You might feel a significant amount of economic uncertainty right now, and you’re not alone. Millions of Americans suddenly find themselves without income due to COVID-19. The truth is this crisis will eventually pass, and the economy will recover. In the meantime, we must each protect our household’s finances. Consider the following tips for creating a healthy financial budget.
Create a budget.
Now is the time to tighten your belt more than ever. Putting yourself on a financial diet means saving resources that are scarce during this time.
- Cook at home.
You can make your dollar stretch far by cooking meals at home. Use this time to improve your financial and physical health by cooking nutritious meals.
- Use less paper.
If the toilet paper situation in your area is dire, then you hardly need a reminder to use fewer squares. The same goes for paper towels. Switch to reusable rags for cleaning countertops.
- Evaluate your subscriptions.
Do you have time on your hands? Use it to review your debit and credit card statements and cancel any recurring subscriptions you no longer use. Yahya Mokhtarzada, founder of online finance management service Truebill, discovered he had paid $40 per month for in-flight WiFi for 14 months without knowing it.
Cover the basics.
Remember Economics 101, where you studied the difference between wants and needs? Now is the time to brush up on your knowledge. Your musts include the following:
- Rent or mortgage
You need to have a roof over your head. Check with your local and state governments about tenant relief or contact your mortgage lender if you are struggling to make payments.
- Health insurance
A single trip to the emergency room can cost thousands of dollars if you don’t have coverage. If you recently lost your job, then check with your state’s website to see if you qualify for Medicaid coverage. If you have a partner, then try getting on their policy.
Many utility providers have halted service shutoffs during this time of social distancing. Some will even give you bill credits if you work in specific industries. All it takes is a single phone call to your service provider.
Here, you can get help, too, if you’re struggling. Many community food banks now have zero-contact pick-ups where you can stock a few staples. If you lost your job and are applying for Medicaid, then see if your state will let you apply for food stamps. There is no shame in accepting help when you need it. Warmer weather is on the way. You can even start saving the seeds from your produce to regrow some healthy vegetables at home.
Save, save, save.
If you don’t have an emergency fund, but you’re anticipating a tax refund, then use the money to start one. Recently, the Senate approved a stimulus package that will send many Americans up to $1,200 or more for families. If you already blew your refund, then now’s the time to use it. Calculate how much money you can realistically cut from your shopping budget and start saving that each month.
Consider a side hustle.
Even if you didn’t lose your job due to the coronavirus downturn, now is the ideal time to pad your budget with a side hustle. Do you have a bachelor’s degree? Given the record number of students now learning from home, the demand for online tutors is increasing. You can also sell your downtime crafts on Etsy or offer your graphic or web design skills for hire on Fiverr.
If you have a tolerance for risk or have already been exposed to the virus and recovered, then delivery companies from Amazon to DoorDash need qualified people to keep America stocked. Many grocery and drug stores, likewise, need personnel. While such jobs typically feature low starting wages, many employers now offer some version of hazard pay.
Finally, if you carry a mortgage or still have student loan debt, investigate your refinancing options. Many institutions allow you to refinance entirely online, so you don’t have to risk leaving your home. If you lost your job, then you can contact Navient about income-driven repayment options. You could enjoy monthly payments as low as $0.
If you feel frightened about your economic situation due to the COVID-19 downturn, you’re not alone. However, by tightening your belt and relying on your wits and resources, you can survive this rocky time.