In today’s tumultuous economic climate, it can be difficult to decide what to do with your money. Many families are experiencing unemployment, furloughs, or cuts in the hours they usually work. Budgeting is always important, but it takes on a new urgency in today’s COVID-19 influenced world.
Saxton Associates, a financial services firm, shares their top nine expert budgeting tips that any family can use during lockdown and beyond.
– Create a Cash Flow Document
The first thing you need to do in order to create a budget is to track your monthly spending. Find out how much money you have coming in and from what sources. Draw up lists of how much money you spend on each category. Suggested categories include rent or mortgage, car payments, utilities, food, clothing, and entertainment.
– Focus on Food Spending
For your food budget, it is important to determine how much you are spending on groceries versus how much you are spending on takeout and delivery. Many locked-down families have gotten into expensive takeout habits, especially using third-party delivery apps that charge higher prices than going directly to the restaurant.
Many people are also spending more on alcohol than they were before the lockdown. It is worth breaking this out in your budget document to see where you might be able to save some money, keeping in mind that you should drink responsibly at all times.
It is understandable that most families will have higher grocery bills when everyone is at home, meaning that children are not getting their school meals and both parents are eating at home rather than at the office. In some cases, this can save money because parents are not spending money on lunches for themselves.
One important resource for families with children who are having difficulty with grocery bills is the availability of bagged meals from the local school district. It is worth checking to find out whether your district is offering this program, which in most cases will last until the end of the school year.
– Cut Discretionary Spending
You may find that there are a lot of projects to be done around the house when you are in lockdown. As much as possible, avoid buying large amounts of supplies and tools for these updates. This is not a good time to overextend your discretionary budget.
Online shopping can relieve stress, but many people are buying things that they do not need. Shoppers should remember that warehouse and delivery employees are putting their health at risk to do their jobs and that it is not a good time to buy non-essential items.
– Entertainment
This may be a great time to cut your traditional cable subscription and instead move to the internet and streaming services only. It can save up to $100 a month, and with the variety of streaming services on the market, everyone will have plenty of TV and movies to watch.
It is also worth checking your local library’s online offerings. Many libraries have the capability to lend e-books through their websites.
– Utilities
While everyone is at home, utility bills may be higher because usage has risen. This is a good time to make sure that all of your appliances are running efficiently and that everyone in the house knows the basic steps they need to take to conserve energy and water.
– Adjusting Your Budget
When you have all of the components of your budget laid out, it is time to determine where you could tighten things up to save money. Carefully look at all of your bills and decide which are your best financial moves.
If you have the means to do so, it is a good idea to pay down your high-interest credit card balances. This could be a good use of your stimulus money if you do not need it for day-to-day expenses.
– Look into Unemployment
If you have been furloughed or laid off, you might be eligible for unemployment benefits. Each state has its own level of unemployment benefits, and the federal government has added an extra $600 on top until August. It may be difficult to apply since the system is strained, but it is worth it to be persistent.
– Starting a Side Hustle
This could also be a good time to start a side hustle or second job. Delivery driving, freelancing, or work in a grocery store are three of your options. However, be careful that by doing so you are not violating the terms of your unemployment payments.
– Asking for Help
Your mortgage holder, auto finance company, and credit card lender may have programs in place to delay your payments and waive late fees during this crisis. If you are strapped for cash, make sure you follow their rules to the letter, or you will find that you are in deeper financial trouble than you were in to begin with.
Belt-Tightening Is a Smart Move
No matter your financial situation, it is a good time to make sure you are living within your means. If you can, avoid running up credit card balances. These tips from Saxton Associates may be able to help you bring your budget under control.
