How to Budget When Everything is Up in the Air

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Dear friends,

This is Day #4 of Money Triage, a special 5-day series about dealing with financial uncertainty. These are the other topics we’ve covered this week:

Day 1 – Create a 30-Day Plan

Day 2 – Take Stock of Your Resources

Day 3 – Make Money in a Changing World

In today’s post, we’ll cover ways to create a budget when our income and expense numbers feel slippery and shifty.

Where Do We Even Begin?

Making a budget in a time of financial uncertainty when the world seems to be changing daily (and sometimes hourly) is not going to be an exact science. But if we begin with estimates and a general idea of where we’re headed, we can better plan for the future and make course corrections along the way.

Free and Paid Budgeting Software

Set up your budget on an online spreadsheet where you can move things around and make updates as things change. The free budget template in Google Sheets is a good option for creating a simple budget. To access the spreadsheet, go to your Google page and navigate to Google Sheets. Look for the ‘Monthly Budget’ or ‘Annual Budget’ spreadsheet located near the top of the screen. You’ll see instructions for customizing the spreadsheet when you open it.

I use Quicken’s paid accounting program for my personal and business finances, because it automatically tracks and categorizes my income and expenses. Two other highly-rated paid online budgeting programs include You Need a Budget (which is currently offering a 34-day free trial) and Personal Capital. (Those aren’t affiliate links, just regular ole’ links.)

By the way, if you share finances with a spouse or partner, you’ll definitely want to create your budget together so that you’re both on the same page with expectations and reality.

Budget for Income and Expenses

Once you have your spreadsheet set up, enter your projected monthly income.

Using the previous month’s expenses as a guideline, plug in the numbers you estimate for your expenses.

During this pandemic some expenses will likely be very different, at least for the short term. You may find that some of your costs decrease, such as child care and auto expenses. Just do your best to estimate, knowing that you can easily make changes as you get more information.

Your expenses might include:

  • Mortgage or Rent
  • Utilities
  • Health Insurance
  • Medical expenses
  • Transportation or Auto expenses
  • Credit card and Debt payments
  • Child care
  • Groceries
  • Restaurants
  • Personal Care
  • Clothing
  • Entertainment
  • Gifts
  • Retirement Accounts, Investments and Savings
  • Charitable Giving

Aim for a Zero-Balance Budget

Subtract your projected expenses from your income. Experts recommend assigning every dollar to a category so the difference between income and expenses is zero. If you have more income than expenses, for instance, you might allocate part to Charitable Giving and part to Savings. 

How About You?

Do you keep a regular budget? Or do you finally have the time to make one now? If you’re a seasoned budgeter, is there a software you especially like? If you have any thoughts or suggestions to add to this post, leave a comment below or over at the Money Diet Community Group.

Stay safe and well,

Signature for Eliza Cross


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