Calculating and understanding your budget

If your income has been reduced, it’s time to update your budget and make sure you have the runway to weather a job search. 

How to extend your personal runway during COVID

The average job search from first application to signed offer letter takes about 3 months. To give your search the attention and the time it needs, you must make sure you have the financial runway to last at least 3 months, and maybe more. 

If your income has been reduced, it’s time to update your budget and make sure you have the runway to weather a job search. Here is how to do it.

While budgeting may not be the most fun exercise, it is important to understand your financial situation. If we have learned anything from this pandemic, it's that we need to do a better job of planning for the unexpected, and that goes for your finances, too! is how to understand and extend your personal runway in 4 steps. 😎

  1. Add up your income and assets 
  2. Summarize and decrease your your core expenses
  3. Cut your excess and discretionary spending
  4. Stay accountable and use available technology!

👉 Please make sure to use our Mento budget calculator alongside the below steps!

Add up your income and assets

To figure out how much you need to cut spending, we first need to figure out how much money you have coming in. 

First, let’s figure out your primary income. Your primary income is your salary, or if you have been laid off, it is your Unemployment Insurance (UI) plus Pandemic Unemployment Compensation. If you have been laid off or furloughed and have not filed for UI, use our benefits finder to calculate how much you will get paid and learn how to sign up ASAP! 

Second, let’s add up your secondary income. Your secondary income is any money you make outside your primary income. That includes any side hustles, hobbies, part time work, etc. 

Finally, we need to summarize your liquid assets. That means all money in your checking and savings accounts, emergency funds, stocks and crypto, and any other random accounts you might have that you can extract cash from. If you do not have any savings or an emergency funds set aside, that is fine.

Okay! Now enter your monthly income and assets into the far left column of your budget calculator, and let’s more onto your expenses. 

Summarize and decrease your core expenses

Start by first entering your core expenses into the budget calculator. Your core expenses are the essential things you need in order to continue to live. Typically, they include:

  • Housing
  • Healthcare and insurance
  • Food and personal care
  • Transportation

Now let’s figure out how to knock down those numbers even more!


Your transportation expenses have likely been decreased by shelter in place, so update your budget calculator accordingly and let's focus on decreasing spending elsewhere. 


This is the core expense category that you can hopefully decrease the most in the short-term.  

If you are a homeowner, the CARES Act provided you protection if you are paying a federally-backed mortgage. If you are a homeowner, reach out to your lender to learn about your options for decreasing or deferring your mortgage payments. 

If you are a renter, you should still reach out to your landlord as some landlords might be willing to decrease or defer some of your rent payment. Also, while you are negotiating keep in mind that your landlord would rather have you pay less rent, then break your lease 😉. If your landlord will not budge on rent and you cannot make rent, there is currently a federal ban on evictions in effect until the end of April.

Most utility and internet bills are also negotiable.  Give your providers a call and see what type of deals they are cutting as a result of COVID. 

Health Insurance

Healthcare costs can vary greatly depending on what plan you are enrolled in. It’s also very easy to spend too much on healthcare without knowing it, for example, if you are on COBRA and don’t have pre existing conditions, there are other more affordable options that might work for you. If you need help figuring out what healthcare coverage is best for you, try out our benefit finder quiz.

Food and personal items

With shelter in place, your days of eating out are over 😟, so you are likely already saving money in this category but there is still more you can do. First off, there is power in numbers. Work with your roommates to start a meal plan. The more you can buy in bulk and cook together, the more you are going to be able to save on food. 

Cut your discretionary spending

It’s going to hurt, and it's not going to be fun, but you need to stop spending money on all non-essential things including: 

  • Dining Out
  • Travel
  • Entertainment
  • Shopping
  • Vacation/Travel 
  • Subscriptions (do you really need Netflix, HBO Go, Amazon Prime and Disney+)
  • Health & Fitness

The silver lining is right now there is not much opportunity to do much discretionary spending. But, as things get back to normal and you are still looking for a job, make sure to be smart and think about what you really need, and do not need. 

If you have any discretionary spending that you absolutely cannot live without, enter it into your budget calculator. 

Stay accountable and use available technology

Okay, now that we got that sorted out the number in the bottom right of your calculator highlighted in yellow is how many months of runway you have left before must start making money. Also, we encourage you to copy the tab Feel free to play around with the inputs inside your calculator to see how adjusting your spending might decrease or increase your runway. 

Now all this work you just did will be for nothing if you don’t stay accountable to it! Use your support system. Whether it's your sibling, parents or your most responsible friend, ask them to check in with you every two weeks to see how things are going. 

Another easy way to save and grow your wealth is by using technology available to you. There are so many tools out there built for exactly that.

Download a personal budgeting app like Mint, PocketGuard, or Co-Pilot. Sync your accounts and cards with the app and set a limit on how much you want to spend each month according to your budget calculator.

Don't stop there! Apps like Drop, Swagbus, Rackuten, and others can get you cash back on purchases. It might not seem like a lot but getting 2-5% cash back on purchases can add up to a few meals quickly!

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