The Coronavirus (Covid-19) had been circulating for a few weeks but in isolated areas and cases back in early March. There was a cluster in Westchester but very few cases identified in NYC. Then around the second week of March, I slowly started to realize that we would be sent to work from home imminently. Initially, I thought it would be only a couple of weeks, but as those couple of weeks has turned into a couple of months it became very apparent that this is a new reality we are all living in. We are in uncertain times.
One of the things I have been thinking a lot during this time is about preparing a leaner budget such that in the event that my job is affected, I can survive using my emergency fund. Some companies have promised no layoffs but others find themselves on shaky ground. How long can companies sustain their promises for no cuts if this continues longer than anyone thought?
An emergency fund is some amount of savings that you set aside for just that – emergencies – and it should be able to cover your expenses if you lose your income for any reason. Other kinds of emergencies can also come up at any time, house repairs, unexpected car maintenance, or medical expenses. Emergency funds can take time to build but they are important. If you are just starting out – start small.
Try to save at least 1 month of your expenses. When coming up with what that number should be – pare down any unnecessary spending. Will you really need all those subscription services if you lose your income? If you do not have to commute to work – do you need that car payment? You will probably be eating all your meals at home which will also save you some money. Normal spending when you are working might include a coffee in the morning, an occasional breakfast, lunch with coworkers. All of these will no longer be needed. Count up all your must have expenses – rent, utilities, medical, groceries and cut out the nice to haves. What number are you left with? Ideally, you should shoot to have 6 times this amount, or 6 months of an emergency fund saved. The best place to keep your emergency fund is in a high interest (hard to find these days) savings account.
Here’s how my spending has changed during quarantine:
My grocery spending has gone up. I have stocked up on some household essentials that I normally would not buy all at one time such as paper towels, toilet paper which has been notoriously hard to find!, laundry detergent, body wash, etc. I did this to avoid frequent trips to the store for these items.
I am cooking more meals at home. Usually at work, I utilize apps such as MealPal or Ritual for lunch deals around my office or get a small salad from my work cafeteria. Since I am always home now, my breakfast, lunch and dinners (and happy hours!) are now at home. This requires me to have more items on hand for cooking meals. I stocked up on instant ramen and canned chickpeas but as time goes on and I get more bored, I find myself looking for new recipes to try and this requires more specific ingredients which you might not have on hand. I am still on the hunt for the all illusive – all purpose flour.
I use Mint to track my spending and even it had something to say about my new habit:
One of the trends I am seeing on instagram these days is the regrowing of scallions. Scallions are the kind of item you need for a specific dish and then forget you have in your fridge and then they go bad. For me at least. So I jumped on the bandwagon. I took my scallion stems after using them in an attempted scallion pancake recipe and put them in a mason jar with water.
Look!! They are growing!
This has been inspiring me to consider growing more herbs in my apartment. I wish I could have fresh basil or mint whenever I wanted. I always thought I couldn’t because I don’t have outdoor space. But necessity breeds creativity! It might be my next project.
Other shopping such as for clothes, or random amazon purchases have come to a halt. I no longer am looking for new clothes since I am not going anywhere, and I won’t be going to the office for some time. Additionally, the items I might buy on a whim at amazon have shipping dates that are far away and somehow that deters me from ordering things more than if they would show up at my door the next day. This made me reexamine why I was spending the way I was before in the first place. I can survive just fine without many of these additional expenses.
I stopped paying additional principal payments to my mortgage. I figure I can pay a lump sum later if everything returns to normal and feels more secure. Additionally, gas for my car cost has been extremely low as there is not any place to go.
Subscriptions Cancelled and Subscriptions Joined:
I cancelled some services that I had signed for a trial that I don’t really need such as the magazine The New Yorker. I will admit I signed up for the free trial to get the awesome tote bag it comes with.
I decided to keep my streaming services to maintain my sanity while I am home. I have Netflix, Spotify (which gives me an ad version of Hulu) and YoutubeTV.
The Peloton App has a 90 day free trial during this time. I thought it would be a good way to keep active while stuck at home.
The Calm App – through a program at work I got an offer for a full year of the Calm app for $29.99. I was never super into meditation but I find that during this time, it can help with anxiety and release of stress.
If I do end up on the chopping block at work, I feel I have made a few changes that have helped me save a bit more while I am working from home. I am also grateful that I started my emergency fund a while ago to prepare for a situation like this. It’s never too late to start. Take a look at your expenses and find some categories where you can slim down your spending. You might learn that it is not that hard and these habits can be carried forward when the world returns to normal one day.