I recently sat down to look at my budget for June. Usually, this is a pretty quick process. I click one button and voilà, my budget is cloned from one month to the next. A few tweaks regarding varying expenses coming up for this month and I am done. (I use EveryDollar as my budgeting tool.)
This month’s budget process was anything but quick. I think we can all agree that a global pandemic has disrupted every aspect of our lives — our budgets included. I found myself questioning every category. I am so uncertain about the time ahead. My husband and I are fortunate to still have our full-time jobs (he is an engineering tech; I work for a non-profit). Our shift to mostly working from home has caused quite a few changes to our budget — decreased gas expenses and increased food expenses, to name a few. We also decided to pause our intense debt snowball and throw more money into savings because job security can never be too secure in times like these!
However, as things start to return to semi-normalcy, our expenses are only getting harder to estimate. My usually well-kept budget is wrecked, my friends. WRECKED.
Do I budget more for gas this month as I return to work but my husband continues to stay home? What about gas prices in general? They’ve been super low so gotta think about that… Okay. So more gas funds for June than in May, but still not rock bottom amounts like April’s amount…
Alright next: Food. Okay, okay, got this. More funds into this category and plop a little extra on there for increased meat prices. (The sticker shock! Who needs meat, anyway?)
Next up we have…dates. Oh man, are we going to go out anywhere? Do I even put anything in here? Maybe just $25 for a date night in…
You get the picture. There are so many more questions to be asking yourself and educated guesses to make as the stay-at-home orders subside and the world transitions to new routines.
For some, you may need to focus on the income side of the budget as well. If you lost your income due to COVID-19, are you receiving unemployment? How many payments will you receive this month? Are you owed any retroactive pay?
If still employed, are your hours resuming as normal? Any decreases in wages? If you were deemed a “non-essential” worker, like food servers or hairstylists, can you expect the same quantity of customers as before the shutdown?
What do you do when there are so many unknowns on BOTH sides of the budget?
First, take a breath. You’ve got this, and this craziness is only temporary. You’ll be back to easy peasy budgeting in no time.
Second, let’s take it one step at a time and just strip everything down to the basics. Start with a simple priority list. When everything is uncertain, start with the highest priority bills. Dave Ramsey likes to call these your “Four Walls.” These are shelter, food, utilities, transportation. These are your absolute “bare basics,” and usually ones that have high consequences if you default. Those consequences may be foreclosure/eviction, utility shut-offs, car repossessions, etc. We then want to build a “Priority Budget” out of this list.
Priority Budget Steps:
- Estimate your income for the month. (Don’t forget any public benefits — unemployment, SNAP, etc.)
- Subtract your highest priority bills from your estimated income.
- If you have money left over, prioritize the next important items on your budget. (Usually, debt payments, insurance, or — if your job or school makes it more of a necessity — cell phone and internet bills.)
- Repeat step two until you run out of income.
If you run out of money and still have bills to pay, be sure to have clear and open communication with your creditors about any financial hardship you are experiencing. Several utility companies and credit agencies have offered extended payment plans, deferred payment days, and account credits. During this time, many creditors understand that you may be struggling and are willing to work with you; just give them a call and explore your options. Check out our COVID-19 Resources tab to learn more about what’s available.
If you prioritize all of your expenses and you have a little money left over, go back and make some tweaks. Consider:
- adding some padding into your “bare basics” categories — give yourself some grace in your spending.
- adding in a few wants, like eating out, beauty-related expenses, etc.
- paying more than the minimum on debt.
- bumping up your savings.
That’s it! You just took an overwhelming task, broke it down, and conquered it! What adjustments have you made to your budgeting during the COVID-19 pandemic? Tell us in the comments.