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I Need a Budget, Like, RIGHT NOW

The Calming Presence of a Budget in Times Like These

These are crazy times, and we’re feeling it in every fiber of our being. Peel back the layers of this Covid-19 pandemic and it’s not just a fear for our physical health (and the health of our loved ones), it’s a fear for our financial health and the future in general. Many of us are wondering…Is my work going to get shut down? Am I going to get paid? What if I run out of money?

Maybe you’ve already been laid off or put on furlough, and you’re trying to navigate your soon-to-be reduced income as fast as you can. It’s uncertain and scary, and you are absolutely not alone.

Even if your income hasn’t changed, you’re probably feeling stressed—we all are. There is so much that we cannot control right now, but we can do the best we can, and if there has ever been a time when we all needed a budget, it is now.

Perhaps it’s a classic response from a company called You Need A Budget, but in all earnestness, a budget can be a beacon lighting your way through uncertain times. It’s the key to prioritize your money, minimize financial stress, and feel more in control during an unpredictable time.

Even if you have less money than you expected, or a whole lot less than you hoped to have, you can manage the money you have in a way that will provide clarity and control.

1. Make a List of Current Expenses

First things first, answer this: how much does a month of your life cost? To get to this number, you’re going to make a big long list. Go through credit card statements, checking account transactions, your Amazon orders in the past year, the whole nine yards.

Come up with a list of the categories you spend money on, and a ballpark monthly cost for each category. Be super realistic with this spending: we’ll get to cutting down expenditures later. For now, we want the most accurate picture possible of the current state of your spending. You can write this list down on a piece of paper (or use the free trial we offer in YNAB to make the rest of the steps a little easier).

Look through this list to jog your memory. It’s not exhaustive but it will give you a solid starting point:

  • Mortgage/rent
  • Student loan
  • Car payment
  • Electric bill
  • Water bill
  • Other utilities (trash service, gas bill)
  • Internet
  • Groceries
  • Transportation costs (gas, bus pass, tolls, parking)
  • Auto maintenance (oil changes, new tires)
  • Car registration (license, tab renewal)
  • Auto insurance
  • Home maintenance
  • Renter/home insurance
  • Medical costs (dental, eye care, therapy, doctor, etc.)
  • Clothing
  • Gifts
  • Giving
  • Computer/phone replacement
  • Software subscriptions
  • Entertainment subscriptions (Netflix, Hulu, Spotify, etc.)
  • Vacation
  • Gym membership/fitness
  • Education
  • Dining out
  • Gaming
  • Music
  • Coffee
  • Holidays
  • Dates
  • Beauty (hair cuts, makeup, nails, etc.)
  • Christmas
  • Property taxes (if they’re not rolled into a mortgage)
  • Movies
  • Phone bill
  • Life insurance
  • Warehouse membership (Costco, Sam’s club, Amazon Prime, etc.)
  • Credit card fee (some cards have yearly costs)
  • House decor
  • Banking (interest owed or fees)
  • Household goods
  • Pet care
  • Child care
  • Kids’ Expenses (piano lessons, swimming, summer camp, etc)
  • Miscellaneous

If you’re writing this list down, just put the amount next to the category. If you’re using the YNAB software, you’ll set up a target in each category. It’s ok to guess!

Once you have all the categories and the estimated costs, add them up. This number is your starting point. It gives you a ballpark of how much your current life costs.

If you’re a visual learner, watch this video to see how you can estimate your total monthly expenses by setting up a budget template in YNAB.

An Example: Step One for Billy the Bro

For example’s sake, let’s say we’re setting up a budget for Billy the bro (a single guy living in Miami). He goes through this step and finds out his current lifestyle costs $3,386 a month (and he also spends way more on pizza rolls than he realized). Here’s what this exercise looked like for him:

  • Rent: $1200 (utilities included)
  • Student loan: $350
  • Electric bill: $80
  • Internet: $60
  • Auto Loan: $200
  • Groceries: $350 (that includes $50 worth of pizza rolls)
  • Gas: $100
  • Phone: $70
  • Car insurance: $90/month
  • Renter’s insurance: $20
  • Medical: $0 (money comes out of his paycheck for a Health Savings Account (HSA) so he doesn’t count this in his budget)
  • Clothes: $100
  • Gifts: $50
  • Netflix: $9
  • Spotify premium: $10
  • Amazon Prime: $12 ($120/year)
  • Crossfit gym: $110
  • Eating out: $275
  • Dates: $100
  • Miscellaneous: $75
  • Vacation: $100 ($1200/year)
  • Credit card minimum: $25 (current balance: $2400 – 0% APR until Oct 2020)

Total monthly expenses: $3,386

Nice. Billy’s got his number! It’s not as pretty as he wanted it to be, but it’s reality. We’ll come back to Billy later. For now, back to you.

2. Only Budget as Far as Your Money Will Go

Alright, now you’ve got a list of expenses and a rough idea of how much they cost. You’ve done a big chunk of the legwork already.

The next step is to look at your bank account and see how much money you have right this minute. Maybe your balance is slim, maybe it’s fat, but this step remains the same no matter your position.

You’re going to take the money you have right now and make a plan for that money. If you’re not familiar with the YNAB Method, this is the very first rule of YNAB—Give Every Dollar A Job.

It means just what it says. Only budget the money you have right now. See that account balance? That’s the money you can allocate. If you don’t have a lot of money, that might seem incredibly disheartening at first glance, but hang in there. You’ll see shortly how this setup offers powerful clarity on your next steps.

When more money comes in, you’ll decide what to do with that money at that time (and not a moment sooner). You get another paycheck in two weeks? You’ll budget the money in two weeks. The government sends you a stimulus check? You’ll budget that money when you cash it. Right now, it’s only about the money you have.

This is a simple but powerful shift for most people who are inclined to forecast all of the income that they expect to receive for the month. But that’s just asking for trouble—what if it doesn’t show up? Obviously, we hope that’s not the case but do yourself a favor and only count on the money that you have right now.

Step Two: Billy Gives Every Dollar a Job

For Billy, he looks at his checking account and has $2850 currently sitting there. If you remember from the first step, his monthly expenses total $3561. Now he’s able to see that the money he has won’t cover everything he wants in a month. Sure, he feels a little bummed but he also feels relieved to finally see the whole picture.

Here’s how Billy prioritizes the money he has to pay for the month of April (at the time of writing, there is only one week left in March so he budgets $150 for one more grocery run in March and the rest of the money goes to fund April):

April 2020 Budget:

Now, before you get all Judgey McJudgerface on Billy, it is important to remember that there is no right or wrong way to prioritize your money. Each person is going to make the choices that make the most sense to them. Only you know what’s most important to you, the ins and outs of your circumstances, and what you’re dreaming about for your future. Plus, we’ve got more steps to go through that will further suss out if Billy has really prioritized his money in the way that he values most. Stay tuned!

3. Set Up a Hunker-Down Budget

Alright, and back to you. Now is the time to hunker down: both physically and with your finances. Whether you’re sheltering in place or simply practicing social distancing, you’re probably home—preferably with your favorite people and the patience of a saint. This means your day-to-day expenses should reduce. Sure, you’ve already spent an embarrassing amount of money on peanut butter pretzels but we can leave the past in the past. And let’s be honest: you’ve already eaten all of those pretzels.

To turbocharge your savings, set up a hunker-down budget. To do this, you’ll separate your needs from your wants. As in, physically separate them in your budget. Needs go at the top. Wants go at the bottom. The obvious basic needs are food, water, shelter. Your needs might expand to child care, a loan you’re paying back, insurance payments, or wifi. With the money you have, you’ll assign your jobs to your dollars for these pressing needs. The big question is, what do you need your money to do before more money arrives?

Let’s visit Billy again to see how his hunker-down budget is taking shape.

Billy Hunkers Down

In the last step, Billy gave every dollar a job. Now, he may or may not have done that with the looming cloud of a global pandemic, but now he’s quarantined in place and the reality is setting in: he’s hunkering down and his budget is too!

If you remember from his budget in the prior step, he funded all of his immediate obligations first (groceries for the last week of March, then rent, electric, groceries, internet, student loans, auto loan for the month of April). As he goes through his budget with a fine-tooth comb, he separates out his needs and wants. He’s ok with skipping leg day for a while and cancelling his gym membership (granted…he was already skipping leg day but that’s beside the point). He also moves money away from dining out, gas, and fun money. This automatically frees up $364, just by reprioritizing his money to match his current state of sheltering in place.

Here’s how he separated his Needs and Wants:


  • Credit card minimum payment
  • Groceries
  • Rent
  • Electric
  • Internet
  • Phone
  • Gas
  • Student loan
  • Car loan
  • Car insurance
  • Renter’s insurance


  • Stuff I forgot to budget for
  • Amazon Prime
  • Netflix
  • Fitness
  • Spotify
  • Fun Money
  • Gifts
  • Dining Out
  • Dates
  • Clothing
  • Vacation

We’re not saying you can’t fund wants, this approach just forces you to prioritize what is a true essential and what’s a “could cut if needed.”

Wondering how to create a hunker-down budget from your current YNAB budget? Ashley shows us how quite brilliantly!

4. Cut Costs

Laying out your hunker-down budget helps you quickly see where to cut costs, especially if you take a closer look at your Wants category group. You’re probably not going to eat out, you’re skipping the haircut, and that vacation will wait.

If your current account balance doesn’t quite get you through the month, not to worry, you can still budget! When more money comes in, you can finish funding the last of your expenses and then prioritize the rest of your new dollars (but not until you have the money!). Budget as far ahead as your money will take you.

Read more about how to budget when money’s tight…

Billy Cuts Costs

After Billy slashed money from the Wants categories, he started getting a little more creative to free up cash. Remember that $350 a month that Billy was paying in student loans? Well, with the CARES act he’s able to pause payments on federal loans through September 30, 2020 and interest will not accrue. This frees up another $300 (he still has a private loan that he pays $50/month that does not qualify for forbearance). With that extra push of money, he starts funding out immediate obligations for May.

Billy started with monthly expenses of $3386 and was able to slim it down to  $2301 (and that still gives him the life luxuries of Spotify, Netflix, and $20 a month of fun money). He just got paid again ($1750 every two weeks) and budgets that money for essentials through May. At the moment, he still has a job, but he thinks it’s just a matter of time before he doesn’t. In the meantime, he’s saving as much as he can and letting his budget inform every spending decision.

Read more about developing options for financial help during the Coronavirus crisis.

5. Let Your Budget Guide Your Way

We don’t know how long this hunkering down is going to last any more than you do. But, we do know this: the more we can protect our money for essentials now, the longer your money can lay out a calming runway ahead of you.

With the rapidly changing times, your budget can tell you just how long the money you have will last and help you make decisions around what you can afford, if you should look for another source of income, and what to do next with the money you do have.

Billy Reduces His Financial Stress

Billy ended up getting furloughed at his company—which means he was temporarily laid off but he did get to keep his health insurance. He ended up qualifying for unemployment benefits (though this varies state by state). Instead of his usual inflow of $3500 a month from his job, he started receiving $375 a week ($1500 a month) in unemployment benefits.

He was able to barter down or defer his internet bill, phone bill, car payment, and utility bill because of these hard times. His landlord offered reduced rent for 90 days. He cut out his Netflix subscription (but his friend gave him their password) and extraneous spending. Now, his monthly income requirements are just $1350 a month, and he’s bringing in $1500 a month with unemployment. He saves the extra each month to build up an emergency fund.

While this required some work and a bit of sacrifice on his end, it really didn’t feel as bad as you would think because Billy was making these choices by looking at his budget, rather than from a pit of shame, scarcity, and fear. His biggest surprise was that he was making these adjustments without adding a single dollar to his credit card debt.

The time will come where he’ll start working again, bring in regular income, and shift his focus to tackle his larger financial goals, but for now—he was keeping his head above water and had plenty of energy to just keep on swimming.

So What Can I Do Now?

You can officially get a budget! If you’re ready to give budgeting a whirl with us, we offer a free 34-day trial with a full suite of amazing support and teaching so you’ll be in total control of your money in no time!

But whether you use our software or not, we will teach you how to budget (for free!) and get in control of your money. Here’s where to start learning:

If you’ve never budgeted before (or it just never stuck):

Read: The Ultimate Getting Started Guide

Watch: Four Budgeting Rules for Less Money Stress

Join: Getting Started Free Live Workshop

Listen: Rule One Broken Down

If you’re already budgeting and want a hunker-down version of your budget:

Watch: Budgeting in Unpredictable Times

It’s a stressful time, and we wish we could give you clear answers of what will happen next. We do know this: set up a budget today and you’ll be better prepared for whatever happens next.

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I Need a Budget, Like, RIGHT NOW