritize, Prioritize
Even with a clear differentiation between needs and wants, it may be worth prioritizing those needs even further. This may seem like a scary concept at first, but it's something you need to consider. If you find yourself doing all these calculations and finding that the amount you need versus the amount you are bringing in isn't evening out, it may be time to take some drastic measures. It is worth considering reaching out to your landlord and utility companies who, given the emergency, may have extended payment periods.
Your first instinct may be to invest in a butt mask like Kesha (yes, that is actually a thing) be careful where you put your money.
While putting a part of your monthly paycheck into your 401K or retirement plan, and lowering any debt, may have seemed like a necessary expense in February, put these on the back burner for a moment and focus on building an emergency fund for the current situation. Pay what is due and buy what is vital for your health.
5. Ask for Help
I am not implying you need to go to your family or friends to ask for a loan, but it is important to remember that you are not alone during this emergency. Reach out to your employer, mentors, and friends and ask for more information about how to protect and budget your money, or simply ask what they are doing to save. We all want to maintain the mask that we are confident and in control all the time, but humanity — and financial confusion let's be honest — is what binds us together.
So stop scrolling (after you finish this article of course) and go make that spreadsheet!
WRITTEN BYElizabeth Berry