Though significant progress has already been made in the search for a vaccine, Covid 19 is still dominating the way we live our lives. The global pandemic has been relatively well controlled in some parts of the world but has crippled economies and cost lives in others. Everybody is now more budget conscious and as the future remains uncertain, managing the money you do have coming in is more important than ever. Here’s Asteria’s budgeting tips for surviving a pandemic.
Prioritise according to your situation
If you are a single person, you will differently need to those of a family or a couple. Your living arrangement will also define how you need to approach your budget. If you share with friends or family, you will generally need less than somebody who lives alone. If you work between two or more different locations, you may have a second home to consider. Transport can be an issue for those in rural locations who still need to travel to work, whereas those in urban areas will need to consider other factors. Start with the absolute basics like rent or mortgage payments, bills, and food. Unfortunately, emergency situations often call for a great deal of sacrifice, meaning that nonessentials will need to be eliminated if you want to avoid spiralling into more debt.
Define essentials and non-essentials
This will change depending on the household, but it is important to set out what you consider essential before you start looking at your financial figures. Before Covid 19, entertainment might have been considered a non-essential expense but with most of us still cooped up in our houses or at least very heavily restricted in terms of the things we can and can’t do, it suddenly seems a lot more important. Especially for those who live alone or who need to self-isolate due to health conditions. Medical expenses can also be an issue, especially if you live in a country without universal health care. These should be made a priority, above and beyond things like bills or rent. If you are struggling to meet the cost of things like prescriptions, you may be able to apply for financial assistance from your local government.
Nonessentials are harder to identify, especially when you have been used to frequent impulse spending or treating yourself to little luxuries every weekend. Things like meals out in restaurants, coffee from a café or takeaway food can all be eliminated with some self-discipline and preplanning. For most people, these are all things that we could live without and it our lives would not seem much different. For others, these little treats provide a welcome break from the monotony of working through this difficult period. There is no right or wrong approach but be honest with yourself. Is a meal in a restaurant really more important than having enough money for your heating bill?
Identify Areas of Concern
When you are earning enough money to get by, it is likely that you rarely check up on your financial health in any detail. This is understandable and for many people, budgeting never really becomes an issue until they are in financial difficulty. Identifying problem spending areas is one of the best approaches to take when trying to get your finances in order to survive the pandemic. Look at the areas in your life where you are potentially wasting money. Now that many of us have a lot more free time on our hands, things like cooking meals at home from cheap, fresh ingredients and exercising for free by going for long walks are viable alternatives to more costly options like regular take out food or expensive gym memberships. Unwanted subscriptions can also be a huge drain on your finances, so make sure you cancel any free trials you have signed up for if you have no intention of using the service. Wasteful spending like this might seem insignificant at first, but two or three unused subscriptions at just ten dollars a month will add up to the cost of a holiday or a new laptop. Be vigilant and be realistic. During times like these, financial restraint and careful budgeting are essential.
Understand that this is not forever
Though you may need to take quite an extreme approach to budgeting for the foreseeable future, this situation is not permanent and scientists across the globe are working day and night to find a solution to this devastating situation. When you are making cutbacks and replacing your favourite brands with cheaper alternatives, remember that by sacrificing things like this, you are giving yourself the best chance of coming through this pandemic better financial shape. It is inevitable that many people will fall further into debt than they would like but minimizing this as much as possible and trying to make the most of the money you do have is essential. Keeping a positive mindset during periods of crisis is the first step to overcoming the challenges the bring.
Try to Save Where You Can
Saving in a conventional sense may seem impossible at the moment but there are ways you can build up a little bit of cash if you are careful. When opting for cheaper alternatives at the supermarket or walking to work, rather than using public transport, take a note of how much you have saved. Though you might not be in a position to put the extra cash towards anything, if you can afford to put a fraction of the amount you have saved in to a separate account, you will thank yourself later when you have spare cash to draw upon for an emergency or a treat to self. If your shopping costs less than you anticipated one week, consider moving the left-over money in to a savings account. Though you might feel like spending it right now, keeping a little back for the future will help you feel more secure, especially if you are faced with redundancy or loss of earnings.