How the Coronavirus Pandemic Has Impacted Our Budget

by Matt Spillar · June 17, 2020

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walking

With all that has been going on with the coronavirus, most of us have been sheltered in place since early March. Here in California, retail stores and restaurants are finally starting to open back up with precautions still being taken. It will still be quite awhile until life feels normal again, and we’re still largely isolated from our friends. I’ve previously talked about the emotional side of this pandemic and the lessons I’m trying to take from this time. Now it’s time to look at the financial side, how has the coronavirus impacted our budget?

Employment and cutting back to the essentials

Thankfully, both my wife and I continue to work at our same full-time jobs we’ve had for the past few years, which is something we’re not taking for granted. With minor league baseball currently looking like it’ll be cancelled, my side hustle income was reduced to zero. Unfortunately, the coronavirus pandemic has resulted in millions of Americans losing their jobs. Unemployment is on the rise and many people are experiencing financial hardship.

I was laid off in March 2017, and it was emotionally taxing. One day I had full-time employment, and the next day I had no idea where I was going to end up. If you’ve recently lost your job and fallen on hard times, please know that you’re not alone and it’s not your fault. This virus has had a devastating effect on a number of industries, and the uncertainty it has brought makes it difficult to know what the future will look like. Check out my post about my experience losing my job for some steps I took towards finding my next opportunity.

If your income has been reduced one of the first steps to take is to cut back to your baseline expenses, also called a “bare bones” budget. The concept is simple, it’s the most stripped down version of your monthly expenses as possible. This means you’re cutting out anything non-essential. You can also negotiate or change providers for monthly bills such as car insurance and cell phone.

Analyzing our monthly expenses

With all this time sheltering in place, it stands to reason that some expenses categories would go down (entertainment, travel), while others might increase (groceries). We use Mint.com for our monthly budget, which made compiling these numbers straight forward. It’s no exaggeration to say that tracking our spending through Mint has been life changing for us. I spend a few minutes each day to ensure all our expenses are categorized properly and making sure we’re aware of where our money is being spent. If you’re interested in commentary about our full 2019 spending, check out this post.

Let’s take a closer look at how our expenses have changed in each category, compared with last year in the months of March, April, and May. The first percentage indicates how much of our total spending that particular category accounted for, and the percentage in parentheses indicates the change when compared with last year’s spending.

Home 52% (+4%) – (includes rent, renter’s insurance, water, trash/sewage)
Auto & Transport 8% (-2.5%) – (gas, car insurance, maintenance/repairs)
Shopping 3% (-65%) – (this covers home supplies, clothing)
Pets 1% (-90%) – (pet supplies, veterinary visits, dog-sitting)
Food & Dining 8% (+20%) – (groceries and restaurants)
Giving 17% (+36%) – (church tithing and other charitable giving)
Travel 2% (-91%) – (includes airline tickets, accommodations, sights, food)
Bills/Utilities/Misc/Other 10% (+56%) (electric bill, cell phone, Internet, entertainment, health, laundry, other smaller expenses that don’t fit in other categories)

In total, our spending from March-May decreased by 14% from 2019. The categories with the biggest drops included Travel, Pets, and Shopping. Last year we took a big trip to Europe in late March, and this year we’ve obviously been unable to travel at all. The category with the biggest increase was Giving followed by Food and Dining, as we’ve been buying more groceries and ordering takeout a couple times per month to support some of our favorite restaurants. The Bills/Utilities/Misc/Other increase was largely due to some credit card annual fees coming due that we didn’t have last year, for travel rewards purposes. I’ve been working from home which has meant no commute (less gas and car insurance costs), but no office lunches (more groceries).

Lifestyle

Without the ability to travel and less entertainment options available, most of the ways we’ve been spending our time haven’t involved spending money. We’ve been cooking a lot, taking walks and going on hikes, and spending time with family. I definitely miss meeting up with friends, sports, concerts, and traveling. On the other hand, cooking new meals has been so fun that I haven’t really missed eating at restaurants or shopping.

I’m definitely looking forward to more normalcy, although it still looks like we’re a little ways away from that. I would expect our spending to trend slightly upwards in the second half of the year. Hope you all are staying safe and healthy!

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