She Strengthens

Navigating Financial Uncertainty: My Pandemic Budgeting Journey

For years, I struggled to balance aggressive debt repayment plans with enjoying life. After paying off my student loans, I replaced those payments with car loans and other consumer debt. The cycle continued until I shifted my focus to saving money, preparing for a career change and potential financial uncertainties.

The Pandemic’s Unexpected Challenges

When the pandemic hit, my world was turned upside down. Schools and daycares closed, and I had to figure out childcare for my two sons. The job market crashed, and my husband took a 50% pay cut. I was fortunate to keep my job and work remotely, but our reduced household income forced me to reassess our finances.

Rebuilding My Budget

I took four crucial steps to set up a budget that helped me navigate the pandemic:

1. Calculate Fixed Costs

I identified essential expenses like housing, debt payments, insurance costs, and food. I excluded accelerated payments and focused on minimum requirements.

2. Calculate Variable Costs

I listed expenses that could be reduced or eliminated, such as entertainment and travel. I used zero-based budgeting to ensure every paycheck had a zero balance.

3. Emergency Savings

I calculated my insurance deductibles and set a target for emergency savings. I have two $500 payments for my vehicles and $1000 for my home, totaling $2000.

4. Extra Savings

I allocated any remaining funds to my “Extra Savings” account, which became my “Pandemic Survival” pot. This allowed me to calculate how long my savings would sustain us during uncertain times.

The Power of Tracking

By tracking my expenses, I was able to increase my net worth by $15,000, a significant improvement from previous years. The key to my financial success lies in avoiding new debt and making steady progress towards paying off existing debts. It may take longer than expected, but I’m confident I’ll eventually achieve financial freedom.