Lauren Cobello » Budgeting » How to Focus on Your Finances in a Pandemic-Changed World
Think back to January 2020: a time when sweatpants were reserved for couch time, when couch time was reserved for evening hours, and when toilet paper abounded in your go-to grocery store. Joking aside, COVID-19 has likely changed everything from your daily routine to your shopping habits. These shifts may have thrown your budget– and your finances– into a bit of chaos. In this article, I’ll share some tips for how to focus on your finances in a pandemic-changed world.
I’m looking at you, “essential workers.” And those of you who work in industries like entertainment and hospitality. Not to mention healthcare workers. If you’ve been lucky enough to retain your job at full pay through this pandemic, chances are you are burnt out at best, and at worst, that your health has suffered.
Focusing on big financial goals like your debt snowball may have understandably taken a backseat over the last year. In my social circle, priorities like supervising a fourth grader’s online education and restocking the household cache of Clorox wipes have become paramount. But when I say this is the perfect time to refocus on your finances, I mean it.
The post-pandemic world looks different in many ways, and as we continue our recovery as a society, we’ll develop a clearer picture of the path forward. For now, know that assessing your current financial picture is an excellent start to regaining a sense of control over your life. Focusing back on your finances is one thing you can control right now.
If you’re anything like me, you’ve emptied your emergency savings account more than once over the last year. In addition to life’s more common speed bumps (a medical bill here, a car repair there), we’ve had to do things like up our home internet speeds and build a whole wardrobe of masks to wear when we leave the house.
But as I said, you are at the perfect turning point to restore some order to your finances. I’m not a fan of the term “new normal,” but at least the curveballs are a little more expected than they were at this time last year.
If your savings account is empty and you’re looking to get back on track, have a look at my go-to tips for saving $1,000 fast. This is sure to gain you some momentum and confidence.
A global pandemic has changed the world of commerce on all fronts. Many people have lost their jobs due to COVID-19, and you very well may be one of them. Perhaps you’ve been floating your living expenses on credit cards, or maybe you’ve moved in with your family to save money. Let me stress: there is no shame in this. You’ve done what you’ve needed to do to get through an impossible situation. What’s important to focus on are the steps you’ll take next.
With rumblings of a third stimulus payment coming from Capitol Hill, now is the time to consider what you might do with an extra $1,400 in your bank account. While I advise against relying on this cushion (Congress can shake things up at any time), strategize now about where this windfall could make the most significant impact. There’s a reason government is infusing cash into the economy; they recognize the extra financial stress Americans like you, and I have been under since the pandemic began. (A full wardrobe of masks is not cheap. Don’t even get me started on the cost of KN-95s!)
First, consider restoring your emergency savings. The best way of avoiding your credit cards is to have emergency cash on hand when something crops up. In my Flip Your Debt course, I go into more detail about setting yourself up for success in lining up bank accounts. The pandemic has likely changed your income and outflow habits; it’s time to focus on your finances differently.
Did you take out a personal loan or payday loan to make it through the last twelve months? I totally get it– maybe there was no other option available to you. But now could be the time to pay that money back, or at least make a dent in it. Consider directing any stimulus funds toward your highest-interest debt first. If the pandemic has wreaked havoc on your budget, use your stimulus check as leverage to focus back on your finances in a pandemic-changed world.
Okay, this is admittedly one of my weaknesses. After a year of hard work (and let’s face it, 2020 was hard), it can be easy to view your tax return as a little reward for all that you’ve done. If you’re used to a new handbag or a Sephora splurge when your tax return hits, think about handling things differently in 2021.
Times like these have put us all under excessive stress, and maybe it’s time to move on that pair of earrings you’ve been eyeing since July. Has your work-from-home setup been lacking an actual desk? Consider throwing a little money at a more sustainable setup if you continue working hours from your dining room or couch.
All of that said, it’s so enticing to think of your tax return as a bonus. If your emergency fund has taken a hit, though, consider restoring it before treating yourself to anything else. If trying that new mascara at $25 will scratch that #treatyoself itch, I say go for it. But earmark the rest of your return for anything that will ease your burden most. Your emergency fund or low-hanging fruit (debt with balances of lower than $1,000) should be the top priority.
At my house, trips to restaurants have plummeted. But on a weary night, Postmates is a dangerously easy tap-tap away. We don’t see movies in the theater, but we pay a premium from time to time for the latest streaming releases. And when it comes to leaving the house, we’re more inclined to hike outside than visit an escape room.
The pandemic has radically re-shaped how we spend our free time, and it has also changed how much energy I’m able to focus on my finances in a changing world. My lifestyle looks and feels entirely different. What does that mean for my wallet? Plenty of things: some good, and some not-so-great.
Especially if you have been housebound since last spring, sit down and weigh out your current monthly expenses for streaming services alone. What may have started as Netflix (whose pricing has quietly gone up over the last year) may have expanded to include Hulu, Disney Plus, Spotify, and other paid apps.
One consideration for focusing on your finances in a pandemic-changed world is to evaluate which services you are actually using in a given month. If you’re bingeing Bridgerton (Netflix), consider a break from Hulu’s monthly cost. If your family can’t get enough of The Mandalorian (Disney+), weigh out the idea of suspending other services for a while.
Quarantine made us all a bit click-happy with streaming entertainment, but such a load isn’t sustainable– or financially smart. Pick the two or three apps garnering the most use in your home, and cut the cord on everything else each month. You can shuffle the cards as often as you’d like, and often, services will try to lure you back with free trials to places to Hulu or Fubu.
I’ve always been a fan of Sling TV, but while we’re at it, when is the last time you tried negotiating your cable bill? Being open, flexible, and keenly aware of your cable and app-related costs is an impactful way of keeping track of where your dollars go each month. Auto-draft billing can be a quiet siphon for your hard-earned dollars if you check out from your budget for even a week.
When you’re exhausted and on your way home from a long workday, the “before times” might have called for some takeout or simple pizza delivery. The pandemic may have changed how we order food and where we eat it, but the demand for prepared meals remains high.
Looking honestly at your expenses can be uncomfortable, but I promise the process is worth it. Let’s be honest: if your pre-pandemic grocery budget was $600 per month, and your eating out budget $200 per month, these categories have likely ebbed and flowed over the last year.
We’ve all hit the brick wall on home-cooked meals at some point, but be honest with yourself. If you’re dropping $50 a night on Door Dash, it may be time to pivot and change up your routine. I’m a big fan of my slow cooker, and preparing for your week in advance can help fight the fatigued decision-making that leads to expensive meal deliveries.
One other thing: we’ve all encountered a strangely apocalyptic grocery store situation at some point over the last year. You know what I mean: the aisle completely emptied of bread, the dairy section out of milk and all its alternatives. I won’t even start on paper and cleaning products. Be willing to get creative. Does your city or town have an ethnic market you can explore? Can you shop from your own pantry and freezer? Even when panicked shoppers have cleared out your regular grocery, thinking creatively can tie you over and save you $$$.
Let me guess: in 2020, you saw your utility bills rise, and your weekly gas station visits drop. For many families, this upheaved the budget in unexpected ways.
Just as with meal delivery versus grocery costs, be aware that you may need to shift budget categories around to meet realistic cost categories. If your natural gas bill is higher from staying home, I’ll bet your bill at the pump is quite a bit lower due to fewer round-trip commutes.
Often the most challenging part of reallocating our budgets is facing the significant changes that have taken place. This is when it can be beneficial to face your banking statements and get a clear vision of what you’re really spending each month. Don’t be afraid to move funds from one budget category to another (and back again the next month) to reflect actual costs incurred. Your post-pandemic budget will likely have shifted around– and that’s okay. Just be sure to get comfortable with remaining flexible.
It can be emotionally draining to see your emergency fund hit zero multiple times a year. I won’t even get started on the feeling of seeing your stimulus check hit your bank account and vaporizing on the same day. But if you can get honest with yourself and look your expenses in the face, you can get back on track. There are likely a million things competing for your attention right now, but if you spend a couple of hours focusing on your finances and getting honest with yourself, I promise the overwhelm will shrink.
The art of the side hustle may look different now more than ever, but I promise you there’s money to be made– especially when it comes to food delivery services. If you can free up a couple of hours during prime dinner time, many customers are tipping generously if you’re simply willing to courier their meals. And this is a great way to generate a couple of hundred bucks a week to stay motivated and paying down your debt.
If you’ve lost your job or are at home with virtually-schooling kids, you can bet I’ve researched some options you can pursue from home. There are reasons to feel hopeful because even if you’ve taken some knocks over the last year, you still have options.
I’ve said it before and, I’ll say it again: shame is your biggest enemy when it comes to resolving money troubles. Maybe you’ve been squirreling away your bank statements since the pandemic began, thinking that since everything is sideways, you might as well not even look.
But when you sit down to look, you can develop a plan of action. Knowing the damage is both the scariest moment and the one in which you get your power back. Be honest with yourself and your family about how the pandemic has reshaped your household budget. Doing so will give you your power back when it comes to focusing on your finances in a pandemic-changed world.