If there’s anything the COVID-19 pandemic has taught us is that you aren’t as in control as you think you are and that nothing is certain.
Businesses are shutting down and a growing percentage of Americans are now unemployed.1 With almost everyone at home, there is a high chance that your household spending has increased.
The world is in an economic crisis and one of the things you can do to ease your financial burden is by being financially responsible.
How do you ensure that you’re able to survive on your earnings during this pandemic?
Here Are Tips on How to Budget Responsibly During a Pandemic
Create a pandemic budget and stick to it
Most people avoid creating a budget because, in addition to being a long tedious process, it also demands that you be accountable for every dollar that you spend.
Analyze your expenses Vis-a-Vis your income and identify the areas where you can cut back. Evaluate your shopping habits and eliminate all frivolous expenses and once your budget for the month is set, stick to it, and let it guide your spending decisions.
Don’t commit to any new recurring bills
Avoid subscribing to any expenses that require you to pay a recurring monthly fee. In fact, this is the perfect time to evaluate all the recurring bills you’ve been paying for and identify those that you really need. For instance, if you had previously subscribed to 4 different streaming platforms, eliminate 3, and remain with one.
Go through your credit card charges and cancel all recurring bills that aren’t necessary and channel that money towards an emergency fund.
Limit your credit card purchases
We’ve all been there; purchasing lavish items with a credit card without factoring in whether we can afford it or not.
The effects of the Covid-19 pandemic are still being felt worldwide and if there was ever a worst time to get into debt then this is it. Limit your credit card purchases to essential items and even then, only use it on items you can afford.
Make a distinction between needs and wants
When analyzing your expenses, ask yourself this question ‘Do I absolutely need this?
For instance, upgrading your Wi-Fi can be considered as a want but if you’re a teacher who now has to teach her class online, it automatically changes into a need. If it’s not a necessity then don’t spend your money on it.
Make an allowance for unbudgeted spending
Yes, you are stuck indoors and you might have to tighten the purse strings a little but discretionary spending is also a critical part of your budget. Give yourself a limit for an amount of money that you can use for fun and entrainment without affecting the essential expenses.
Learning to Budget during a Pandemic Doesn’t Have to Be Difficult
Having the whole family at home can result in expenses previously not budgeted for. These minor expenses keep adding up until the end of the month when you realize you overspend your budget. Even though the goal of CalPath is to help you save money, it’s not going to be as effective if you don’t chip in.
It’s time to reevaluate all expenses so that you can keep your spending in check.
Links to sources used
- Another 3.8 million Americans lose jobs as US unemployment continues to grow – https://www.theguardian.com/business/2020/apr/30/us-unemployment-americans-jobless-coronavirus-pandemic