Budgeting is an integral part of personal finance. It may very well be a crucial factor during these times given the current economic climate.
Although businesses are slowly starting to reopen, no one is entirely certain of the future. What is certain, though, is the need for one to have a solid financial plan. It can help you manage your money better during the pandemic and keep you from getting deeper in debt.
For simple ways on how to keep your finances in order, follow these recommendations below from the bankruptcy attorneys at Scura.
Here are seven ways to budget amidst Coronavirus
Say Goodbye to Unnecessary Habits
What Coronavirus has done is make us realize that we might not be able to indulge in some, if not most, of the activities we did pre-Corona. Staying indoors has kept us from socializing outside of our homes and frequenting to places that are happy to take our money. Whether these are bars during happy hour or just going to the mall to shop to our hearts content, these habits after Corona might have to take a backseat as most people’s salaries have taken a toll.
As life slowly crawls back to a normal pace, you need to ask yourself, what can you actually afford and what can you put on hold for the time being? Can you survive if you do not indulge in activity A or B? If yes, then you do not need it in your life at least until things come back to the way they were. If you cannot survive without them, these are the services or businesses you need to keep in your life and include in your budget.
Enjoy Homemade Food More Often
While we are on the subject of leaving behind unnecessary habits, eating take out every day or even a couple of times a week is another thing you can consider placing on hold.
Staying home has probably opened your palette to home cooking and this is probably something you should do more often coming out of Corona to tighten up the load on the money you spend. Cooking homemade food can be drastically less expensive than eating out, and yes that includes take-out.
The internet is full of fun and delicious recipes that you can easily cook up in no time to serve up a full course meal rather than spend money at a restaurant, say for example, that you could most likely hold off for the moment until your paycheck starts increasing again.
How Fat is Your Emergency Fund?
While no one knows how life post-Coronavirus will be for sure, most are anticipating that the economy will not be so kind. The possibility of losing one’s job, having a pay cut or reduced hours at work is very high and has actually been happening to many already.
If you are still receiving your paycheck, this is the right time to fatten your emergency fund. Try to be as frugal as possible with your spending and put as much money as you can aside for the time being. This way if you are directly affected by the loss of a steady income, you will have something that you can rely on.
Look to the Long-Term When Saving
Putting money away shouldn’t only be for short term emergencies that might come up. Think also long term. What will happen a couple of years down the line and the closer you get to retirement? What kind of lifestyle do you envision having and will you have enough money stowed away.
While you put money away during Coronavirus to have some coins to spare, why not throw some of that money towards your retirement.
If you already have a retirement account or a Roth IRA why not throw up a few more dollars for down the line. It can be as easy as increasing your contribution amount by a few percentage points. This way your future self can thank you.
Don’t forget alternate investments like cryptocurrencies. Some financial experts predict the price of Bitcoin to shoot up from the current prices to over $1 million in the next five years. You may not want to miss the boat on that one.
Pay off debts with Higher Interests
If you have some money to spare, pay off your debts with high interest like credit cards or personal loans. If you keep paying the minimum balance only, the debt will keep accumulating.
You can try talking to your lenders to see if they can agree to lower your interest rates to make it easier on your pockets during these trialing times. If you manage to lower your interest rates, you will have some extra money to invest or pay off other low-interest debts.
Personal Investment is Important
Do you invest in yourself? Emergency fund and long-term savings aside, if you have some extra money in your account after budgeting, have a personal budget that helps improve your current self today.
For example, you can take online classes for that course you always wanted to take or buy that book that can help you with your financial planning.
Consider Your Children’s Future in Education
If you have children, open up a savings account for their future education expenses. College is not a cheap undertaking. A 529 college savings account will spare you the headache of having to pay taxes on it and the money saved can be used on any postsecondary accredited school.
Although Coronavirus has wracked havoc on the economy, proper budgeting will keep you afloat for times to come. With proper planning, you can survive the storm and still manage to save for your future.
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