Worried You’ll Go Broke during the Pandemic? Ease Your Fears with these Expert-Approved Budget Tips
The coronavirus pandemic has impacted everyone’s life in a variety of ways. Its effects are perhaps most felt in the money department though.
Because of sudden changes like canceled travel plans, layoffs, and salary cuts, you might find yourself among the many people who have noticed significant changes in their budget.
If you’re worried about the current state of your finances amid the pandemic, here are some budgeting tips from certified financial planner Natalie Taylor you might find helpful.
A Tale of Two Budgets
Taylor’s first tip entails creating two versions of your budget: a COVID one and a non-COVID one. Analyze each and spot the similarities and differences between the two.
Consider how your income has changed in the past months. Determine both your COVID-19 salary and your monthly income before the pandemic to use as a starting point for your two budgets.
Also, pay attention to how your expenses have changed before the pandemic and during it. You’ll notice that you can spare money as there are many things you aren’t paying for anymore while you’re quarantined like your gym subscription and commuting expenses.
In the Black or in the Red
If you follow the first tip, you’ll then be able to determine whether you’re currently in the red or in the black. It can be scary to see a negative number when you subtract your expenses from your income but it’s important that you acknowledge this critical information.
From there, you can devise a plan to get your finances back on track and make changes to your budget to afford your current lifestyle.
Making Extra Cash
It also wouldn’t hurt if you think of ways you can make some extra cash even if you don’t think you need it.
This will allow you to pad up your emergency fund or build one if you haven’t yet. Experts recommend people to have three to six months’ worth of cash on hand to afford their expenses.
Due to the current low-interest rates, refinancing your mortgage might be something you’d want to consider.
If you really can’t afford your current expenses with your income at the moment, there are some ways you can decrease your bills.
Consider getting in touch with your credit and utilities providers to see whether you can agree on a different paying plan while you get back on your feet. Because the pandemic has been hard on almost everyone, they might be more willing to accommodate your requests.
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