The enforced community lockdown due to coronavirus outbreak is placing a limit on our lifestyle in so many ways. In order to support social distancing, several businesses are imposed to shut their doors, causing millions of people to stay at home and lose their jobs. This can only mean one thing: many people are now experiencing a financial strain with no paycheck and little to no savings left to support their needs in this trying time.
For most of us, safety should not be the only thing on top of mind right now. This may not be the best situation, but your hobbled finances must be treated in a way possible — even if it means cutting back or cutting out on non-essential expenses to stay afloat. Consider this time as an opportunity to reevaluate your initial budget plan and redetermine ways on how to manage your finances better.
Here are a few savvy strategies that will help you get through this crisis.
Review your income and assets.
Knowing the status of your income can give you an idea of how strictly you will need to minimise your spending. First things first: figure out your new baseline for income. For example, do you receive a 50% pay cut or entirely none for losing your job? If you earn half of your paycheck each month, it means you need to cut 50% or more of your regular spending. Otherwise, you will have to supplement your lost wage with other sources.
These could be an emergency fund that can support you for let’s say a month or two. You can also take advantage of the government’s unemployment benefits that may vary from one state to another. Do your research to see if you are eligible for this program. In most states, self-employed and freelance workers may be qualified for unemployment benefits.
Cut down on non-essential expenses.
Turn your normal lifestyle in budgeting mode by focusing only on expenses that matter. You can incorporate the 50/30/20 rule in your budget plan. For example, 50% of your monthly budget should go towards your basic needs such as food, mortgage, and household bills. And then allocate 30% for the things you want and the rest for your safe investments and savings.
Since you are spending an abundance of time in the house, you can start doing household jobs on your own instead of paying for laundry or lawn care. This way preserves much of your money.
Talk to your insurance providers.
Most insurers are providing discounts and payment extensions as a consideration amidst the economic crisis. If you have not been receiving any discounts yet, now is the best time to call or email your life insurance provider to request for payment reduction or policy downgrade.
Cancel unnecessary subscriptions.
You may need some source of entertainment to escape from these dark days but if this pandemic has hit your finances hard, then maybe it’s time to cancel your monthly subscriptions to different OTT services for the meantime. It doesn’t have to be permanent but consider this as a great way to save money and make ends meet while waiting for the normal days to come back.
Declutter and sell.
By staying at home, you can use your time to declutter things or furniture pieces you no longer use. Start a garage sale or sell these second-hand items through online selling platforms to earn. You can also think of other ways to supplement your income while business is not as usual. For example, taking advantage of your skills to open a small business online can help you earn and make the best of this quarantine period.