Due to the economic uncertainty of 2021, many world leaders, businessmen, and even your ordinary Joe are rethinking their finances. In a global perspective, world leaders are thinking of how to allocate budgets for short-term resources. For businesses, many are wondering how to make investments in a world where the dollar is dipping in value and economies remain unstable.
And for others, reading this, many are wondering how to budget for the next lockdown or the next trip to the supermarket during this deadly time. So, here we are, sharing six tips on how to budget for COVID-19:
1. Check Your Savings and Income
First thing’s first: many people were laid off during the pandemic and had to rely on savings alone for their needs. This is why you should regularly check and maintain savings, if you aren’t relying on a basic income. Your savings should cover you for six month of daily expenses. If you don’t have six months worth of savings, make sure to calculate how far in the future they will go.
If you do have a basic income, you might have had hours cut, so you should still check to see if your income can sustain you. If you were living beyond your means before coronavirus hit, you may want to adjust your budgeting to a more tight-lipped budget.
2. Explore Your Benefits
At a time when COVID-19 cases were rising, governments worldwide were giving aid to many of their constituents. U.S. Congress has passed two stimulus payments and on track to passing another. Aside from governments, private entities are also set to give aid to those in their sector. Companies such as Apple, Wells Fargo, and American Express are all coming up with solutions for the economic downturn of many.
There, you should check your benefits: you might be entitled to benefits from the state, if you’re unemployed, freelancing, or self-employed. You may also be entitled to benefits from your bank or the company you work for. Make sure to explore all avenues.
3. Rethink Your Spending
What are your essential expenses? Is it daily, weekly or monthly? Rethink your spending habits by tracking your spending. Create a list of deadlines for when payments are due. Keep a summary of bills paid. Set aside a portion of your budget for your bills. Therefore, you can allocate the necessary budget for your bills.
Do you have a house mortgage? Do you pay rent? The government has aid for federally backed mortgage loans. Many creditors will also suspend or reduce loan payments for either a mortgaged house or a rented apartment. Many cities and states are also offering moratoriums on eviction as long as the threat of COVID-19 is looming.
Utility companies are also making sure to suspend disconnections. This means you won’t be disconnected, but you do still have to pay your utility bill at a future time.
For credit cards, companies are offering interest rate reduction. They also have program that lets you lower your monthly payments.
Be smart about your budget. Once you have bills under control, think wisely about your wants and needs. Do you need a new cellphone? Do you want to redecorate your house? Remember, abrupt changes might not be best at this time of calamity.
4. Plan for Emergencies
In a global pandemic, everyone is anxious. Supermarkets might run out of food, one person thinks. I might get sick, another thinks. And so on and so forth. This is why an emergency budget must be implemented that last you for about six months.
Food and water comes first, so make sure you’re well-stocked for another few months of lockdown, if it’s declared in your area. As much food as you have, make sure you also have as much clean water.
Then comes health care products. When COVID-19 first hit, the demand for sanitizers, disinfectant, and alcohol went soaring. They were the first to come off the shelves. The demand hasn’t stopped. Demand for ventilators, oxygen tanks, and other medical supplies have also gone up. Countries are opening their doors for doctors and nurses because medical staff is high in demand. If you have health issues, your medications and regular hospital needs comes first.
If you don’t have health insurance as well as life insurance, this might be the time for getting those. COVID-19 is airborne and can strike anyone, at any time, so taking precautions include getting medical care through your health insurance.
If you don’t have the means to set up an emergency budget at the moment, make some room in your budgeting for a little every month. It will go a long way. You cannot neglect your emergency fund because emergencies can happen at any time, and especially in the age of coronavirus.
5. Plan for Less Spending and More Savings
In case we haven’t reiterated it enough, we’ll say it again: save, save, save. In this time of COVID-19, each little step towards saving will keep you healthy, safe, and content. You won’t have to worry about future hassles with your rent, your bills, or your food intake. You will be set if another lockdown occurs. And, you will know what to allocate for those special times when you’re indoors.
Less spending not only means being tight on the budget but being smart about what you’re buying. If, for example, you’re choosing between cheese or diapers for your kids, go for the diapers. They’re a necessity, while cheese is a want.
If you’re using your credit card, don’t, absolutely don’t, spend beyond your credit line. You may have trouble making it up later. Same goes for your bills, make sure your monthly bills are on time, rather than paying unnecessarily for late fees.
Look for sales. Many essential items are now on sale because of their demand. Buy in bulk. Buying in bulk means you have more for less. This can help you stock up on supplies as well.
6.) Use a budget app
You need to use a budgeting app! There’s plenty of available apps in Google Play and App Store and a budgeting app is a must to have installed in your phone.
Budgeting apps can help you monitor your daily spending and give you a better perspective of your lifestyle and needs. Budgeting your money doesn’t mean your limiting yourself. It means you’re allowing yourself to enjoy more things at a reasonable cost while being able to save more.
The Bottom Line
Well, you must be living under a rock if you don’t know that the world economy has gone down because of COVID-19. That many months were spent under lockdown by citizens all over the world, living on meager food supplies, with small businesses almost all out of clientele. It has yet to normalize, but one thing is for sure: it all taught us a lesson about our finances: life during COVID-19 means having to budget smartly, living on whatever we had.
For some, it was a life of unpaid bills and unstable finances. For others, who were able to set aside their savings from 2020 for this emergency, it was tough-going but manageable. For many, it was a time of financial crisis, unemployment, and debt. And yet, there is a way out, which is to learn from our past mistakes.
We are living in unprecedented times, and we must accept that. We must prepare for more of it in the future, and we must save as much as we can, now. And we must, always, look out for our own safety and our own family’s safety, knowing that we are going to be ok, no matter what our wallet looks like.