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2020 is not business as usual. Today we’re going over how to pivot and change your budget to put your family in a more financially stable spot!
How to Readjust Your Finances
Most of us are still dealing with the financial fallout of the coronavirus. With this last part of the series, we’re going to see how we can financially prepare so that we’re in a stronger position coming out of this.
I had the pleasure of speaking with Joe Mecca from Coastal Credit Union on six ways you can pivot your finances and have it work harder for you.
You can watch the video right here or scroll down to get an edited transcript!
Pivoting Your Money in 2020
Elle Martinez: Joe, thank you for joining me for the last part of our finances and dealing with the Covered Crisis series. I appreciate you coming on and helping out. Thank you.
Joe Mecca: So. Hey there, everybody. Who’s listening. Surprise. It’s me again. You’re just an old pro here, but I’m glad I always like coming back on here. And this is this is a good time.
Elle Martinez: Yeah. I like having you on Joe, because, one, you love to talk about savings, but to look more importantly, you and the Coastal team – Everybody I’ve met so far has been really focused on helping people where ever they are financially get to a better spot. And that’s kind of the goal.
[This] series is not only to get through this in this situation but is there a way that we can set things up with our finances so that we’re in a stronger position?
So when things get better, we can make a lot more progress with our money goals. So I’m always grateful to have you on.
Joe Mecca: It’s always good to be here. And I’m glad you mentioned where we are, where you are in your financial journey, because that’s the core part of what we do in terms of just helping people with financial well-being. It doesn’t matter where you are, whether it’s step one or step 50. What can we do to help you get to the next one and the next one or the next one? And you know how we prioritize what what is important to you? Identify what your needs are and help you take that next. So that’s, you know, hopefully hopefully we’re talking to some people who are or, you know, find themselves in a position to you know, we’ve gotten through this Koban 19 situation or we will soon. Mm hmm. What’s the next step look like?
Elle Martinez: Yes. And so if you’ve been following in the series and part one, we’re just kind of focusing on being in a situation where you’re trying to just make sure the ends meet, that you’re not getting further in the hole. And then we’re we’re talking about building that savings, which is absolutely important. But we do know there are some in the community where they’re doing okay right now. They have some savings and they’re both working. The question is, they realize based on this crisis that they’re not happy with what they were doing before, with their finances. They feel like, man, we’ve been carrying too much debt. We’re not putting enough aside for, like investing or retirement. And we got to change something. So I kind of want to talk to you about this, Joe, is how can couples talk and work on their finances so they’re able to come out of this stronger? They can ride this out and have their finances in a better position.
Joe Mecca: So I think I think my first three things that I’ll say about it aren’t necessarily financial, but you can apply them to your financial situation. And so the first ones don’t ignore it. You know, we just came through a scary, stressful, emotional time. A lot of people’s financial vulnerabilities were quickly exposed. Don’t ignore that. Take the time to evaluate what happened, how it affected you directly. What was the cause of that? Why did it happen? But do that while it’s still fresh. You know, it’s uncomfortable when it’s still fresh, but do while still fresh because you’ve got the most information available to you when you work on a project and something doesn’t go right. You know, you just you got to go back to the next day. So what happened? What happened? Why did it happen? And what we do to make that better? The exact same tree was gonna be with your finances. That’s not necessarily financial advice, but apply it to your situation. As you know, we were we were exposed to where our weaknesses are. Yeah. And and what can we learn from that? What can we learn from that right now? So the second one is get rid of any thought you have about that. Can’t happen to me because it deshmukh it happen and have everybody else. Yeah. Chances are dead now. Now you didn’t die. You didn’t get sick. You didn’t lose your job. You came through. OK, but you were still negatively affected in some way. You couldn’t do the thing you wanted to do. You couldn’t visit friends and family. You know, something happened to you that you’re gonna have to learn from and prepare for it to happen the next time because something will happen the future. And it will require you to have learned something now and apply. And if you know what it was for me.
Elle Martinez: What was it?
Joe Mecca: It’s I don’t I don’t stockpile anything. I like to go out immediately. I got a surprise. Like to gel. I like to go out to eat. I don’t go grocery shopping for weeks at a time. I buy things for days at a time. So what I found myself suddenly having to meal plan and stock up on food. One, it was harder, a lot harder to do that, and two, when I did get out and was able to go to the store and have half of what I was looking for. Yes. So so I was not prepared for things like meals and paper products and cleaning supplies. I just had to I had to kind of become resourceful on the fly because that’s not how I function.
Elle Martinez: Yeah, I’m just surprised by this.
Joe Mecca: I’ve taken for granted that I’ve taken for granted the fact that it’s always about me. I will. True. Sure. But for me, my food savings was at the store.
Elle Martinez: I see. I see. But I think you do have a point. There is you kind of realize, like, man, I didn’t know what this is how I was handling my finances or my routine. But yeah, this is what it is.
Joe Mecca: I can. It can and will happen to you. And, you know, this is unique in that it happened to everybody at the same time in a different way, but it happened everybody the same guy when things pop up in the future. You know, it’s it’s maybe cells still something you haven’t anticipated. But things will happen, they will affect you. So. So, you know, forget the fact that forget the thought that it can’t happen to you. It’s going to happen to you. The third thing, and this is a positive, is focus focus on the positives you got through this. You got through this. What were the bright spots? How do you build on that? What worked for you really well, that, you know, thinking ahead into the future. OK. Yeah, I can I can build on it, whether it’s, you know, personal, financial. You know, for me, it was I had to be resourceful, remember. Now I said I, I couldn’t buy paper products. Well, you know, I’ve gotten used to using cloth napkins and. Yeah. You know, shopper eggs have replaced paper towels. I’ve been doing a lot more laundry because of it. But yeah, I was able to able to adapt on the fly. So for me, it’s OK. Well, I need to know that stock up on some of that stuff in the future. But also you need to know how how you adapt to situations. Yeah. So, you know. Yeah, I’m talking about it in terms of stocking up on things, but you can do that financially as well.
You’ve learned that. Oh, well, wait a minute. Suddenly I didn’t have as many as expenses as I normally would. Was I able to repurpose some of my income into planning for the future or saving or getting myself into a better financial situation later on? And then how do I just keep repeating that behavior going forward? Now, there are some things that people can do financially situation. One is re redo your budget. Has your job changed? A lot of people are affected. One or two members in their household may be experience about unemployment during this time. Maybe they were they’ve gone back to work, but now they’re they’ve got a different income level. So so how does that now account into your monthly budget? How are you going to do that? Look back on your experience and find out, OK, well, which expenses that you had quickly. Which of those quickly became liabilities and what were problem spots during the situation that you might want to rethink later on? Well, maybe that’s a bill that I shouldn’t have in the future because it became a problem pretty quickly once once everything got a little crazy and then, you know, what were you able to get relief on this time? You might not be able to next time. So you go in for the Covid-19 situation. A lot of lenders were deferring loans and forgiving certain things. You had landlords that were pushing rent payments out. People will be flexible in a lot of things.
Utilities were and a lot of that is because it affected everybody. Yeah. Your next emergencies probably. In fact, I’d bet money. You remember. I don’t gamble. I would bet money. The emergency is going to be your emergency.
It’s not going to be a local or national emergency or in this case, a pandemic. It’s going to be your emergency. And there are things that you probably got assistance with this time that might not be there for you next time. So think about those things and how you plan for, you know, how do you get to the situation in the future without that flexibility? That’s a good point. And what we do was get our emergency funds in place.
Elle Martinez: I knew we would get in there. Going to sneak in an emergency fund.
Joe Mecca: And so if you remember the last the last episode we talked and we said, you know, we’ve always traditionally talked about being able to cover 400 dollar expense and then working your way up to a thousand and then thinking about saving up for three to six months living expenses. And we quickly found out that, yeah, that four hundred dollars, a thousand dollars isn’t enough for most people. And most people needed to quickly find three to six month living expenses. So that’s going to be your goal to work towards saving up a little bit and and repeat that over time. So you can’t get yourself into a situation where a situation happens and you need to find a way to survive for three months off of what you already have. You have. So no emergency fund becomes a very, very high priority coming coming out of this in the back end. And then I think the last thing I would say from a financial situation is take a look at your discretionary spending.
Yeah, maybe earmark a little bit more of it to spend at local businesses, local restaurants, give to local charities, know the people who got our community through this.
Give them our support. The people who. That we know were quickly, negatively affected. Now local businesses. So you’re not saying spend more money coming out of this? I’m saying spend a little thing.
Elle Martinez: Yeah. And spend more thoughtfully campaign.
And that’s where it comes down to spending thoughtfully. You know, and that’s on the discretionary side. I’m not saying put aside paying down your bill or paying down your loans or saving up for the future to spend, spend, spend and stimulate the economy outside of the money that, you know, you’ve got a budget, you’ve got a spending plan. Given yourself permission to spend some of your money. Doing a little more thoughtfully and focus on local stuff.
Elle Martinez: Yeah. Because I think at least for us, we saw that there were ways that we were spending and maybe like we didn’t get the joy out of it. I mean, we’ve pretty good if you look at the food budget. Not eating out as much. But still, it was we realized, you know what? We don’t need to eat out this much or we weren’t. You know, those lunches out weren’t as enjoyable for what we were spending and getting out of that. And then just saying, like, do I want to keep it at this level or maybe redirect it like we’ve discovered two new hobbies – well rediscovered two new hobbies. One was homebrewing. I got a batch right now. That should be ready by Friday. And we’re going to start a new one. And then also stargazing, like we got a telescope with the girls. That’s kind of been like our go to when there’s clear skies. These are at home hobbies that we can do that are fairly affordable, you know. So for, you know, families that they are looking at a necessity. They were cutting expenses. They may have discovered liquid. There’s there’s fun ways we can hang out or as a couple ways we could enjoy time together without having to go out and spend X amount of money.
Joe Mecca: That’s true. That’s absolutely true.
Elle Martinez: The thoughtful spending, I think, is definitely a key takeaway, and I kind of want to talk to you also about goals like setting up those goals. And you had some really good steps about that. Are there any tips on personal experience? Like how do you do you guys come up with your goals? Like, do you talk about money monthly or quarterly or. Kind of. As needed. When you’re trying to set up for a new goal; saving for a car, for example.
Joe Mecca: I’m I’m a big fan of monthly, too. Too much more frequently than that. And it just becomes stressful. And honestly, it’s a rhythm. You don’t weigh yourself every couple hours. And, you know, if you if you’re trying to lose weight, it is you know, you do periodically and see the progress you’re making. So I think once you’ve once you’ve laid out a plan for what you’re trying to do and revisited all that monthly, you’ll you’ll you’ll see your progress. You’ll you’ll be able to kind of assess what’s working, what’s not working. You may come up with new goals. Yes. You know, you don’t want to. You don’t want to sit down. You know, every week and try to go through finances because things don’t work. That’s not the kind of cycle that you’re on. Most bills that you experience are monthly or quarterly. So I like I like doing a monthly check in, know seeing what’s progressing, what’s not. Yeah. First of the month from a spreadsheet day. And so last month was frightening.
Joe Mecca: But, you know, you have to think about what you know, what you’re trying to do and what you’re trying to accomplish. And you know, are you on track? Are you off track? What kind of adjustments do you need to make? Actually, I had a small emergency recently and I didn’t need to tap the emergency fund for it because I had some extra money in a travel fund that I’m not using. So. So I figured I figured it was OK to take it out of the travel budget in the short term and then just replenish that later on. But that’s that’s an adjustment that you make on the way. Yeah. But, you know, I think I think for the most part, a monthly check in is is the way to go. You always take a look at you. What are your goals? What are you trying to accomplish this year over the next several years and then and on your long term, you know, what is your long term goal? And tracking what retirement looks like since probably since I started working. But, yeah, early on, that was difficult because you’d want to. Well, I’m not making any progress here in which you have to get into that routine. Okay. I’m just going to, you know, just keep at it, keep at it and make my little adjustments as I go. But just keep at it. And, you know, most your goals are to be shorter term than that. But you still have to be yourself to come up with a way to get there.
And if you think, like, off, I want to buy a car in the next three years. OK. Well, what does it look like on a down payment? Want to pay for it in full and then. OK. Well, here’s what I think it’s going to cost. How do I divide that up and then make those make those regular contributions to whatever account you’re putting that money into now? And you know, you’re not going to see it one or two times. You’ve got to wait, too. OK, I’m going to check in the first month. Check in the second month. And you start to see progress towards that thing you realize. OK, well, this is this is something I’m doing and it’s working and I’m gonna get there. Or here’s why I fell short. Here’s why I fell short. Yeah. You can look back on a couple of weeks and say you don’t want to wait six months ago. What did I do? What did I do four months ago that got me off track? Yes. That’s just it’s never going to work. But it’s easy to take, you know, take a look back three weeks ago and figure out, oh, here’s something I did. And that’s why I took money out of this account that I probably shouldn’t have. Or to look ahead a few weeks and say, here’s what I need to do over the next couple weeks. So for me, a monthly check ins.
Elle Martinez: Yeah, I agree with you. Part of it is, while I would say 80, 85 percent of our budget is probably going to be consistent month to month. There are things that come up. I know we’re not traveling now, but, you know, usually during the summer months you’re going to do more travel or, you know, you might have if you have kids, school supplies, like there’s a rhythm in the season. So your finances naturally should reflect that. And it’s good, you know, monthly basis if something is off. You can adjusted if something’s going well. Hey, let’s continue doing that and having these check ins. But I think you hit the nail with consistency like that is a key part of with your finances. You don’t have to put five hundred down this month and then nothing down the next month. You’re not going to make the progress you want. But if you can say we’re cutting our spending by one hundred a month, but now we’ve automate that automated that money to either go to savings or investments, whatever the goal is, then you’re going to see the progress, you know, piece by piece rather than, oh, I’m hoping that, you know, I’m going to do really well this month. But you don’t have a plan for the next month.
Joe Mecca: You put the processes in place and automate that. And then when you develop a routine, just becomes a habit. Yeah, yeah. And so the things that you can’t automate, you just you just commit to making them habits.
Elle Martinez: Absolutely. So I don’t call this crisis a good thing, but some good can come out of it when we decide maybe, you know what, let’s change for the better. Our financial habits so that an emergency comes or something else comes up. We can at least write it out better or at least minimize the effects and the stress that can come out for it. So I’m so glad, Joe, that you’ve been able to join me with this mini series with the practical tips to kind of help all of us get in a better spot financially, no matter where we are in our own financial journey. Thank you for coming on.
Joe Mecca: Well, thanks for having me. I’m glad we were. I’m glad we made it through.
Elle Martinez: Yes, we did it, guys. Hopefully you’re doing well with your finances, but if you’re looking for a better banking option, please consider Coastal Credit Union. If you’re in the triangle area of Raleigh, we’ve been members for over five years, been very happy with their service. And if you are saving for goals, I’m going to let you know from personal experience. They have competitive rates on checking and savings. And I recently used their auto tool to purchase a car for my husband this year. Got a great deal on it. So please check out Coastal and all they have to offer at bank better dot org. Thank you, Joe.
Joe Mecca: Thanks, Elle.