Number of the Day Shows Budgets Prevent Pandemic Stress
Our take on the most relevant or interesting figure in personal finance today
That’s the number of people who experienced a decrease or no increase in their financial stress despite the COVID-19 pandemic because they use a zero-based budget, according to a survey by personal finance app You Need A Budget.
In a zero-based budget, every dollar is given a purpose as soon as it is received so you know where it’s going and have zero money leftover in your budget. Among the 6,000 employed and unemployed budgeters surveyed in December by You Need A Budget, 98% said they felt more in control of their finances since starting a budget even though 29% had lost a job or income in 2020. The survey also found that 66% managed to save more in 2020 than they did in 2019.
Fifty-three percent of those surveyed said their annual household income is less than $100,000, and 67% said they received or plan to receive a government stimulus check. Almost a third (30.6%) said they plan to use the stimulus check to build an emergency fund and 25.55% said they’ll use it to pay off debt, the survey showed.
“In a year of economic upheaval, people’s plans have uprooted, and financial anxiety has been at an all-time high,” Jesse Mecham, founder and CEO of You Need A Budget, said in a statement. “Having a hands-on spending plan and budgeting system in place provided an element of control. A budget puts people in the driver’s seat of their financial choices, allowing them to maintain peace of mind and change their priorities as needed.”