Managing finances and budgeting income are things we learn to navigate throughout life, but have proven to be especially relevant now, as we find ourselves in the midst of a worldwide pandemic. Needless to say, COVID-19 has greatly affected both businesses and individuals alike, causing many to take a needed step back to assess where costs can be minimized. While spending has naturally been cut for many due to measures in place like social distancing, we’re sharing a few key ways to manage your money during a time of crisis.
Take a Look at the Big Picture and Make a Budget
Many of us review our finances on a somewhat regular basis, but are not always analyzing with a fine tooth comb. In times of heightened stress, it’s important to tighten your grip on your finances so you are prepared for whatever situation may arise and can feel more at ease. By taking a closer look at your expenses, you’ll have a solid starting point to better understand where you are currently spending and what you can potentially scale back on. Most online banking applications offer a spend analysis so you can see where the majority of your money is going. Once you have a sense of what you’ve be spending where, you can create a realistic budget for yourself.
Be Proactive, Prioritize and Scale Back
Medical bills, rent, credit card payments, and utility bills are all things you want to pay on time to avoid interest charges and late fees. Due to the current crisis, some credit card companies and landlords are more understanding of financial hardships. If you’re unable to pay all bills on time comfortably, proactively reach out and see where you have flexibility, so you know which ones to prioritize. When it comes to “non-essential” spend, take a closer look at your subscription services like monthly dog toys, gym memberships, and clothing rentals as these are places where you can potentially cut back. Now is the time to ask yourself, “is this something I really need to spend money on?” and assess from there.
Once you’ve successfully cut the fluff, learning how to spend strategically will be critical in budgeting over the coming months. While cutting back, it’s important to acknowledge the non-negotiables. Spending on essential needs such as groceries, pet food, basic household items, and medication can be controlled by having a plan in place prior to going shopping. This will help you avoid overbuying and stay on budget.
Control what you can
While many factors are outside of our control right now, staying on top of your finances and budgeting accordingly is not! Ensuring financial stability both long and short term doesn’t happen overnight, but with proper planning and organization you can help work towards a more prepared future, no matter the circumstances.
For more resources to help you during this time, click here.