• As a full-time freelancer, I have no idea if or when the coronavirus will impact my income, but it’s certainly a possibility.
  • To protect myself, I’ve changed my spending in three ways: I’ve cancelled unnecessary services; I’ve cut my spending way back; and I’m putting all of my extra money into my savings — normally I’d spend some of it it on transportation and eating out with friends.
  • I also based my budget on a small monthly income, just in case I lose any of my clients.
  • Read more personal finance coverage.

To say that the coronavirus has had a profound impact on the economy is an understatement. While no one is truly safe from its effects, as a freelancer who deals with an up-and-down income in the best of times, I have a feeling that I could be hit hard, especially if this does end up going on for months and my clients have to make cuts to their budgets. 

In light of that, I’ve taken some drastic steps to change how I’m managing my money. Here’s what I’m doing differently to cut back on spending and save for a rainy day. 

How I’ve reworked my budget

When thinking about how to manage my money differently during the pandemic, the first thing I did was take a closer look at my budget as a whole. Typically, as a freelancer, whenever I redo my budget, I take an average of my last few months of income and base my budget off that number.

In this case, I’m not sure what my new average income will be, but I want to be prepared for the worst-case scenario. Instead of basing my budget off of my recent income, I used my lowest-grossing month from last year. That month, I had gotten sick and was only able to keep up with about half of my usual workload.

To be honest, working all of my usual expenses into that budget wasn’t pretty. I assumed all of my “non-negotiable expenses” — things like rent and utility bills — would stay the same. Once all of those were accounted for, I had far less breathing room in the budget than I usually do. I knew I would have to cut back on some of my miscellaneous spending. 

I cancelled unnecessary services

First, I took a look at what expenses I could just cancel entirely. I ended up cancelling my gym membership because I’m moving in a few months and it’s currently closed indefinitely. I don’t know if I’ll even have a chance to go again before moving, so it doesn’t make sense to keep paying.   

I slashed my nonessential spending

Then, I looked for ways I could cut back on my spending. In a certain respect, social distancing took care of this for me. Since I’m no longer leaving the house to meet my friends for happy hours or dinners, two of my biggest miscellaneous expenses — transportation and food — will be much lower than usual. 

Together, these costs usually take up around 20% of my total budget, but since it’s just me and I won’t be going out as much, I cut it back to 12% and will see if I can stick to that percentage. I also intend to spend most of that money on groceries rather than dining out. 

However, I know myself well enough to know that cooking every single day is not realistic for me. With that in mind, I left a little extra room in my food budget, so I can occasionally get takeout from local businesses. 

As a rule of thumb when I’m making cuts to my budget, I slash what I’m truly not using and cut back on miscellaneous expenses, but I leave enough wiggle room to help myself stay on track.

I’m saving any excess

For now, I’ve been lucky enough to still have work coming in. However, I want to be prepared if this goes on longer than expected and my clients stop giving me assignments. To that end, I’m doing my best to live off my newly reworked budget and save any excess that I earn each month.

For now, all that extra money is going straight into my emergency fund. While I started building my emergency fund a little while ago, it’s still not large enough to cover the three to six months of expenses that most experts recommend having on hand. I’m hoping to get to that point sooner rather than later, thanks to this new, more aggressive saving strategy.

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