How to deal with your finances in times of crisis

By Pieter Schelfhout

Many people start to feel the effects of the measures taken by governments all around the world in their fight to the rising spread of Covid-19. Bars, restaurants, shops and companies are temporarily closing down their businesses and putting their employees on temporary unemployment. Many people and families are left wondering if they have the financial means to outlast the economic impact of this health crisis. To help out with that question we’ve set out a few simple steps you can take to find out.

The Covid-19 crisis has forced many companies to put their employees on temporary unemployment and to cancel freelance contracts. Are you one of them?

A lot of people see an income decrease or expect some kind of economic impact on their finances. Many of them are left wondering if they have a large enough financial buffer💰to last throughout this crisis.

At Cake, we started out with the mission to help people control and improve their daily finances, both short and long term. Triggered by the last big economic crisis, we set out to make an app that would help people with exactly these kinds of questions. For over a year and a half now, we have been working on building tools and analyzing data to make this a reality.
And even though we’re not quite there yet, there are already a lot of meaningful ways Cake can help you answer your most pressing questions.

Let’s explain how this works!👇

Financial buffer

The first thing we want to do is determine what your financial buffer looks like.💰
As a general rule of thumb, this needs to be within 3 to 6 months of your monthly income.

So we need to find out what your average income is , based on the past few months. When you have installed Cake and when you have connected all your current accounts this is automatically calculated within the app.

Step 1 👉 determine your income

Just go to the dashboards section in the app as shown below. Go to the Income dashboard and look at your average income from the past few months. Got it? Ok, write it down. 📝

Go to to the insights
section at the bottom.
Write down your
average income.
Step 2 👉 look at your savings

Now let’s now take a look at your savings.
Unfortunately we can’t get data from your savings account just yet, but you probably already know what’s left of your savings or you can take a quick look at your last bank statement. Got that as well? Ok, let’s write that down too 📝.

💡To add your savings account in Cake there is a simple work around. Learn how to do it in this blogpost.

Step 3 👉 calculate your financial buffer

This part is really easy, just take your calculator and enter the total savings amount and divide it by your average income. Now you know how many months you can last without any income ✅.

💡If you still have an income but it is lower than what you usually have, you can calculate your financial buffer as follows: enter the total savings amount and divide it by your average income minus the monthly income you will have for the coming period.

💡If you have a partner or you’re married, don’t forget to do this for their income and savings as well if you don’t have a joint account.

Step 4 👉 the result

🥇Is this number larger than 6?
Great, you’ve got a substantial financial buffer and you should be able to last the coming months without too much effort.

🥈Is it between 3 and 6?
Good, you’ve got a financial buffer for when the worst does happen and with a few small adjustments to your spending you’ll be in good shape for the coming months.

🥉Is it lower than 3?
This means your financial buffer is too small at the moment to be 100% safe and it’s time to take action. Luckily most governments in Europe have strong unemployment benefits and financial support measures in place if the worst does happen and together with a good look at your spending behaviour we can still turn this around.

Spending behaviour

So now you know what your financial buffer looks like. If you’re not completely reassured by the result then it’s time to take action. By analysing your spending behaviour you can find out where your biggest expenses are. This insight might help you in making rational decisions about where to decrease your spendings to have the most positive impact on your financial buffer. 📈

👉 Spending dashboard

Let’s first take a look at the spending dashboard and see how you’re spending has evolved in the past few months.The Cake app allows you to see this evolution at a glance.
Has it increased in the last month? Maybe you’ve been hoarding supplies at the supermarket? Or has it decreased because you had to stay at home and didn’t spend as much on restaurants and bars?

👉 Spending overview

Let’s quickly click through on this month to see where your money is going. Here you quickly get an overview of all your expenses. Do you see any unnecessary expenses that you can cut down on? Or do you think you’ve increased spending at certain shops?

👉 Spending detail

If you click through on any transaction with a logo, Cake will let you know how you’ve been spending at that shop in the past few months. Do you see an increase at your favorite supermarket? Maybe you’ve gotten an extra streaming subscription?
It’s all there in your data and Cake helps you to find out.

These are just a few simple tools that give you an insight in how you spend your money.
At the end of the day it’s up to you to make choices and take action to increase your own financial buffer. But Cake is here to let you know where it’s going to be most effective.

💡 Write down the actions you think are relevant and the spending behaviour you want to change. This will help you mentaly solidify the actions you need to take moving forward.


So these were just a few simple steps that will allow you to take action and get control over your finances. Here’sone final tip. If you want to find out if your actions have any effect and if you’re able to grow your own financial buffer, just take a look at the cashflow widget in your income or spending dashboard.

This will allow you to track if you’re increasingly moving to a positive net cash flow and if you’re able to put away a little extra in your savings for the months to come!

Stay (financially) safe and healthy

We hope that these simple steps and tips give you more insights in your spending behaviour and help you make better decisions in the coming difficult months.

At Cake we’ll keep on building the tools that you need to support your financial choices. Now more than ever we’re committed to making this dream a reality. So if you have any suggestions or think you’re using our app in a cool way to analyze your own finances, let us know on and we’ll take the best ideas into our roadmap.

Most importantly we hope that you and your family stay healthy and stay safe! 💙

You might also be interested in reading
The road to healthy financial behavior