It’s time to check in again with Joe and Josie Jones: our hypothetical average American family as they trek into the murky unknowns of back-to-school season. See how this family rolled with the punches gracefully and otherwise during the harrowing gauntlet that is Back-to-School 2020 with a kindergartener and a second grader.
And a friendly disclaimer before we begin: there is no one-size-fits-all budget, and financial pictures look very different from one family to the next. This is a fictional account to give you a picture and using the median household income and average debt loads seemed like a nice place to try and do that.
A Quick Recap
Budgeting in April 2020
- Hello, global pandemic
- Joe and Josie started a budget
- A $3,400 stimulus check arrived
Budgeting in May 2020
- Josie got laid off and filed for unemployment benefits
Budgeting in June 2020
- Between unemployment benefits and deferred student loans, it was a cash-rich month
- Extra money is stashed in an emergency fund
- Credit card balance stayed steady
Budgeting in July 2020
- Net worth increased 84.5% since they started budgeting
- Firmly out of the paycheck to paycheck cycle
- Finally felt in control of the money they had
Joe and Josie’s August Budget
On the very first day of August, Josie knew her beefy unemployment benefits had come to an end, despite her furiously refreshing the news and waiting for Congress to maybe pass a last-minute extension. Despite all her clicking, it didn’t happen. That meant a sudden drop from $615/week she had been getting since May to now receiving $215/week starting August 1.
Here’s what their August cash flow looked like:
- Inflow: took home $3,460
- Outflow: spent $3,759
- Net income: -$299
The culprit tipping the scale negative? An unexpected laptop they needed to purchase when they found out their kids’ school district would be going fully remote. Josie was slowly learning that there’s just no such thing as a normal month and thanked herself for tucking extra in the emergency fund (which helped fund this new laptop after all the other normal categories had been pillaged).
September Fully Funded
September kicked off with a fully funded month since they’d already set this money aside in the prior month. Heyo! They’ve recently started living on last month’s income and it still feels awesome.
Here’s what the Joneses’ budget looked like at the start of the month, with all their categories plump and green.
A Back to School Season like No Other
On the life front, things were not feeling quite as plump and green. Joe and Josie have a 5-year-old—Josephine—who is starting kindergarten this year, and a 7-year old—Joe Jr.—who is starting second grade. The requisite back-to-school pictures were still taken despite neither kid leaving their driveway to start classes.
Like many parents, Joe and Josie have been through the ringer of emotions and logistics about school this year. Their school district announced that they would be doing fully remote learning through November 2. There may have been weeping and gnashing of teeth that evening, but alas, life must go on, distance learning and all.
With Josie now unemployed and home, she’s reluctantly taking over as the de-facto wrangler of keeping track of Zoom schedules and apps and platforms and assignments and general chaos. She’s also had a few nightmares about trying to remember if green is a primary color and how the heck to do second grade math (is it just her, or has everything changed?).
On the Money Front
New Expenses of the Remote School Year
Remote learning came with a slew of brand new expenses. We already mentioned the new laptop—they had an old laptop, but with both kids needing to hop on Zoom calls at the same time, they needed another one (new laptop: $428).
Josie also realized they needed a real, separate space for the kids’ at-home schooling. Last spring, the virtual learning was sprawled out across the dining room table but now that this seems to be a “new normal,” the dining room just wasn’t cutting it (new desk: $150).
The mental toll of all the hullabaloo also seems to be reflected in Josie’s latest spending. This has so far been reflected in the coffee budget (currently at $34 and counting for September), along with a new very-soft t-shirt ($19) that felt like a precious little “treat” after surviving the first week of remote learning (because have you ever tried putting a second grader on an hour long Zoom call? Sometimes you just need a little hug from a new t-shirt to remind you everything will be OK).
Total remote-learning expenses: $631
New Cost Savings of the Remote School Year
In some odd silver linings, Josie noticed a few hidden cost savings of this time. She doesn’t have to make Joe Jr. a lunch for school, she can just heat up leftovers from the night before and it’s not only less stressful than a hurried morning packing a lunch, it’s weirdly cheaper too (she guesses she’s saving at least $50 a month in the grocery budget).
There also aren’t any kids’ activities to spend money on: no tumbling at the gym ($80/month), no soccer practice ($75/season), fewer back-to-school clothes and supplies ($300 savings) and the school has quieted down on the fundraising front, so there were some savings there too (Josie guesses she’s probably would’ve spent $50 by now in a bake sale or walk-a-thon). Plus, now that they had a budget, they could clearly see there wasn’t bandwidth for $100/month piano lessons Joe Jr. was about to start, and it just didn’t feel like a priority right now.
Estimated cost savings: $655
After looking at these numbers, the financial costs of virtual school actually seemed to be a bit of a wash at the moment for the Jones family. It was not lost on her for a minute, however, that her unemployment situation put her at a greater advantage from some of her friends who are now debating leaving their jobs to stay at home because of the cost of childcare or even just having a person around to help with Zoom calls and inevitable technical difficulties.
New Feels About Money
This year spooked Joe and Josie. Well honestly, this year has spooked a lot of people. After seeing their income drop precipitously, Joe and Josie’s capacity for risk and comfort-level with debt look and feel completely different. They want nothing more than a big, billowy, cozy cushion of money just sitting in the bank to provide peace of mind and serve as a hedge against the unexpected.
They are more cautious, conservative, and intentional with their spending. Credit card debt has become less palatable, and their desire for self-sufficiency and less depending on the whims of passing government bills is powering some of their newfound money management efforts.
Sure, they can’t immediately wipe out their credit card debt right this month, but this thinking has started to build its roots in their brains—and it’s started to affect their behavior in subtle ways (see: cheap camping trip, putting the extra t-shirts back on the shelf, saying no to music lessons right now). They’re even talking about attacking their credit card debt and tightening down even further in the near future.
Joe’s income levels out and he’ll be taking home $2800/month for the foreseeable future. The state of Illinois passed an added $300/week benefit for Josie’s unemployment checks, but she’s not sure when they’ll start hitting (see how your state is handling enhanced benefits here).
And next month? They’re raring to start tackling that pile of credit card debt, if a bit slowly at first. Onward and upward!
Follow the YNAB Weekly Roundup to see what happens next for Joe and Josie Jones.