They were making $185,000 a year. COVID-19 changed that.

By Brienne Walsh
Advertisement
Thousands of families are experiencing major budget cuts amid the pandemic.
Getty Images

In this series, we’re exploring how Americans are coping with pay cuts and job losses. Tell us your story by emailing askmillie@millie.us.

Just a few months ago, Emma and her husband Paul were raking in $185,000 a year. The Atlanta-based couple, who asked us to use pseudonyms to protect their jobs, had a membership to the local spa, sometimes dropped hundreds of dollars a month eating out and were even able to save $1,500 each month for emergencies.

Then COVID-19 hit.

On April 2, Georgia Gov. Brian Kemp announced a stay-at-home order for the state, and Emma, who at the time was paid $100,000 a year as strategy manager at an automotive marketing company, knew she might be in trouble. The automotive industry was already struggling due to factory shutdowns in other states, and sure enough, a few weeks later, Emma saw her salary cut to $65,000 a year. “Hearing my new salary was scary, but it was also a relief to finally know the number so I could start making plans,” she says.

Fortunately, her husband—who makes $85,000 a year in claims management at a trucking company—kept his salary. But most of his pay goes towards benefits like health, dental, vision and life insurance for their family (the couple also has a three-year-old daughter), as well as into their 401(k). “I bring the cash, he brings the benefits,” Emma says.

Though they both still have jobs, Emma says she fears for the future, even as Georgia and other states have begun to re-open. “When I’m in the grocery store, I’m asking myself if I really need to buy those snacks,” she says. “I’m in panic mode because I’m worried this is going to get worse.”

Before the pandemic, Emma and Paul’s budget had lots of room for “extras.” After making their monthly mortgage ($2,214), car ($350) and day care ($1,260) payments, they dropped dough on memberships to separate gyms, as well as $150 a month on extracurricular classes for their 3-year-old. “We were really fortunate,” Emma says. “If I wanted a new sweater, I just bought a new sweater.”

Emma and Paul's Monthly Budget

Pre-Covid

June 2020

Mortgage

$2,214.00

$2,214.00

Car Payments

$350.00

$350.00

Utilities

$300.00

$350.00

Cell Phone

$89.99

$89.99

Gas

$200-$300

$50.00

Car Insurance

$149.99

$149.99

Memberships (Gyms, etc.)

$300.00

$0.00

Groceries

$300.00

$300.00

Day Care

$1,260.00

$1,260.00

Emergency Savings

$1,500.00

$0.00

Daughter's Activities

$150.00

$0.00

Misc. (Eating out, clothing, movies, etc.)

$500-$1000

$0.00

Subscriptions

$35.00

$55.00



Now, things look different. Because Emma is determined not to undermine all the savings they’d already built up—they have about four months’ worth of living expenses in the bank—she’s slashing every expense not necessary for survival. “If it wasn’t grocery, mortgage or bills, I cut it out,” Emma says. “I was really adamant about not using our savings,” Emma says. “I knew we could cover our bills paycheck to paycheck.”

That means they no longer save any money for emergencies each month, and they don’t pay for extracurriculars for their daughter. They canceled all of their memberships and stopped driving their own car, and instead began exclusively using Paul’s company car, which comes with a gas stipend. Previously, the couple spent at least a few hundred dollars a month eating out—she says that since the stay-at-home order, they’ve gotten takeout twice. Though Emma admits that these changes can be “hard,” she adds that “there are people who have it way worse than us.”

Day care has been another issue. For the first two months of lockdown, the couple’s daughter’s day care was closed. When it re-opened, Emma seriously considered whether the expense, which amounts to $315 a week, was worth it. By that point, Emma was doing the child care solo—her husband’s job was considered essential, and he was back in the office. “There was a lot of time spent on the iPad,” Emma says and laughs.

But Emma was busier than ever. She was not only doing her job, but also the jobs of other employees who had been furloughed. She was afraid that if she didn’t perform, she would lose her job to someone who wanted it more. Plus, after waiting two years to get their daughter into this day care, they worried that if they pulled her out, they wouldn’t get back in. “What if they find a vaccine next month?” she says. “I didn’t want to end up without child care at all.”

These budget cuts are compounded by a fear that this could all get worse. At first, Emma’s company told her that the salary cut would last through June. In May, it was extended through the end of September. “I sit here, and I think, ‘What if it’s nine months more?’” she says. “What if it’s 12 months more? What kind of re-evaluation will we have to do of our lives?’”

Still, Emma says that there is a small silver lining in this. She’s become a better cook and spent a lot of quality time with her daughter. Best of all, she thinks the crisis has made her smarter financially. “I think it’s forced me and my husband to take a real look at our finances and think about the long term,” she says. “Our savings would last us less than half a year. That’s not enough. We have to do better when we can.”