Take a deep breath in. Now breathe out. You can control a lot of things in your life. Like you can dance to your favourite childhood song!
Likewise, some things totally go beyond your reach. You can’t go back yesterday to un-step on your dog poop! Nor can you magically make this coronavirus pandemic disappear.
But there is one magic trick you can do to wrap that superhero cape around your finances and rise above the mist!
That — is called Budgeting.
Not Defining Budgeting Here!
Budgeting doesn’t need a definition. The word is a clear glass in itself. Simply put, it just means keeping an eye on your money. (It really runs away before you know!)
What’s more important than defining it, is using it at the right time. Like right now.
In extraordinary circumstances like a Covid-19 pandemic, where countries are locking down and economies are forecasting a downward spiral, budgeting is the magic carpet that will keep you afloat.
Getting Started? This is for you
If you’ve never had the need to budget before, it is perfectly alright.
“The slightest adjustments to your daily routines can dramatically alter the outcomes in your life.”
– Darren Hardy
In situations like the current economic strain due to the spreading virus, putting together a budget with a financial plan of action will help you come out financially stronger.
You can use a budgeting app to list down your regular spendings and your earnings. There are many free apps available on the internet as well as on the app store for your smartphone.
In the app, you’ll need to enter all of your regular expenses and all of your sources of income. The app calculates and puts your finances into a clear perspective.
The Government also provides an easy to use online tool (1) that can be accessed from your laptop. This tool is also an excellent resource to begin your budgeting plan.
To get started, you can enter your details of last month up to the current date.
This is how you have been regularly living your life. In emergencies, however, making slight changes to your regular financial life can help you sustain your financial status.
Different Times? You Need A Different Budget
In the financial world, it is usually called the emergency budget.
Uncertain situations in the market make you worry about your money. Sometimes, in the hurry and worry, people make financial mistakes that alter their entire lives.
In times of natural emergencies, the Government makes a lot of changes and introduces new policies and measures to soften the impact on the finances of the country as a whole.
Some of these are very useful to your finances, while some may not be necessary for the long run.
However, in your personal life, slight changes can be made from the regular routine to prioritize your expenses. This will help you to have more cash and financial flexibility.
Since some sources of your income may be temporarily disturbed due to emergencies like the Covid-19 pandemic, natural disasters, medical illnesses etc, you’ll have to make sure that your cash balance doesn’t run thin.
Here are a few strategies that you can adopt to subtly change your lifestyle to ensure financial strength in difficult times:
- Make a list of all your expenses in the order of their importance. Housing, medical cost, food, transportation, bills, education, donations, charities etc.
- Situations like the coronavirus pandemic result in an automatic cut down of some of your expenses. Outdoor entertainment & sports, daycare costs, dining out, parking tickets, fuel etc drastically reduce on their own.
- Emergencies that require you to quarantine, self-isolate or hospitalize etc, will also prevent you from going to the gym, using parking lot passes etc. You might be paying for many monthly memberships that you will not be using for a few months. You can call these companies and cancel the subscriptions.
- You’ll need to discuss with your family members about cutting down costs and payments for infrequently used apps, devices, games, music and shopping. Groceries are also an easy thing to scale back on by choosing more budget friendly recipes and batch cooking!
- When you come across extended and flexible payment arrangement programs offered by any service or utility providers, make sure you contact them and find out how these plans work. Make sure that their revised plans do not have a lot of interest or hidden fees. However, in a cash crunch, the short-term relief for long-term pain is a necessary evil.
- If you’ve placed orders for any new vehicles, devices, or other high-cost items that you will not be able to use in the emergency, you can cancel these for right now and request refunds.
If you are unsure of your next steps, let’s chat about your options and what makes sense! You can always book a complimentary appointment and we will call you!
Stay Home and Stay Safe!