We are living unprecedented times. None of us in our wildest dreams would have expected that a virus would put a temporary halt on what we were accustomed to in our routines. This may have taken a form of unemployment and serious financial hardship, or in working remotely from home with all the additional responsibilities of maintaining a household. Either circumstances can agree that it has obligated ourselves to either claim government assistance, or reinvent ourselves towards the new norm.

Now before this, I have been watching two known financial experts on YouTube: Dave Ramsey and Gail Vaz Oxlade. Both talk about budgeting and have their own views on accomplishing financial stability. I’ll give you a brief review on what each of them teach, and which in my opinion, is feasible during the pandemic.

Lets begin with Dave Ramsey. He has a 7 step plan which is Christianity-based, and follows the Bible scripture of Proverbs 22:7, “The borrower is slave to the lender”. He believes in a 0 based budget, which is listing all of your expenses in the beginning of the month, until all the money is accounted for and there is 0 dollars left to budget. He establishes that anyone can become financially secure by following the “7 Baby Steps”:

1. Save $1,000 as a Baby Emergency Fund.
2. Pay of all debt except your house, using the Debt Snowball Method (paying smallest debt to largest debt, regardless of interest).
3. Continue to fund your Emergency Fund to 3 to 6 months worth of expenses.
4. Invest 15% of your income in retirement. It can be in Growth Stock Mutual Funds, 401ks, or Roth IRAs.
5. Invest in your children’s college fund.
6. Pay off the mortgage on the house early.
7. Be wealthy and give. It can be a charity, church or other benefice causes.

In the meantime, Gail Vas Oxlade has a different view on budgeting. She divides the budget in 5 basic categories, and each category has a percentage of expenses allocated to it. These categories are the following:

• 35% of household income in Housing: this includes mortgage, rent, utilities, household maintenance and home insurance.
• 25% in Life: this includes groceries, childcare, medical, clothes, entertainment and gifts.
• 15% in Transportation: this includes gas, car repairs, and insurance.
• 15% in Debt Repayment, using the Debt Avalanche Method (paying highest interest rate debt first, regardless of the amount owed in each)
• 10% in Long Term Savings: This can be an emergency fund, retirement funds or other forms of investment.

Now, to be honest, I can find logic in both of these financial strategies. Budgeting is as unique as the person who does it. But which strategies are good to use during a pandemic? While I haven’t recently heard of a strategy by Gail Vaz Oxlade regarding this newfound reality, Dave Ramsey have suggested that depending the circumstance, to go into “Storm Mode”, which basically means to save as much cash as possible for the time being, and once normalcy returns, to continue with the Baby Steps.

What am I doing at home during this time? My specific circumstances are that I am receiving my normal salary from teaching. My husband has had fluctuations due to shelter in place orders. So which are our priorities?

1. While it is possible, budget all necessary expenses, like the mortgage, utilities and food (Dave Ramsey’s Four Walls are Shelter, Utilities, Food and Clothing) No investment in clothing, since there is a shelter in place order.
2. I was following Dave Ramsey’s Baby Steps prior to the pandemic, but I noticed something curious about my debt. Basically, that my debt was in order of interest rates. In other words my largest debt has a higher interest rate than my lowest debt. So, although I stopped my Debt Snowball and started once again to pay minimum payments on my debts, I am now following the Debt Avalanche, and I am seeing lower balances on my higher interest rate debts (Who figured?).
3. Save, save, save. Since Puerto Rico have their own particularities during COVID-19, including recent earthquakes, possible drought and predicting an active hurricane season in the Atlantic, anything that can be saved, will be saved. Especially since there is uncertainty regarding my husband’s employment. In the event that there is a layoff, we have a small emergency fund to hold us for at least a month, using it wisely.

Now what if you are reinventing yourself, using entrepreneurship methods to sell masks, food, or any other necessity during this pandemic? My best advice is to always focus on your four walls in this order:

• Food
• Utilities
• Rent/Mortgage
• Clothing

Right now, there is forbearance on debts including mortgages, personal loans and credit cards. So if you feel that you need to use these services, call your local bank to see if you apply. Keep in mind, that after the forbearance period, you would have to abide the conditions of repayment given by your bank. So any profit made from your new endeavor, set aside an amount to either make a payment plan after the forbearance period, or to pay the amount in full. My personal opinion is to never take forbearance if you are able to pay for your debt, even if it is the minimum payment.

So, the right way to budget during difficult times, depends entirely on your current financial situation. Remember, whether its making a list of every expense, or separating expenses through categories, you have to manage your money wisely.

Praying for all of you to be healthy and safe during these times!