The COVID-19 pandemic has forced people to prioritize their savings and re-evaluate their spending. As things continue to change, they adjust to the new normal and focus on having a clear plan to manage their fiancés and make the most of their hard-earned cash. No matter where you are in your financial life, below are some things you can do to cope with the crisis and set yourself up for better financial success:
Be Transparent with your Partner
You will want to give your partner equal access to and equal say to your finances, including login credentials to all accounts. Being transparent with your partner will make it easier to stay aligned with where money is being allocated while things continue to unfold.
Have a Full Picture of your Finances
Evaluate your situation, ensuring you know how much money is coming in and how much is going out. Also, you need to know how much you have in savings. If you have a full picture of what you have available, you can prioritize spending more effectively.
Get Specific with your Budget
Create a list of the things you have to budget for and allot a certain amount to each area. You can take advantage of the power of technology in this aspect. If your band and credit union provide personal finance management solutions, consider using them. These solutions can show you trends over time and help you keep up with the budgeting process to ensure you stay on track. Also, you can use spreadsheets or pen and paper if you don’t have a digital solution.
Increase your Savings
Try to aim at least 4 months of expenses in savings. This can be done by saving on things you no longer need to spend money on. As social distancing and quarantine take effect, you may see some expenses declining. For instance, you may use less gas or see a drop in your daycare bill. Focus on putting as much of this extra money onto savings as you can.
Focus Only on the Necessities
After setting a budget and finding ways to reallocate more into savings, it is time to cut unnecessary expenses. You can do this in the form of a subscription that you have not used in a while. Or maybe a luxury item you are used to but can do without for a few months. There are many things you can compromise in this time of crisis especially as outside movements are limited.