Like many across the globe, my family’s finances are a bit unstable due to the Coronvius Pandemic. I feel like going forward life will be known as Pre-Coronavirus and Post-Coronavirus, kind of like what happened after 9/11.
Pre-coronavirus, we didn’t think twice about shaking a stranger’s hand, using the ATM keypad, or going to the grocery store without donning a hazmat suit.
Post-coronavirus, sadly, I think the elbow greeting and everything else is here to stay…maybe not the hazmat suit, but possibly a face mask.
Pre-coronavirus, I considered having 3 months of expenses saved in cash to be sufficient.
Post-coronavirus, not so much!
The PA governor has shut down all non-essential businesses indefinitely and we’ve now been ordered to stay at home unless traveling to essential jobs, needed supplies, or outdoor exercise as long as we practice social distancing.
My husband and I are self-employed and our business is considered essential, but very few people are leaving their homes right now, understandably. Our business has definitely been affected with no end in sight.
Every night my first prayer is that this virus starts to mitigate, the curve flattens to a manageable level for our health care system, and lives are saved. My second prayer is that my family gets through this crisis financially.
I have written often about the importance of an emergency fund. Being self-employed, we need the security that it offers. Over the years, we’ve dipped into it for a variety of reasons, but never before have we (or anyone, really) been tested like this.
Who would have concocted a story like this when planning for an emergency? A layoff or a drop of business happened in the past, but a global economic shut down from a deadly virus? Folks did we just enter the twilight zone?!
How I’m managing our family budget during the Pandemic:
We pay ourselves at the beginning of each month, so when this crisis started in mid-March, we were covered for the month. However, reality set in on April 1st and I’m now second-guessing that we have enough money set aside, so I have set into motion some strategies to prepare for the unstable economy and any lost income ahead.
1. Stop sending an extra payment to our mortgage.
We paid off our last non-mortgage debt in September and have since sent that loan’s monthly payment to our mortgage principal. We were privileged to be able to do so for a few months but we must stop this for the unforeseeable future.
2. Stop all non-essential spending–cold turkey.
This is not an elective, fun, no-spend month like what we did in January to find funds for our summer vacation. April will be a “we might not have an income” month.
Our only spending going forward will be for essentials, such as our mortgage, utilities, groceries, our Medi-Share premium, and fuel for the cars. Fortunately, we won’t be driving much.
I’ve shared before that April is the most expensive month of the year for us because our homeowners/auto insurance and property taxes are all due, along with any federal or state taxes that we might owe. I set up a strategy years ago to pay for those yearly expenses, so thankfully, there’s money for these bills and we won’t fall behind.
Budget items we are temporarily stopping for now: EVERYTHING ELSE! This includes Christmas savings, extra mortgage payment, clothing, hobbies, anything frivolous, and sadly, contributions to charities and our retirement will also be paused. As soon as life and our business go back to normal, these things will resume, especially the last two items.
3. Make do.
There is nothing that we really need right now that we don’t have, thankfully!
In January and February, my husband and I were contemplating replacing our 12.5 year old Honda Odyssey with a new to us vehicle. The van has been awesome, especially when our kids were younger, but it needed 4 new tires and I didn’t want to replace them if we were going to get another car. Plus, I was getting antsy for a new car.
We shopped around and test drove several, but I couldn’t shake a feeling of discomfort. We didn’t have enough cash saved to buy a car without a loan and that wasn’t sitting well with me. We just finished paying off our non-mortgage debts and now we were considering taking out a car loan.
In early March before the crazy began, we decided to order the tires and stick with the van for another year or two and save up more funds to buy our next vehicle. Boy, are we glad we made that decision. No car payment = peace of mind.
Also, about the time everything shut down, my coffee machine decided to as well. Mr. Coffee didn’t want to be left out.
My first reaction was to hop on Amazon to order another machine but I stopped myself. I remembered that I have a french press (still in the box) sitting in my cupboard. I have been using it ever since. I will eventually buy a machine, but for now, my morning coffee is secure.
4. Emergency Savings = Last Resort
Our business is not shut down completely, so we have a little bit of income coming in, but we’re seeing about a 50%-60% drop and we don’t know yet how long the shut down will last. We’ll concentrate on numbers 1 – 3, so we can make our emergency savings last as long as possible. If and when we get a stimulus check, the first priority will be making sure our essentials are covered.
We’re taking life one day at a time because things are changing so rapidly. I’ve already started thinking of changes I want to make to our financial plan when our business is back to running at full capacity. We will get through this, but it won’t be unscathed.
Finances after the Pandemic:
We went through a rough time back in 2012/2013 and we wrote our Debt Freedom Plan as a result of it. I truly believe if we hadn’t created our plan and followed through with it all of these years, we’d be in a much worse situation.
1. Update our Debt Freedom Plan to reflect lessons learned during this crisis.
After paying off our last non-mortgage debt in September 2019, we updated our Debt Freedom Plan. We had such a sense of freedom after making that last payment and we let ourselves dream about some tangible goals that we sacrificed during those payoff years, such as travel and a new-to-us camper. We need to revisit that plan and make adjustments based on what we’re dealing with now.
2. Cash is King.
We have an emergency fund, but after this crisis, we will likely need to replenish it and increase the amount that we keep. A complete shut down was not on my radar and I feel like now that federal and state governments know they can shut down local communities and economies, it will be very easy for them to make this decision again. I’m not arguing whether it was right or wrong, I’m just pointing out that this will likely not be the last shut down we’ll live through.
2 – Start stockpiling food.
I shop once a week and while I have some stuff in my freezer and cupboards, I don’t have more than two week’s worth of food if we absolutely couldn’t leave our house at all. I never felt I had room to store extra food, but now I’m going to find a space somewhere in our home to start a small food storage to get us through a longer period of time.
The Positive Side of this Crisis:
Even in the midst of uncertainty, there’s a lot to be grateful for in my life.
1. More family time!
My family has eaten together almost every night during this time. My kids usually have many activities in the evenings and my husband works until about 6:30, so family dinners together usually just happened on weekends, so this has been a treat. My middle schoolers roll their eyes, I know they secretly enjoy the family time too.
2. Kids in the kitchen.
I have asked everyone in my family to prepare a meal each week. So far, my girls have made orange chicken with rice, chicken potpie, homemade pumpkin cinnamon rolls and dinner rolls. Hubby has been running errands for us, so I’ll give him a break.
3. Creative Entrepreneurship.
I’ve seen small business owners who were forced to close their doors get creative and think outside the box to try to keep their businesses afloat.
- A local yoga studio is offering online classes.
- A local salon is offering curbside pick up of their products, including a hair touch up kit for the roots that we’re all growing right now.
- A local restaurant has created meal kits for delivery and the chef hosts a Facebook Live where you can cook your meal right along with him.
4. Connecting with friends and family near and far.
I connected with some college friends via Zoom for a happy hour. We are supposed to have a girls’ weekend later in April, but that will unfortunately not happen. These ladies are my tribe and we all look forward to our yearly getaway, so Zoom for the win!
This too shall pass.
My family has been tested before, but we are resilient and scrappy. We’ll get through this crisis. The last time we were tested, my husband and I wrote our debt freedom plan. We were bogged down in business debts back in 2012/2013 and our plan changed the direction of our life and thankfully, set us up in a good position financially.
It’s hard to say what personal lessons we will learn from this crisis and I’m not sure what life will look like on the other side, but we’ll get through it…together.
So enough about me! —->> How are YOU doing? Are you working from home? Have you been laid off? Are you working in the front lines of this crisis? What changes have you made to your family’s budget? Are you going crazy confined to your home? Have you contracted the virus or know someone who has? Share in the comments!