8 Best Budgeting Tips When Undergoing A Pandemic
2020 was a year we will never forget in a rush. The lockdown, which became inevitable due to the pandemic, had an adverse effect on our finances.
Companies retrenched their staff to stay afloat during the pandemic. Many people learn how to spend less. Meanwhile, other people had a bulk of cash they were unable to spend due to the lockdown. Also, many other people witnessed an upward review of their debts as they turn to online shopping as a mean of escape from hunger and lack.
Without a doubt, our financial lives were affected by the pandemic, and we were pushed to get ourselves acquainted with money-management lessons that will stay with us for a while. Here are a few budget tips we learned during the pandemic.
1. Prioritize your essentials
Gone are the days when you spend on frivolities. With layoff from work, reduction in work hours, or furlough, you must learn to function with less money. Your essentials, such as food, rent, utilities, mortgage, etc., should be prioritized.
This helps you minimize spending and save more.
2. Learn to Live on One Income
So many people were used to functioning on multiple streams of income before the pandemic. However, when the pandemic came, some means of income were abruptly abated. Parents had to quit their jobs to take care of their children, who could no longer go to school due to the pandemic.
Just before you take a career break as a parent, you must learn to function with one income. Living on one income can be quite challenging for someone whose spending style has been based on two incomes. However, it helps you structure your budget well.
3. Be Prudent with Spending
During a pandemic, the uncertainty of a lockdown’s longevity should always ring a bell in your mind, thereby influencing your spending habit. Yes, even when you have prioritized your essentials, you will have to spend on other things that are not on your list of needs. However, ensure that you are very prudent about spending. Your list of essentials should be reduced to a reasonable extent to allow you to save more money for the coming days.
4. The Cash Envelope System
With a cash envelope, your budget becomes easier to plan. It is safer and better than carrying cash around because you will only be allowed to shop when you still have enough in your cash envelope. Once you have exhausted the money in your envelope, you will be barred from shopping till the next month rolls around. With this, you get to reduce your spending style.
Although this method is not too perfect when you are doing online shopping, however, there are ways you can manipulate the system cash system to allow a cash-free process when you are shopping online. You can make use of gift cards, budgeting apps, and others.
5. Know When to Touch Your Emergency Fund
What is the essence of an emergency fund when you can touch it? There are situations when you need to touch that emergency fund.
Understandably, sometimes you don’t feel comfortable withdrawing from that money. However, in critical situations, when the expenses are highly needed, do well to withdraw from it.
6. Know when and How to Negotiate with Your Landlord
The adverse effect of the pandemic has led to the retrenchment of many workers. Since payment has been stopped, in little or no time, they would not have enough to pay for rent anymore.
Although an eviction moratorium would still keep you in the house as a renter, however, it is not the best solution to the problem. A wise negotiation with your landlord might be your best bet.
7. Download an App to Track Your Spending
This could be your means of escape from extra spending on things that don’t count. Download an application that would help you monitor your spending. With this, you know the things that you have been continually spending on. It leaves you to decide if those things matter or they are things you can do without.
8. Get Financial Counseling
Just like you always visit a doctor when you notice any anomaly in your health, take time to see a financial expert to get advice on how to spend and save during a pandemic. Using accredited financial counselors will help ensure you get your finances back on track. Do not overlook this option as they can help guide you towards a better financial future.