Rebuilding Your Budget After a Financial Setback
The COVID-19 pandemic has had significant impact on many of our budgets. These times of financial uncertainty can sometimes lead us to make bad financial decisions. Feelings of stress can cause us to make emotional knee-jerk reactions that can ultimately make it even harder for us to recover. If your finances have taken a hit and become stretched thin, then now is a good time to assess where you can make changes to help minimize the impact and get you back on track.
These budget rebuilding tips can help you make the most of your finances as you recover from a loss or setback.
Review Your Income
Take some time to review where your current monthly income stands. Have you recently had any adjustment in your pay? Are you receiving any money through unemployment benefits? Take these factors into consideration so you have a full understanding of how much you are bringing in each month.
Evaluate Your Spending
You’re likely spending more on groceries and household supplies right now than you typically do, but you’re also probably spending less on expenses like dining out and entertainment. Look for opportunities to reallocate the funds you typically spend elsewhere to your needs right now. Cutting back on any non-essentials, like subscription box purchases that you can pause or cancel for now, and postponing large purchases can help stretch your budget even further. And know that anything you do decide to cut doesn’t have to be forever, only until you are back on track and comfortably able to add those items back in to your monthly budget.
Trim Down Your Bills
Take a look at your upcoming bills and recurring charges and see where you can make adjustments. If you are in a bind, contact your lenders and utility providers and see if they are offering any deferrals or skip payment options during this time. Review your services, memberships, and subscriptions and see if you can temporarily pause the ones you aren’t currently using. These charges add up fast so eliminating them can free up a lot of extra room in your budget.
Put Monthly Expenses on Your Credit Card
If you find yourself with little room left in your budget to pay your monthly bills, you may be able to put some of those on your for the time being. Try moving smaller expenses like payments for music or television streaming services so it won’t be too much to pay back once your finances improve. If that doesn’t free up enough room then try switching some of your utilities to your credit card, like phone, internet, cable, even household utilities that you can’t go without like electricity and water. Check which of your service providers accept credit card payments and decide which payments to move. Consolidating some of your monthly bills to your credit card will help you extend your budget through a rough patch and you will only have to make one payment. Just make sure you continue making at least your minimum payment on time each month and try to pay as much as you can so you don’t have more work to do to make up for it later.
Keep Paying Down Debt
Even in tight financial times, you still want to keep making your debt payments so those bills don’t pile up. Racking up late and missed payment fees won’t do your future self any favors and it could damage your credit score. It’s important to prioritize your bill payments over other expenses.
See if Refinancing Is Right for You
If your or payments have become too much for you to afford right now, refinancing your loan might help you free up some extra cash so you can spend it where you need it most. At Robins Financial, we make sure all of our products and services like our are here to help you save and earn more money.
Use Gift Cards
It may sound silly, but if you have old gift cards still lying around in your purse, wallet, junk drawer, or wherever you stash them, now is the perfect time to use those and not have to pull from your budget. Use restaurant gift cards to pick up dinner or retail gift cards to cross a few items off your shopping list. If you have unused then now is a great time to redeem those as well.
Review Your Savings
Financial experts recommend having 3-6 months’ worth of income stashed in an emergency fund. If you find yourself out of work, working less, or struggling in general during this global pandemic, that certainly qualifies as an emergency. Take a fresh look at your savings to see how much you have and create a plan for the best way to ration some of those funds if you need to. Don’t beat yourself up about having to dip into your savings if you really need to, you’ll be able to replace the funds over time as your financial situation improves. If you are still receiving your full paycheck and haven’t found that you need to pull from savings yet, it is advised that you still continue your contributions to the account if you can, that way the money will be there in case another emergency arises.
Even in times of crisis, you shouldn’t sacrifice your future financial health while trying to manage the present. Making poor financial decisions now like exceeding your credit limit, missing payments, or taking out new credit can affect your credit score for years to come. Don’t let short-term financial missteps get in the way of achieving your long-term financial goals like securing a loan for a car or a home. It’s important to keep taking the steps now that align with your overall financial plan for the future.
Stay Safe from Scams
While you’re protecting yourself to prevent the spread of coronavirus, you should also be protecting your finances and your identity. Scam artists view times of crisis as a prime opportunity to take advantage of fear and uncertainty. It’s more important than ever to stay alert so you can protect yourself and your finances. You should never provide your Digital Banking login credentials, Secure Access Codes, account numbers, credit card numbers, Social Security Numbers, or any other personal information over the phone, in a text or email, over social media, or through any other channel of communication. Remember that if something sounds too good to be true, it probably is. to your credit union immediately and familiarize yourself with so you can better protect yourself.
Robins Financial is committed to helping our members navigate these times of financial uncertainty. If your finances have been adversely affected as a result of this pandemic, we are here to help. We stand by ready to work with you to minimize financial hardship and help you rebuild. Visit our for more information and updates.