With over 9.5 million employees in furlough, the financial stress caused by Coronavirus has divided the nation. Many are facing unemployment, while those with small businesses are struggling to make ends meet. If you are among the lucky ones whose income hasn’t interrupted, but it still seems like your spending has changed, with proper financial planning, you can plan for your financial future.
Wait, are you thinking of getting COX TV packages because you’re able to afford them? Or you want to keep your family busy in quarantine? I suggest you hold on. Take a few deep breaths and focus on these tips to manage your finances and then make a decision:
1: Build Your Emergency Saving Funds
It cannot be stressed enough. Save for the rainy days. Unfortunately, most of us don’t have sufficient emergency funds. Considering the uncertainty spawned by COVID-19, it’s suggested to maintain emergency funds that can meet at least the expense of 12 months. Not sure where to begin? Slowly trim down the non-essential funds and transfer the extra funds to your emergency funds account.
2: Revise Your Monthly Budget
These times are not normal. Therefore, it’s pertinent to revise your budget. Right now, your priority must be to cover the essentials. Take a seat and reevaluate your budget to find new ways of conserving cash.
Working from home has helped many people save on gas money, parking space, and tolls. Let’s say you are able to save $250 a month because of this transition. Transfer that money to your savings account or keep it as a financial cushion. Don’t end up spending it elsewhere.
3: Get Refund for Services You are Not Using
If you have gym memberships, subscriptions to restaurants, and other such services that would be idle during the lockdown, it’s time to get a refund. It’s important to know your rights and stick up for them. Many companies are willing to offer a refund to consumers who are no longer using their products/services because of the lockdown. They are literally offering cash refunds.
4: Be Flexible With Shifting Money
Everyone’s facing a different situation in these unprecedented times. Schools are closed, which is why some working parents require a babysitter. Your expenses must have changed. To accommodate this shift, be flexible.
Use your credit card wisely. Don’t change things in a pinch. Plan it out first to keep yourself from falling into the loop of debt.
5: If Your Situation Allows It, Invest More
This is not the right time to sell your investments. You might have seen a decrease in the value of the stocks you hold. Don’t let this discourage you. The stock market has a history of rebounding. Things will turn around in your favor, eventually.
If possible, consider contributing to your retirement account. Invest more.
6: Consider Refinancing Your Mortgage
Amidst the economic turmoil caused by COVID-19, interest rates have been reduced to ease the consumers. This is great news for those who have a mortgage. The interest rates are all-time low right now, which means now is a good time to think about refinancing. Even if it’s a 0.5% decrease in the rate, you are still able to save thousands.
This is also a great opportunity for shortening your loan term. Let’s say your mortgage is 19 years. After refinancing, you would be dealing with a 16-year mortgage. So you are not just saving money, you are also paying your mortgage faster.
7: Taking other Advantages of Low-Interest Rates
Apart from refinancing your mortgage, there are other ways to take advantage of dropping the interest rate. Student loans can also be refinanced. This might involve filling paperwork, but down the road, you would be able to get rid of your loan faster.
8: Save on Entertainment
Now that we have more time on our hands and some of us feel like we are trapped in our houses, chances are you are spending more money on entertainment. This could bolster your budget. Look for creative ways to have fun instead of spending on entertainment heavily.
If your favourite concert is cancelled, take advantage of Spotify to listen to that artist. Not able to see your friends? FaceTime them or drink wine with them on Zoom. Had to cancel your travel plans? Make it a stay-cation or do the things you always wanted to do such as writing your own book!
9: Offer Help Whenever You Can
Don’t let go of any opportunity to help others. Donate groceries, PPE, or money. You can also support local businesses to help keep their doors open.
Of course, some expenses are inevitable such as upgrading your Internet speed to continue WHF. I felt blessed to find COX internet plans in my local area and be able to save money even though I switched providers and got a better speed.
Though things seem depressing, know that it’s temporary. Plan and be prepared for the future with these valuable tips.