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  1. Personal Finance
  2. Saving Money

You're Probably Already Saving Money During Quarantine. Here's How to Take it a Step Further

By:
Julia Glum
Last Updated: Dec 14, 2020 | 7 min read
- Jade Schulz for Money
Jade Schulz for Money

Welcome to Dollar Scholar, a personal finance newsletter written by a 27-year-old who’s still figuring it out: me.

Every week, I talk to experts about a money question I have, whether that’s “What if I don't have a 401(k)? or “How many credit cards do I need?” As I learn, I share simple ways to improve your financial life… and post cute dog photos.

This is (part of) the 36th issue. Check it out below, then subscribe to get future editions of Dollar Scholar every Wednesday.

Here are some things I have done while in coronavirus quarantine:

Before this, my life looked a lot different. I would usually have been taking the subway at least twice a day, going to the movies on the weekend and buying Chipotle for dinner when I didn’t feel like cooking. But you’ll find none of those things on the above list. At least temporarily, my habits have changed — and so has my spending.

Amid this paralyzing economic uncertainty, I decided to ask the experts what I could change financially during the pandemic — not only to prepare for the worst but also to take advantage of my adjusted lifestyle. Like, what can I do right now to cut back and manage my money better?

Lacey Langford, an accredited financial counselor based in North Carolina, told me to start by taking a look at my budget. (If this sounds familiar, it’s because it was the first task on last week’s quarantine to-do list.) She recommended pulling up my bank statements, writing out all of my expenses from the past two to three months and using different colored highlighters to categorize them. Think: utilities, food, entertainment and so on.

“My advice would be to be very practical about things,” Langford adds. “We need to be clear on what is a must and what is a want.”

Next, I should look to see what I can reduce. Langford pointed out that I’ve probably already begun cutting corners without even noticing. For example, staying in my apartment during quarantine means I’m not buying MetroCards or going to Starbucks on the reg. Automatic savings = wiggle room in my budget later on.

Lou Cannataro, a wealth management advisor with Northwestern Mutual, had a similar idea. He said to cancel or freeze services I’m not currently using because of the pandemic. Gym plans, museum memberships and subscription boxes are a good starting place.

I just need to use a critical eye.

“When times are good and we are extremely busy, expenditures that save time or provide a ‘deserved reward’ may have carried a value and/or are spent unnoticed,” Cannataro says. “What once seemed ‘necessary’ and ‘worth it’ may not hold anywhere near the same value today.”

That concept of value is important and kind of tricky, because Langford also said I should avoid drastically eliminating all fun stuff at once. If I make my life more austere than I need to, it could end up hurting my mental health.

The key is to be realistic and trim my budget in moderation.

For example, if watching trashy TV on my laptop is the one thing that makes me feel a tiny bit better about the entire world being on fire, I shouldn’t get rid of Hulu. But I could bring my subscription down a tier from Live to Basic and save a few bucks.

“Those little things are going to give you breathing room,” Langford says.

From there, I should reallocate the money I’ve freed up. Once my bills are paid, Langford said, diverting the sum to my emergency fund is a good idea.

If I do all those things and I still struggle to make ends meet, I should remember to ask for help. Cannataro said to take advantage of opportunities offered by the government and other institutions, like getting my student loan payments deferred or asking my lender to reduce my interest rate. Langford recommended checking out Aunt Bertha, 211 and Hunger Free America to find out where to get free or discounted food and services if necessary.

“If you need those food bags so you don’t spend your money on groceries so you can pay your rent, this is the time to reach out,” she says. “There’s no shame in your game right now.”

Bottom line? I’m probably already saving money just due to the nature of life in isolation, but it’s always a good idea to check my budget and divert any extra cash to my savings account. At the same time, I should try to prioritize my mental health.

All I’ve gotta do is get started.

“Looking at [your budget] can make you feel better,” Langford adds. “Knowing ‘I have some wiggle room,' 'I see how much I’m saving’ … those will bring people a better mindset when it comes to money.”

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Coronavirus and Unemployment: Everything You Need to Know

It's Not Just a $1,200 Check. Here Are All the Other Ways You Can Benefit From the Stimulus Package

How to Know When the Stock Market Has REALLY Hit Rock Bottom

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