Earning in uncertain times

James warns us about presuming on the future:

Now listen, you who say, “Today or tomorrow we will go to this or that city, spend a year there, carry on business and make money.” Why, you do not even know what will happen tomorrow. (James 4:13-14)

The current pandemic crisis drives home the uncertainty of the future.  Who could have predicted a year ago that schools nationwide would be shut down, that unemployment would take a dramatic turn for the worse, and even that worship services would be compelled to go online rather than meeting in buildings?

In the context of earning, presuming on the future takes several forms:

  • Assumptions that current jobs will continue uninterrupted
  • Expectations that bonuses or raises will be awarded
  • Conjectures that promotions will occur

Events this year have shown us that these assumptions don’t always hold. Earlier this year, we saw the fastest and steepest spike in unemployment since employment numbers have been tracked. Some of that spike has softened in the last few months, but there is still a significant impact on jobs overall.

Planning for the Unexpected

Certain types of variability in income are foreseeable: seasonal jobs, commission jobs, etc.  Some, like the current crisis, are not predictable. Whether foreseeable or not, change will occur and we need to be prepared for that.  Good stewardship requires us to make some basic assumptions in order to create a Spending Plan. What plans can we reasonably make to minimize the risk of an interruption?

  1. As far as possible, budget necessities for one income. Plan for the first income (usually the greater of the two) for giving, emergency savings, and basic housing and living expenses. Use the second income to increase giving/saving and to provide for extra entertainment, vacations, etc.
  2. For seasonable or variable income, average monthly income across the year. Try to limit basic housing and living expenses so that a low income month could cover them and use the higher income months to cover extras and to save for annual expenses (taxes, etc.).
  3. Don’t budget for a windfall. Even if tax refunds or bonuses are a normal occurrence, it’s not wise to assume that they will occur every year. When they do occur, use them for extra giving/savings and non-essential expenses.  If you have annual expenses, it may make sense to set aside windfall income to meet these. Keep in mind that you may need a “Plan B” if the windfall doesn’t occur!