How to Budget in the Midst of Uncertainty

How do you budget in the midst of uncertainty? It seems like budgeting is always at the forefront of homeschoolers’ minds.  The reason is that most of us are single-income families.  Because of that, we know that we need to pinch pennies where we can.  But, what happens when uncertainty visits your home? 

Disclaimer: I am not your financial advisor, please talk to your financial advisor before making any financial decisions.  This article is based on my experience as a homeschool mom.

Create a Zero-Based Budget

The first step is to actually create a zero-based budget.  A zero-based budget is exactly what it sounds like.  You take all of your expected income for the month, and you give every dollar a name.  If there is money left over after you have paid all of your bills and monthly expenses you would either put money against debts or put money in savings.

But, a budget in the midst of uncertainty is going to require you to put more of that money in savings and hold off on the debt until the uncertainty is past.

This does not mean that you stop paying your bills, or paying on your debt, but instead, pay the minimums while you build up cash in case of emergency.

What if you have more month at the end of your money?

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This is where it gets tricky.  Most often, in times of uncertainty, a budget will be hard to do.  You are unemployed, or there is an emergency on the horizon.  What then?  At that point, you are going to want to take care of, what Dave Ramsey calls, your four walls. 

1. Food – First you will want to make sure that your family is fed.  This is the most important thing.  Don’t pay your credit card bill before you get food for your family if your budget is that tight.
2. Utilities – The next priority on your list are your utilities.  Utilities are things like water and gas for your home.  Utilities are not Netflix or Hulu or Amazon Prime.
3. Home – You want to take care of your rent or mortgage next.  You need a place to live, and you cannot live indefinitely without paying your rent or mortgage.
4. Transportation – The last wall is transportation.  You need to be able to get to your job so that you can then pay your other bills.

Transportation is obviously a little spotty right now due to everyone essentially being put on lockdown in the country.  But, it is still part of our four walls.

If you can take care of those four walls, you will be in good shape.  Not perfect shape, mind you, but good shape.

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Outside of the Four Walls

If you have money after paying for your four walls, that is great.  You will want to first make sure you pay the rest of your bills.  This would include minimum payments on your debts.  And if there is still extra, then you are in a good position.  When we are thinking of a budget in times of uncertainty, this is when you will need to make the decision on what to do with the extra.  Do you put it into savings?  Do you pay down debt?

My inclination is to put it into savings.  A budget in times of uncertainty is not the same as a normal budget.  A budget in times of uncertainty means that there will be an end to that uncertainty at some point.  Because of this, we know that we will not be making this type of budget forever.  It is only temporary.

If you know that it is not going to be forever, you are able to save up that cash, and when the uncertainty is over, use it towards the debts that you wanted to pay down during the uncertainty.

Making cuts to your Budget in Times of Uncertainty

When you look at your budget, or if you are trying to cut something out when you know you need some extra cash, where do you look first?  I always look at groceries.  I don’t know why I think that I can cut out so much of my grocery budget when I have three kids and a husband that eats like he is in a constant growth spurt, but that is what I would try to do.

However, I am going to tell you that your grocery budget isn’t the first place we want to look when we are making necessary cuts.  When you budget in times of uncertainty, you may not be able to cut your food budget.  In fact, you may be spending more on groceries – especially if you can’t seem to find toilet paper very easily!

Instead, let’s look at some other expenses that can easily be cut in times of uncertainty.

• Streaming services – Yes, having a streaming service is a great idea when you are cooped up in your house all day.  However, you probably don’t need 6 of them.  Pick your favorite and put the others on hold.  Most streaming services will allow you to put them on hold for up to three months.  Then you aren’t worried about losing all of your lists, and also don’t have to worry about the money. 
• Subscription boxes – If you love to get subscription boxes, I get it.  I like subscription boxes for everything from the Target Beauty Box to boxes of toys for my dog to special activity subscription boxes for my kids.  However, if you are looking to make cuts in the short term (or if you need to get your budget on track overall) this is a great cut to make. 
• Unnecessary purchases – Part of the budget dilemma is that we do not think about the unnecessary purchases that we make frequently.  Coffee on your way to work, lunch out, a new *something* at Target.  Most likely we are not shopping out and about like normal, however, take a look at your Amazon purchases as well.  Do you really need all of those items?  Or can you hold off for a time?  In times of stress, it is easy to overspend.

A running list of needs

We moved about 10 days before the pandemic started.  In preparation for the move, I had a list of items we would need for our new home.  However, once we got to our new home, and we realized there was a run on toilet paper, we decided to hold off on some of those purchases.

It doesn’t mean that they are unnecessary purchases, but that they are unnecessary to budget in the midst of uncertainty.  Instead of making those purchases immediately, you keep a list of items that you need to buy.

Waiting to make big purchases is usually good advice regardless of the current state of your finances.  The reason being that you are able to find better deals, and perhaps find a better option than the one you happened to see at Target or on Wayfair.

This is good practice for big purchases, but also for smaller things like kids’ clothes or shoes.  Wouldn’t you know that when we couldn’t go shopping anymore was the time my son’s feet decided the current sneakers he had would no longer work? 

Keeping this running list categorized and in a place like your homemaking binder, or even in your planner, will allow you to keep track of what you need, shop for deals when you can, and not overspend in your pursuit of “things we have to get right now.”

How will a budget in the midst of uncertainty Cultivate Simplicity?

Whether you are struggling financially or not, having a budget gives you the chance to tell your money where to go, rather than the other way around.  It is very easy to spend money when you don’t have a plan.  It is even easier to do it when you are overly stressed, or finding that you can’t buy bread, or need to go to three stores before you find milk. 

A budget in times of uncertainty will help you cultivate simplicity by freeing up your mind space.  You will not have to worry about money during uncertain times because you already have a plan. Not that a lack of money isn’t stressful, but that you already have a plan of attack for when and if you need to make cuts to your budget.

When there is uncertainty, like now with the pandemic, the best course of action is to save as much money as possible.  This will help alleviate stress about money specifically, and also make it so that you know exactly what you need and when.

One Caveat

Now, obviously, if you or your spouse has lost their job, or have a medical emergency, these budget plans will not necessarily work.  Those are crisis situations, and that is a completely different ballgame.

In those types of situations, you will want to focus again on your four walls, but you may need to look for help in other places.

But, having the budget in place already gives you space to make the right decisions instead of panicking, and not knowing where you can cut, or even how much money you are spending normally.

The Bottom Line

Taking the time to sit down with your husband and review the budget plan is important.  You may need to make some decisions about what you can and should spend your money on right now in the short term.  That is being sensible, taking control of your current economic situation.

If you find that you are barely able to cover your four walls, you know that you need to either make some serious cuts (like selling your car or looking for a less expensive housing situation or even starting to make cuts to your grocery budget).  Or perhaps you can figure out smaller ways to bring in some extra cash – either by short-term jobs, or a second job.  There are options, even in uncertain times.

Putting a plan in place will help you to alleviate stress, know where your money is going, and where you may need to make some adjustments down the line.  The focus is on positivity though.  You are making this plan so that you don’t stress about it.  Once you make the plan, make a pact with your husband to stick with it.  Easier said than done of course, but I know that you can do it!

We all are facing some uncertain times right now, and I want to help encourage and support you in any way that I can.

Please let me know if you need help putting together a budget, or if you are looking for help in any other way!  You can contact me by e-mail HERE.

How do you budget in the midst of uncertainty?  Is this an area that you struggle in?