Hello all! I’m taking a break from my usual beat to tackle a tricky topic for many of us: finances. APW has posted some truly excellent advice on how to make a budget over the years and I cannot improve on that guidance. I’m not here today to tell you how cutting your avocado toast budget will enable you to buy a house (I assume after eight weeks of staying home we can all agree that skipping avocado toast does not, in fact, give you the downpayment on a home) or to give you specific advice about how much you need in your emergency fund (honestly idk your life) or advise you about how to save for retirement (early, often, more than you think you need to).
I’m here to talk about a position I think many of us are in: reassessing your finances in light of Covid-19. It has had and will continue to have an impact on nearly all of our personal finances, whether because of job loss or furlough, reduced hours, reduced salary, or simply a change in priorities because of uncertainty about how the next year will go.
This isn’t one sized fits all advice—my hope if that if you’re worried, you’ll find even one useful tip here. Take what works for you and leave the rest. 
Step One: Stand Naked with a Fist Full of Cash
Okay, maybe not literally although it could be fun.
This is how my economics professor described net worth—if you sell all your assets and pay off all your debts, what are you left with? For our purposes today, you’ll need to start by knowing how much money you have and where that money is. (Mint can be a great tool for this. If you enter all your accounts, debts, and assets, it lets you track your net worth.) If you have someone you share finances with (or someone you’re legally bound to, sans pre-nup)—make sure you know each and every savings, checking, and investment account and how much money is in it.
Pro-tip: These days, you might want to pour a glass of wine before checking your investment account.
Step Two: Assess Your Goal
A budget is just a tool. The real work is in figuring out what you need that tool to do. Are you trying to figure out how to live on less right now? Do you have an amount of savings you want to reach? Are you trying to figure out if you can afford your current life? Take some time and really dig into what you’re trying to do, without shaming yourself for the past. You do not have time or energy to conduct a tribunal of all of your decisions. Your job is to asses what you have, and figure out where you need to go.
Step Three: Big Ticket Spending
We are all agreed that the lattes aren’t the key to massive savings, right? So let’s not start with them.
Instead, let’s start with the kind of big ticket spending that actually matters. What’s your mortgage? (Note: if you have a mortgage and have lost income due to COVID, have you looked into mortgage forbearance? Different banks are offering different plans, but you should do the leg work and figure out your options.) What’s your rent? Health insurance? Car payment? Car insurance? Parking? Student loan payment? Other debt? Go through each and every big ticket item and assess it. Are you rounding up a couple hundred dollars a month on your mortgage? Way to go you! Does it fit your goal to be doing that now? Are your student loans $1200 a month? I’m so sorry. Can you afford that now? What deferment options might you have? These are the items that have the least flexibility, but the biggest bang for your buck, so it’s worth seeing if there are any changes you can make.
Step Four: Get Your Money
This step could truthfully be part of step one, but perhaps you need a reward after slogging through Step Three.
Figure out if any money that could be called “yours” is in fact living in someone else’s bank account and go get it. Yeah, tax deadline might have been extended, but does the IRS have money that is yours? File and get your refund! Are you eligible for unemployment? File. It might take a while but you don’t get anything if you don’t try.
The rules are changing frequently now but my baseline is this: if you have less work now than you did before Covid-19, spend some time on your state Department of Labor website and figure it out. Are you paying for daycare that is closed because it seemed like a good idea in March? Yeah I get it, but can you still afford that? Did you spend $500 on very nice tickets to the ballet? Hi yes I did, and no, ABT, I am not in a place to donate that amount to you and would in fact like a refund thank you. Are you eligible for public assistance or food stamps? If so, apply. We’ve all paid into the system over the years so that the safteynet (such that it is) could be there when it’s needed. If you need it now, claim it.
Really take a long moment and figure out if there is money out there that could be yours.
Step Five: Tackle “Discretionary” Spending
Are you a person who has a super detailed budget where you track every penny you spend? (I know some of you use YNAB and some of you use mint. You can also just use a regular old excel sheet.) Whatever you use, go look at that and move it around a bit.
Or are you not tracking your budget in a super detailed way? I am not! Zero shame here! I cannot tell you how much I spend on clothes or groceries or buying old seasons of Drag Race a month, and I have no idea how much a gallon of milk costs or why Americans are obsessed with their politicians knowing this fact. My pro tip: do you put most of your expenses on a card? If so, there’s probably a tool on your bank’s website that will break down your expenses in large categories for you automatically. Compare what you spent last April to what you spent this April. Turns out I spent most of my money on the budget category of “leaving my house and doing things” and now my overall spending is down and focused on groceries. Yours might have changed in opposite ways! Maybe you’re buying a ton of food and used to just eat at work, or you’ve had to hire a nanny. Look back at your goal again and see what you can change or need to change about your spending to make it there.
Step Six: Try to Make it Not Suck
This advice will be overly Pollyannaish for some, and I don’t mean to suggest that massive changes in your finances are opportunity to appreciate a simpler life. That is nonsense and it is okay to be stressed about this. But to the extent you can spend some time identifying free or lower cost ways to do things you like to do, you’ll be more successful at sticking to a budget.
Figure out what you have in your house! Read your unread books, take baths with your accumulated collection of bath salts, use up your craft supplies, clean your pantry and cook with what you find. Have no time to do any of these things because you’re working round the clock and also “homeschooling” your children? That’s also okay! You do what you can, even if that’s just appreciating the simple pleasure of standing outside your house for ten minutes at 10pm breathing.
Step Seven: Revisit and Reassess
Don’t expect perfection from yourself. Set times to check in with your budget and your spending and your goals. Treat what has happened already as a learning opportunity. Did you decide to spend $300 on groceries for the month and then spend $1000? Okay. No sense in beating yourself up about it! Figure out why! See what you can learn from that!
Dealing with finances (especially when they aren’t looking great) can be a huge source of anxiety, guilt, and shame. But the thing that’s easier to hear from an outside source, then to try to tell yourself, is this: there is no shame in struggling to financially weather this storm. We should have a much better social safety net, so that a pandemic doesn’t mean children going hungry and adults worried they’ll never recover from this set back. You can’t foresee every possible outcome here, you just do the best you can.
But to the extent that you can, try taking small actions. It’s fine if it’s only one tiny thing at a time, and then taking a break when you have a panic attack. (Seriously: if at any point you have a panic attack, take a breather.) But slow small actions are so much better than nothing. And in 2020, that’s all we’ve got.
How are you managing your finances during this pandemic? What hardships are you facing? What fears keep you up at night? And remember, there is no suffering olympics. So consider this a safe space to share your fears (and strategies) without worrying that they’re not valid because someone else has it worse. Because it’s all valid.
