The COVID-19 pandemic has changed our lives forever. Nothing will ever be the same for anyone and anything. Schools have transitioned to online learning, businesses have shut down temporarily, hospitals are flooded with cases and people are forced to self-isolate during the quarantine. Many people are affected by the crisis and most of them have faced severe unemployment in just a period of a few months.
Living on a tight budget is financially straining. It’s important to evaluate your monthly expenses and compromise where you can to keep your finances in order. For your ease, we’ve listed down a few ways you can build a strong bank balance to survive during this crisis.
- Study And Identify Changes In Your Expenses
There’s no denying that the pandemic has changed your habits and lifestyle quite noticeably, which puts a strain on your finances. Better late than never, it’s important to use this opportunity to evaluate those changes and study your new financial situation. Try identifying what can changed about it, what improvements can be made, where you can save money, and how much money you can save with those opportunities. Look for opportunities that may improve your cash flow.
Primary expenses – These expenses account for 40% of your monthly income before the crisis.
As most of us are working from home and continuing operations from home, we save up on transportation. However, since we’re utilizing electricity every day, it’s obvious that electricity costs have certainly increased on the other hand.
We’re also forced to stay inside, canceling any dine-out plans we might’ve had, so food expenses have been reduced as well. And since we’re staying home all day, the need for good entertainment is strong. Streaming Netflix and watching cable TV entertainment may have increased your monthly entertainment bill. However, AT&T has a fix for that. By subscribing to any AT&T TV Package you can get unlimited TV entertainment at a low price! No more drilling a hole in your pocket for unlimited TV entertainment!
Once you learn how to sort out your primary expenses, the secondary expenses are easier to manage. You can save a lot more every month just by making changes to your primary expenses.
Secondary expenses – These expenses account for the restaurant meals, entertainment, going out, and more. It’s easier to save at least 10% of what you make every month now that lockdown restrictions are in place. Keep your monthly bank statements and look and compare your previous secondary spending to understand where you can further save up.
- Re-Assess Your Spending
If you’ve been laid off and struggling to make ends meet with a paycheck-to-paycheck lifestyle, you must go back and look for ways you can relocate your spending. Cutting back on resources and costs isn’t the only thing that will help you. Assessing your financial situation requires you to understand where and how you spend your money.
Start with utilities, housing, insurance, food, and basic necessities. All in all, your fixed expenses. Next, move on to your secondary expenses which include personal care, entertainment, leisure, shopping, and more.
Categorize every spending you can and decide what you can eliminate and cut back on to maintain your monthly expenses and income. Your priority should be to sustain your lifestyle until the next paycheck, and this means relocating your spending.
- Create A Budget and Stick To It
While you’re not in complete control of your financial situation, you can still control your cash flow to save up some cash. Learn how to live within your budget by creating a budget and sticking to it. There are many ways you can cut down expenses and some of the most effective ones are listed below.
- Gym and Club membership – If you’ve signed up for any memberships before the pandemic hit us, it would be best if you cancel the subscription since we’re forced to self-isolate at home.
- App subscriptions – Digital services can really drain your bank accounts over time. Don’t worry, we’re not asking you to give up Netflix or Amazon Prime, but instead of being subscribed to multiple applications and not using most of them, cancel your subscription to apps that offer the same entertainment and value as the ones you use frequently.
- Downgrade services and plans – Look for any services and plans you can downgrade from. For instance, if you don’t need 10GB of mobile data a month, you can downgrade to 5GB and save up. Sign up for bundles rather than independent separate services.
Paying for these subscriptions might not seem a lot but over time they drain your bank balance, in turn, negatively affecting your cash flow.
- Avoid Impulsive Buying When Stocking Up
Empty grocery shelves are a common sight ever since the pandemic came. Many of us have begun to panic buy and hoard important items beforehand. Instead of impulsive buying everything you need and don’t, be sure of what you want and more importantly whether you ‘need’ it right now. There are others out there who need those supplies as well, so hoarding should not be an option for you. While you may have a well-stocked fridge, others might be short on basic supplies.
Not only are you being a good community member, but you’re also saving up by not spending on things you don’t need.
- Create Multiple Income Streams
Diversify your income by looking for ways to make more money. Don’t depend on a single income to alleviate your financial strain. Stabilize your financial situation by polishing your skillset, expanding your knowledge, and sharing your expertise. There are multiple online jobs readily available in such times to help you. All you have to do is find one that suits you and begin working!
To Wrap It Up
We’re all struggling to come back strong once this crisis is over and financial strain is a real issue. However, cutting down on certain expenses and identifying ways to make ends meet can surely support you in these tough times. Follow and practice these techniques to make sure you have a solid bank balance to survive on amid the COVID-19 pandemic.