6 Tips To Stick To Your Budget Amid The Pandemic

(Photo : 6 Tips To Stick To Your Budget Amid The Pandemic)

During a pandemic like a coronavirus, it can be stressful to see your income dry up due to a layoff, furlough, or a loss. However, you must not hit the panic button. There is government assistance including unemployment benefits, mortgage forbearance, and stimulus payments that can help fill the gaps if you are struggling in the crisis. If you do not have an emergency fund to count on and are wondering how to make the money work for you, here are a few tips that can help. 

1. Cut the unnecessary expenses

The first step to stick to your budget during the crucial time is to look at the expenses that you can cut. Identify the expenses you can pay and the ones you can do without. For all of us, basic living expenses include food, housing, and utilities. You must keep up with the mortgage payments, pay the gas bills, water, and electricity bills and buy basic groceries as part of your budget. You may also have some built-in relief for the expenditure. Anything beyond the basics will help reduce the monthly expenses. If food is the main part of the budget, focus on the costs when you head out grocery shopping. Cut down on the food items that are not an absolute necessity. Since gyms and clubs are closed currently, stop paying the membership fees. If you have paid the annual charges, contact the owners and ask for a refund. 

2.  Calculate the debt payments

If you have an outstanding loan, try to pay it at the earliest. If you do not make the repayment on time, it could hurt your credit score and the interest will pile up. Try to look for options that make the loan repayment easier. Individuals above the age of 62 may want to consider All Reverse Mortgage which will allow you to borrow funds against the value of the home without the requirement of making traditional mortgage payments over the next 15 or 30 years. A reverse mortgage is due and payable when the last surviving homeowners passes away or sells the home. If you have home equity, it is a good choice to manage your budget and the mortgage in times like today. 

3.  Opt for a lower credit card limit

If you have a credit card with high limits, it will rack up and will become difficult for you to pay down. Choose a lower credit card limit and pay it off whenever you can. Make the minimum payment so you do not get trapped. Use the emergency fund if you have to but stick to a limit that you can pay off in one go. It will help build your credit and will also cover the purchases. 

4. Do not discontinue the investments in a rush

The market will show some volatility due to uncertain situations across the world. However, it is best to never take decisions in a panic mode. You may want to continue with your investments to meet the long-term financial goals. If you notice that the value of your investment has gone down recently, do not liquidate it in a rush. A falling market can also mean an opportunity to buy. Do not focus your investment on the ups and downs of the market and stick to your choice of investment for long-term financial success. 

5.  Pay yourself

Whether you have an emergency fund or not, it is important to save money for the unpredictable future. On payday, make sure to set up automatic transfers or consider putting aside some cash to account for the bills. The purpose is to set aside some money for the future so that you do not face a difficult financial situation. Even if you set aside a small amount, it will grow into something larger and will help in case of emergencies. It can also help you buy a house someday. If anyone deserves the hard-earned cash, it is you and it is important to put yourself first. 

6.  Avoid impulse buying

There are times when you will come across a special discount or an offer and it will be tempting to make the purchase. But avoid it as much as you can. Impulse buying can lead to huge expenses and put a dent in the budget. If you are shopping online, let the item sit on your shopping cart for a few weeks before you proceed with the purchase. When heading to the shopping market, prepare a list and stick to it. Even if you cut down on a few purchases in the month, it will lead to significant savings in the long-term.

Follow these six tried and tested tips to stick to your budget in testing times like today. An emergency can arise at any time but you should not panic. Take well-informed decisions and remember that saving for the future will go a long way.