The Hidden Costs of COVID-19 Soon to Hit Your Budget
April 23, 2020
Last week, three different friends had to replace or repair appliances in their homes. One surmised her oven finally gave up after attempting to bake 95 frozen pizzas over a span of five weeks. The other two families lost a refrigerator and a dryer, likely victims of the same unprecedented overuse.
Talking with them made me wonder... what other fiscal surprises, small and large, does the COVID-19 response have in store for us? And, in what ways will we have to adjust our plans to accommodate for these unexpected hits to our personal and professional budgets?
One fortunate circumstance of the disruption to our best-laid financial plans is the timing. As a best practice, most budget minders check in on their revenue and expenses mid-year and make alterations as necessary. So, while we may need to bump up the budgetary review on our calendar, it’ll only be by 30 days or so.
In addition the accelerated depreciation of home appliances, there are a few other unanticipated expenses we may want to consider. For starters, healthcare and medical expenses may be much larger than families – and businesses – planned. Although the number of COVID-19 cases is much lower in our state than others, we are also somewhat behind the curve. It’s not too cautious to allocate additional money to care for ourselves and those who depend on us.
A second fortunate circumstance is that for every possible cost, there may be a potential area of savings from which to reallocate funds. Families with parents and kids home for more meals may have completely depleted their grocery budgets, but could find a way to cover that with left overs in the gas and car care fund. Businesses that have sent the majority of workers home may experience significant savings in terms of utility use, janitorial services and building maintenance. How might they be able to assign these savings a new job?
To be sure, there will be some families and companies unable to simply shift funds from one category to another and adequately survive the financial impact of COVID-19. There will be gaps far too large for some businesses that already operate on razor thin margins and some families that regularly make ends meet paycheck to paycheck. As you’re checking in on your own budget, ask yourself if there’s room to help the most vulnerable in your neighborhood.
At Bank Iowa, we are working feverishly to process CARES Act loans to make life easier on the Iowa businesses who count on us. Likewise, we are working closely with the neighbors and farm families who make our communities special to ensure they have the resources to continue living financially well lives. If there’s anything you feel our family may do for yours, please don’t hesitate to reach out. Our team members would be happy to talk with you about thriving amid the fiscal surprises COVID-19 dropped on your doorstep.