It’s no question the coronavirus pandemic has made a serious impact on the economy worldwide. In the U.S. alone, more than 36 million people are out of work.
Even if you’re still employed, you might be thinking about how your personal finances will be affected by the current situation. If this sounds familiar, now is the perfect time to get ahead and turn your anxiety into action with these financial tips.
1. Make a Budget and Estimate Your Cashflow
Only about 67 percent of Americans currently use a budget. If you’re part of the 33 percent who aren’t budgeting, now is a great time to start.
Budgeting and cashflow forecasting (link to Thinkflow) helps you to take control of your finances and get a clear idea of how much money is coming into your bank account and how much is going out. With this information in mind, you can make more informed choices when it comes to your spending.
2. Reduce Unnecessary Expenses
Take steps to eliminate unnecessary expenses whenever possible. When making your budget, you’ll likely notice you have charges on your bank account that you don’t need to be making. It could be fast food runs, online shopping or recurring charges for services you no longer use.
Once you identify these, make a plan to cancel your memberships or avoid spending money when it’s not needed. You’ll be amazed at how much money you can save when you take the time to do this.
3. Start Building a Savings Account
If you don’t have a healthy savings account, start working to build it up. Eliminate as many unneeded expenses as you can from the step above, then take that money to start a savings account.
Building a savings account even if you’re still working is a smart move. You never know when your situation could change and having a savings account, even a small one, will help you to feel secure and give you a cushion if you end up without a job.
4. Look Into Financial Assistance Programs If Needed
There are lots of financial assistance programs out there that can help you through difficult times. If you’ve lost your job, you will likely qualify for unemployment benefits. There are also programs (both funded by the government and by charitable organizations) that can help you get groceries for yourself and your family for free or at lower prices.
Even if you’re doing fine now, it’s a good idea to start researching and see what’s out there for you. That way, if you do find yourself unemployed or dealing with a reduction in hours, you’ll know what options you have and can act sooner.
5. Assess Your Debt
If you have debt, look for ways to consolidate it and make it more manageable.
Many lenders are working with borrowers right now. They might be willing to let you skip a couple of payments or negotiate a lower payment, for example. You might also be able to refinance your mortgage if you’re a homeowner to get a lower monthly payment since interest rates have dropped to record lows.
If you have credit card debt, you might also want to consider working with a debt consolidation company. They can help you come up with a plan to pay off our debt while minimizing the amount you pay in interest.
6. Increase Your Income
Now is a good time to look for extra ways to bring in money, whether you’re employed or not.
Picking up a side job taking surveys online or testing software (link to Income Helper) could be a good way to increase your income. If you do this now, even if your finances do take a turn for the worse, you’ll still have a way of making income and keeping yourself afloat.
7. Use Loans Wisely
If you’re in a difficult financial situation and need to get your hands on cash right away, an installment loan can be a good option to consider.
Before you take out a loan, make sure you understand how the lender works, their interest rates, and their repayment terms. By doing this, you can put together a plan for how you’re going to pay back the loan.
8. Stay Calm
Finally, do your best to stay calm. This is obviously easier said than done. When it comes to financial planning tips, though, it’s an important one.
Try not to make long-term financial decisions based on short-term emotions. It’s understandable if you’re feeling anxious right now. Keep a level head when making a plan for you and your family’s finances. If you make rash decisions, you might end up in a worse position than where you were before.
Put These Financial Tips to the Test Today
There are lots of budgeting and financial tips for 2020 you can implement to stay ahead and manage your money well. This advice is especially helpful if you’re struggling with the effects of the coronavirus pandemic or worry that it might affect your finances later.
Check out some of our other money management blog posts as well if you need additional advice. This post on budgeting and saving money is a great one to check out next.