Saving

'Get Money' author: 3 ways to save money when the future is uncertain

"Get Money" author Kristin Wong shares the strategies she using to help save money and plan for an uncertain future amid the coronavirus pandemic.

Kristin Wong
Kristin Wong is the author of "Get Money: Live the Life You Want, Not Just the Life You Can Afford."
Courtesy Kristin Wong

You know how when you run into a friend you haven't seen for a while, you promise to catch up, but unless you make a plan, it just never comes together? Money works the same way. We all know we should save more, the same way we really should catch up with an old friend. But if you leave that intention vague and open-ended, it just doesn't happen.

It's a lot easier to save when you have a clear, specific goal to work toward. 

When you know you need to save $5,000 for a car down payment, for example, you can crunch some numbers and make plans around that milestone. And with a plan, it's a lot easier to motivate yourself to actually save the money rather than spend it on something else.

Unfortunately, uncertainty seems to be the theme of 2020. How do you make specific plans for your money when you don't know what the future will look like?

Should you start saving for next year's vacation when travel restrictions may still be in place? Should you plan for a big move if you need to relocate to a lower cost of living city? Should you start bolstering your emergency fund in case you lose your job? These are all questions I've been asking myself in the wake of the pandemic, and there's a good chance you have been, too. 

To make matters more uncertain, I'm also at an age where it's time to decide whether I want, or can afford to, start a family. Adoption, fertility treatments, and parenthood in general is expensive. For myself and many other millennials, saving is difficult because milestones like these can seem like they're becoming increasingly harder to reach. 

About 30% of millennials don't expect to retire, and a quarter say they'll never buy a house, according to a 2018 TD Ameritrade study. These kinds of milestones — family, homeownership, retirement — just aren't as accessible as they used to be, which can make saving for them feel hopeless. 

But before you get to that point, certified financial planner Betty Wang's best advice is to take a step back and think about what you were saving for before the pandemic: "New home? Amazing trip? Comfortable retirement? Then, ask yourself, 'Do I think there will be a vaccine or a better way to manage Covid-19 in three years? Five years?'"

VIDEO4:1604:16
How this couple saved $1,500 buying a new car during the pandemic

Video by Stephen Parkhurst

Most people are optimistic about three years out and definitely five years out, Wang says, "so this helps give you some perspective." And it can help you get back on track to keep prioritizing and saving for your goals.

With that perspective in mind, there are a few specific money moves I've found helpful when it comes to saving amid uncertainty.

Actually save the money you're 'saving'

For the time being, without weekend plans with friends or last-minute travel excursions, I have fewer ways to spend my money in person. On the other hand, it's easy to buy things online: on furnishings, home decor, and other ways to feel a little cozier in quarantine.

To avoid this, I've started automatically putting the money I'm "saving" into a savings account every month. For example, in our pre-pandemic life, my husband and I spent about $600 a month on restaurants and takeout. Dining out is our biggest indulgence and one I've struggled to control for years. 

VIDEO1:2101:21
How reverse budgeting can relieve money stress

Video by Courtney Stith

Now that we're spending so much time at home, our restaurant spending has decreased to about $350. Of course, our grocery spending has also increased, but I still estimate we're spending about $150 less on food each month. So I've upped our automatic savings by $150 so that we're truly saving that money.

And because I'm used to spending that amount anyway, I don't even miss it.

Try an 'emergency budget'

Back in March, when quarantine began, I prepared what I call in my book an "emergency budget." An emergency budget is pretty much what it sounds like: a pared-down, bare-bones version of your current budget in which you're not spending on much more than basic necessities. It's meant to be a temporary solution for weathering any kind of financial storm, like a job loss. Or, you know, a pandemic-induced global recession.

Admittedly, we kept our Netflix subscription because, while it may not be a necessity, reruns of "Queer Eye" and "The Great British Baking Show" have made quarantine a lot more palatable.

VIDEO4:0304:03
Is now a good time to refinance your mortgage?

Video by David Fang

I knew my husband's job and my own income would be extremely volatile for the next few months, as we're both in industries that are completely nonessential. So I went through our budget, line by line, to see what we could cut to get our monthly expenses as low as possible to not only prepare for the worst but also sock away extra money in the meantime. 

In auditing each line item, I also looked for outside-the-box strategies to save. We refinanced our home. We called bill providers and asked for discounts. We canceled some other subscription services.

All these small steps have helped us continue to move forward. 

Set smaller, manageable savings goals

Aside from beefing up my emergency fund, which we should all be doing as much as our means allow, I'm really not sure what our future savings milestones should be. Maybe travel? Maybe a family? The future is unclear, so I'm trying to focus on what I can do in the present. 

We're lucky. Our incomes have stabilized a bit and we've started folding more "nonessential" expenses back into our budget. But that luck could always change, and it's a good idea to save in case it does. And on a more positive note, if we do start a family in the near future or get to travel sometime soon, it's smart to start saving for that now, too.

While the uncertainty of 2020 is certainly painful and overwhelming, it doesn't change your longer-term financial goals or your need to save for them.
Betty Wang
Certified Financial Planner

"While the uncertainty of 2020 is certainly painful and overwhelming, it doesn't change your longer-term financial goals or your need to save for them," Wang said. "It may alter your timeline or how you approach savings in the shorter term, but your motivation to reach your longer-term objectives remain the same."

In order to motivate myself to save for those larger unknowns, I set smaller milestone savings goals each month. Breaking up goals into smaller chunks, like $100 a week or $400 a month, is a lot easier than saving for a massive, vague goal that may or may not happen sometime in the future. It gives you an immediate plan to work with so that you're more motivated to find ways to save. 

Of course, those big picture goals like parenthood will require a lot more than the few hundred bucks a month I'm saving by cutting back on my expenses. But I'm doing what I can in the present, and that helps ease my mind about the future.

Kristin Wong is a freelance writer, journalist, and author of the book: Get Money: Live the Life You Want, Not Just the Life You Can Afford. She has written for The New York Times, The Cut, Refinery29, and Glamour magazine.

More from Grow:

acorns+cnbcacorns cnbc

Join Acorns

GET STARTED

About Us

Learn More

Follow Us

All investments involve risk, including loss of principal. The contents presented herein are provided for general investment education and informational purposes only and do not constitute an offer to sell or a solicitation to buy any specific securities or engage in any particular investment strategy. Acorns is not engaged in rendering any tax, legal, or accounting advice. Please consult with a qualified professional for this type of advice.

Any references to past performance, regarding financial markets or otherwise, do not indicate or guarantee future results. Forward-looking statements, including without limitations investment outcomes and projections, are hypothetical and educational in nature. The results of any hypothetical projections can and may differ from actual investment results had the strategies been deployed in actual securities accounts. It is not possible to invest directly in an index.

Advisory services offered by Acorns Advisers, LLC (“Acorns Advisers”), an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Brokerage and custody services are provided to clients of Acorns Advisers by Acorns Securities, LLC (“Acorns Securities”), a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Acorns Pay, LLC (“Acorns Pay”) manages Acorns’s demand deposit and other banking products in partnership with Lincoln Savings Bank, a bank chartered under the laws of Iowa and member FDIC. Acorns Advisers, Acorns Securities, and Acorns Pay are subsidiaries of Acorns Grow Incorporated (collectively “Acorns”). “Acorns,” the Acorns logo and “Invest the Change” are registered trademarks of Acorns Grow Incorporated. Copyright © 2019 Acorns and/or its affiliates.

NBCUniversal and Comcast Ventures are investors in Acorns Grow Incorporated.