(Newswire.net — May 21, 2020) —
Many families across the globe have been completely caught off guard by this whole coronavirus pandemic situation. It is unfortunate, but many families have prepared for a crisis like this. Doing research and making some changes in your spending can go a long way in helping you out financially.
1. Do the math
If you look at all budgets, they all have one thing in common: math. The only problem is that normal income may be stopped during a time like this. Whether you are laid off or your spouse is, neither is a good situation. For starters, I would recommend saving up a $1,000 emergency fund as soon as possible. Then, I would focus on saving up 3-6 months of expenses for times like these. If you don’t have the ability to, the next step is for you.
2. Cut expenses now!
If your income has been slashed, it may be a very good idea to get rid of the expenses that you just don’t need. Some examples of this would be canceling your HBO subscription, limiting eating out, not traveling as much, and cutting your cable bill. Instead of getting into a phone contract, get a prepaid phone instead. Whatever it is, cut these discretionary expenses as soon as possible. To be fair, you may not need to cut everything. However, it is smart to do if you know you will be financially strained in the foreseeable future.
3. Negotiate bills
Because of the pandemic, a lot of companies know that many people are struggling to pay their bills. Shoot, we have the highest unemployment right now that the country has ever seen. If you know you aren’t going to be able to pay your bills on time, start contacting these companies. If you have credit card debt, contact your credit card company. A lot of them are assisting borrowers by allowing them to skip payments, utilize lower interest rates, and avoid late fees. If you can’t pay your mortgage, many banks and credit unions are allowing borrowers to defer payments for months and also avoid foreclosures. In the end, you need to make sure that you negotiate these bills so that you can update your budget.
4. Find a way to make an income
During these times, it can be very hard to find a job, but you have to make it a priority to earn as much money as possible. Whether it is freelancing online, driving for Uber or Grubhub, or picking up a short term job at a big box store, do it. If you do have the emergency fund and the 3-6 months of living expenses saved up, you can be a little pickier. If not, you need income now.
5. Update your budget
There is no better time than right now to update your budget. After all of the steps above have been followed, implement them into a short term budget until your lives get back to normal. By telling your money where it needs to go during times like these, it will ultimately reduce the chances of you going into debt and further into financial hardship. Remember, your goal is to have at least some savings after all of your expenses have been accounted for. If you can’t right now, try to increase your income to a point where you have a comfortable amount of savings.
In the end, during times of uncertainty, you have to be proactive with your finances. If you failed to have an emergency fund and living expenses saved up for times like these, let this be a wake-up call to do your due diligence in the future. There will always be another bear market or recession in the future. Whether or not you and your family are financially prepared for it is a different story.