These uncertain times are forcing more people to reexamine finances and rewrite their household budgets. Soon after the COVID-19 crisis began, many either lost their jobs or suffered a pay cut or reduction in work hours. The outbreak is a major threat to their personal finances.
Regardless of your situation, examining your budget and making some changes can save money and make your financial future more secure. Here are few ways to budget wisely.
1. Calculate the bottom line: Figure out your baseline income. Then, categorise expenses by what you need to maintain your standard of living, such as a mortgage, utilities, groceries and insurance. Another category should include non-essential expenses. Determine if you also want to set aside money for savings, retirement plans or college tuition. And, experts advise setting aside at least three to six months of expenses for emergencies. Once you have these numbers, you can calculate what you’ll need on a monthly basis.
2. Eliminate or reduce nice-to-haves: If your expenses are still too high, or you want to save more, take another look at discretionary spending and find ways to cut. One easy way to save is to cancel premium TV channels, switch to a basic package or even sign up for a streaming service instead. Digitally streaming or downloading content is another entertainment option too – everything from movies, music and magazines is available at no charge.
3. Find ways to save on the must-haves: Everyone needs insurance and many companies offer discounts if you buy both auto and home insurance together. You can also look for unique programmes to control expenses. Other ways to save include taking advantage of credit card rewards and cash back apps, and making sure to use them. And if you’re overwhelmed by keeping things organised, there are free services online to track your loyalty programme points, including airline miles.
By tracking and cutting expenses, taking advantage of discounts and special savings programs, you’ll be on your way to having a household budget with staying power. -Statepoint